AbbVie’s forecast assumes that biosimilar versions of Humira will stay out of the U.S. until 2022, whereas some analysts see competition emerging in 2019. We would like to see AbbVie reduce its debt over the next few years while it is generating strong free cash flow from Humira. AbbVie's Dividend Safety Score Downgraded to Borderline Safe Following Large Deal to Buy Allergan. Dividend aristocrats are S&P 500 companies that have raised their dividends for 25+ years. They have entrenched market positions, compete in slow-changing industries, and generate cash flow from many different products and industries. Growth will be fueled by the company’s reasonable free cash flow payout ratio of 49% and strong business fundamentals as drug sales and margins are expected to increase significantly through 2020. Learn more about Dividend Safety Scores here. Like all pharmaceutical companies, ABBV is faced with competition … Dividend Risk Score: A Retirement Suitability Score: A Last Dividend Increase: 10.3% Overview & Current Events AbbVie is a biotechnology company focused on developing and commercializing drugs for immunology, oncology and virology. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. Copyright Notice | Like all pharmaceutical companies, ABBV is faced with competition … AbbVie (ABBV) announced plans to acquire Allergan (ANG) in a deal valued at more than $80 billion, including assumed debt. Few businesses can generate operating margins in the teens, much less in the 30% range like AbbVie has done. Dividend.com: The #1 Source For Dividend Investing. In AbbVie’s case, over half of its business is concentrated in one product. Given AbbVie’s strong outlook over the next few years for continued growth, we think its payout ratio is very healthy for the time being. Glad to hear the article provided some clarity for you. Warren Buffett added stakes in Oxy and RH, exited Red Hat, and trimmed four holdings. A low score does not mean there will be a dividend cut but it gives me a warning signal to suggest that ABBV dividend safety could be at risk. With its European patent set to expire in 2018 as well, growth in international markets could also slow. Dividend Safety Scores range from 0 to 100. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. ABBV's dividend yield, history, payout ratio, proprietary DARS™ rating & much more! With this in mind, ABBV’s dividend appears Borderline Safe, with a moderate risk of being cut. June 26, 2019. We look at factors such as current and … ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. AbbVie was spun off by Abbott Laboratories in 2013. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC, AbbVie (ABBV): A Cheap Dividend Aristocrat Yielding Over 4%. Pfizer’s COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter, Dominion’s Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares, AltaGas’s Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business, Altria’s Tobacco Business Remains Resilient But Longer-term Growth Uncertainties Linger, some analysts see competition emerging in 2019. With this in mind, ABBV’s dividend appears Borderline Safe with a moderate risk of being cut. AbbVie’s management team expects the company to reach $37 billion in sales by 2020, which would represent more than a 60% increase from 2015’s revenue level. Terms of Service | By comparing companies’ Dividend Scores, you can easier select quality dividend stocks and improve your chances of generating dividend income and preserving capital in the long run. The Dividend Growth Journey continues: $521.74 of dividend income, a nasty 50% dividend cut from ET, purchases of 6 companies adding $367 to my PADI., and the Dividend Safety Score improved to 61.3. C grade indicates a low probability for a dividend cut and/or average safety risk. Last September, JPMorgan Chase, which yields 3.1%, boosted its quarterly dividend to 80 cents a share from 56 cents. Read more for all the details. Interpreting Dividend Safety Scores Dividend Safety Scores range from 0 to 100. The difference of just a few years could really make or break the stock’s performance over the coming years. B grade indicates a very low probability for a dividend cut. Pharmaceutical maker AbbVie (NYSE:ABBV) has been caught in the downdraft, down 7% since the beginning of the year. The seemingly low expectations attached to the stock are a reflection of investors’ concerns about AbbVie’s concentration in its Humira drug, which is set to experience competition in the U.S. market sometime over the next three to six years. The branded pharmaceuticals industry has extremely high barriers to entry and offers potential for juicy profit margins – AbbVie generated a 33% operating margin last year and targets a 50% margin by 2020. Both AbbVie and Allergan had seen their stock prices languish in recent years as