Why Wall Street Can't Get Enough of This Dividend King

AbbVie (NYSE: ABBV) was spun disconnected from Abbott (NYSE: ABT) successful 2013. That's an important information to support successful caput erstwhile you look astatine AbbVie's Dividend King status. Technically, it hasn't accrued its dividend annually for 50 years due to the fact that it hasn't existed arsenic a stand-alone institution for 50 years. But don't fto that information dissuade you from looking astatine this much-loved dividend stock. Here's what you request to know.

Carrying the Dividend King mantle

While AbbVie inherited its presumption arsenic a Dividend King from its erstwhile parent, Abbott, it has accrued its dividend each twelvemonth since the spin-off. It is wide that AbbVie understands however important dividends are to its shareholders.

Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »

Meanwhile, today's output is rather charismatic astatine 2.7%. For comparison, the S&P 500 Index's (SNPINDEX: ^GSPC) output is lone astir 1%, and the mean pharmaceutical stock's output is conscionable 1.5%. The occupation is that the payout ratio is simply a shockingly precocious 330% close now. But that's not needfully the champion gauge here.

AbbVie generates high, recurring currency flows from cause sales. Since dividends are paid from currency flow, the net representation isn't a implicit presumption of a company's dividend-paying ability. Looking astatine currency flows, AbbVie's currency dividend payout ratio is astir 60%. That suggests the dividend is connected overmuch firmer crushed than it appears to dividend investors astatine first. Meanwhile, the equilibrium expanse is investment-grade rated, truthful the institution is financially strong.

What astir AbbVie's cause business?

AbbVie has a beardown instauration successful immunology and oncology. Through acquisitions, it has entered the aesthetics and neuroscience spaces, portion bolstering its oncology position. Immunology is an absorbing illustration of the company's cause pipeline.

Humira was a blockbuster cause for AbbVie, but similar each drugs, it yet mislaid patent protection. When that happens, revenues usually autumn arsenic generic versions of the cause participate the market. However, AbbVie introduced Skyrizi and Rinvoq, which look to beryllium much effectual than Humira. That has helped to soften the deed from Humira's patent expiration.

Notably, AbbVie precocious agreed to bargain Apogee (NASDAQ: APGE) for astir $11 billion. According to AbbVie, the woody volition bring with it "multiple clinical-stage candidates successful improvement crossed inflammatory and immunological diseases, including atopic dermatitis (AD) and asthma." Essentially, this transaction builds connected the company's strengths and positions it good for the future. That's precisely what the institution achieved with erstwhile acquisitions, including Allergan, Cerevel, and ImmunoGen.