AbbVie Inc. (NYSE: ABBV | MO Price Prediction) is rewarding its shareholders once again with a quarterly dividend of $1.64, payable on Friday, Feb. 14. That is almost 6% higher than the prior payout.
The company recently received another FDA approval and completed an acquisition. The ongoing dividend payment underscores management’s commitment to delivering consistent value to investors.
Why Investors Like Dividends
Dividend stocks offer two benefits.
Investors favor dividend stocks for two main reasons. The first is that they offer enticing total return potential. Total return is a comprehensive measure of investment performance that includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation. It is one of the most effective ways to boost the prospects of overall investing success.
Dividend stocks can also provide investors with a steady, reliable stream of passive income. Passive income is money that is earned with little to no ongoing effort, usually from assets that generate cash flow. This income can come from a variety of sources, including stock dividends. Generating passive income is a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
A Dividend King
AbbVie has grown its dividend for 52 straight years.
AbbVie is the epitome of a stable and dependable stock. It has not only paid out but has increased its dividend annually for 52 years, including its time as part of Abbott Laboratories (NYSE: ABT). That is more than double the 25 straight years of growth it takes for an S&P 500 member to become a Dividend Aristocrat. In fact, that makes it a Dividend King, a member of that exclusive group of stocks that have at least 50 consecutive years of dividend growth.
Since its spinoff from Abbott Labs in 2013, AbbVie’s dividend has had a compound annual growth rate of around 12.5%. The current dividend yield is about 3.5%, which is higher than the average yield of its industry, the healthcare sector, and the S&P 500. So it is a passive income winner. A $2,500 investment is good for about 13 shares, which generates more than $21 a year in dividends.
Note that AbbVie’s share price has grown by about 424% since 2013 as well, offering investors growth along with income.
AbbVie, the Company
This biopharmaceutical company discovers, develops, manufactures, and sells medicines that treat complex health issues. Among its best-known products are Humira, an injection for autoimmune and intestinal Behçet’s diseases, as well as pyoderma gangrenosum, and Imbruvica for the treatment of adult patients with blood cancers. Other offerings include Duopa and Duodopa, Elahere, Epkinly, Ozurdex, Qulipta, Restasis, Rinvoq, Skyrizi, Ubrelvy, Vraylar, and Venclexta/Venclyxto.
The company also provides facial injectables, plastics and regenerative medicine, body contouring, and skincare products, as well as botox therapeutic and eye care products. It has collaborations with Calico Life Sciences, RegenxBio, Janssen Biotech, Evolveimmune Therapeutics, Genentech, AbCellera Biologics, and Tentarix Biotherapeutics. The company was incorporated in 2012 and is headquartered in North Chicago, Illinois.
Its headquarters are in North Chicago, Illinois. The company was incorporated in 2012 after spinning out of Abbott Laboratories (NYSE: ABT). It went public early the following year. It competes with or is similar to, among others:
- Amgen Inc. (NASDAQ: AMGN)
- AstraZeneca PLC (NASDAQ: AZN)
- Bristol-Myers Squibb Co. (NYSE: BMY)
- Eli Lilly and Co. (NYSE: LLY)
- Novartis AG (NYSE: NVS)
- Novo Nordisk A/S (NYSE: NVO)
AbbVie just received FDA approval for its intra-abdominal infection treatment. Demand for Skyrizi and Rinvoq boosted the most recent quarterly results. Last month, AbbVie completed its acquisition of Nimble Therapeutics, and it also announced a partnership with Simcere Zaiming and expanded its collaboration with AbCellera.
AbbVie, the Stock
A stock popular with analysts and hedge funds.
The share price is 105% or so higher than five years ago, about the same as the Nasdaq. Since the beginning of the year, though, it is up about 9%, outperforming the Nasdaq. Shares hit an all-time high of $207.32 last fall. The mean price target is just $204.90, but that signals about 7% upside in the next 12 months. Of 28 analysts who follow the stock, 18 recommend buying shares, six of them with Strong Buy ratings. Last week, Citigroup, Morgan Stanley, Wells Fargo, and others maintained Buy-equivalent ratings.
AbbVie stock is popular with hedge funds, and institutional investors hold more than 73% of the shares. BlackRock, State Street, and Vanguard have notable stakes. Note that around 18 million shares, or about 1% of the float, are held short. Also, an executive parted with 1,800 shares back in December.
Prediction: This Pharma Stock Will Be the Best Performer in 2025
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