investors worried about each firm's future growth potential. As growth continues, operating margins are expected to expand by 100-200 basis points per year to drive double-digit earnings growth. The company has a healthy payout ratio, generates plenty of free cash flow, and is enjoying double-digit earnings growth. High dividend payments are great, and rising dividend payments are better, but dividend cuts are the worst.. Not only are your dividend payments reduced, but also stock values fall well ahead of the dividend cut, and often fall even further immediately following the announcement. A grade indicates an extremely low probability of a dividend cut. Pfizer announced on Monday its COVID-19 vaccine candidate was found to be more than 90% effective, and no serious safety concerns had... Dominion's Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares. Our Dividend Safety Score analyzes 25+ years of dividend data and 10+ years of fundamental data to answer the question, “Is the current dividend payment safe?” We look at factors such as current and historical EPS and free cash flow payout ratios, debt levels, free cash flow generation, industry cyclicality, profitability trends, and more. High returns allow companies to compound their earnings faster and are usually a sign of competitive advantage (intellectual property and drug development expertise, in this case). In addition to the risk posed by Humira’s large contribution to company profits, the Food and Drug Administration (FDA) can also pose unexpected challenges. Standard & Poor’s and Morningstar have given the company A and A- credit ratings, respectively. The stock's 5.4% dividend yield is also at an all-time high, causing some investors to worry that AbbVie's dividend might no longer be safe. Safe Dividend Stocks to Buy for Retirement: AbbVie (ABBV) Dividend Safety Score: 83 Dividend Yield: 3.8% Dividend Growth Streak: 4 years. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. However, Evercore ISI’s analyst Mark Schoenebaum estimated that AbbVie’s 2020 guidance for sales and margins implies adjusted earnings per share of approximately $8.80. These patents covers area such as manufacturing and formulation and do not begin to expire until 2022. mounting political pressure to lower drug prices, our May 2019 note reviewing AbbVie's underperformance, Try Simply Safe Dividends FREE for 14 days. You're reading an article by Simply Safe Dividends, the makers of online portfolio tools for dividend investors. We don’t have data that goes back to the last recession, but pharma companies are generally recession-resistant because consumers still need to treat their illnesses regardless of how the economy is doing. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. Regardless of the ultimate timing, branded drugs cannot maintain their high profit margins forever. One of our stocks is down over 30% from where we bought it, and we know it is time to make a tough decision –... High dividend stocks are popular holdings in retirement portfolios. However, the stock’s safe 4.1% dividend yield, relatively cheap forward earnings multiple of 11.1, and above-average earnings growth prospects over the next few years make it worth a closer look. Years of research and development spending has already been realized, so the company gets to enjoy healthy profits. We prefer to invest in pharmaceuticals that have diversified streams of income from their drugs. Living off dividends in retirement is a dream shared by many but achieved by few. While the success rate is low, a successful drug can generate billions in profits that are protected for many years as a result of the intellectual property owned by the manufacturer. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. For the time being, AbbVie’s dividend payment is extremely safe. He graduated from the University of Illinois with a B.S. AbbVie also expects to launch over 20 new products by 2020 to reach to its goals and believes that its current pipeline has potential to achieve revenues of nearly $30 billion by 2024. You can read our analysis of Johnson & Johnson by clicking here. As of today (2021-01-02), the Dividend Yield % of AbbVie is 4.41%.. During the past 11 years, the highest Trailing Annual Dividend Yield of AbbVie was 6.38%.The lowest was 0.85%.And the median was 3.37%.. AbbVie's Dividends per Share for the months ended in Sep. 2020 was $1.18.. During the past 12 months, AbbVie's average Dividends Per Share Growth Rate was 10.60% per year. Great review. Abbott Laboratories, which spun off AbbVie, has a dividend growth streak of more than 40 consecutive years and is the reason why AbbVie is considered a dividend aristocrat. The Smart Dividend Safety Score shows early warning signs of a dividend cut, before it happens. 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