Summary
AbbVie (ABBV, Financial) is a large, diverse pharmaceutical company that develops treatments for a range of diseases. It is a product of the split of two companies in October 2011 by Abbott Laboratories.
AbbVie was officially listed on the NYSE on on Jan. 2, 2013. Although the company has a shorter length to its dividend history, its former parent Abbott Laboratories has paid dividends consistently since 1924 and has increased the dividend payout for 44 consecutive years. At 4.4%, AbbVie now pays a higher dividend yield than the former parent Abbott Laboratories' 2.2%.
AbbVie also reported quarterly results with revenue up 8% to $6.43 billion, while earnings climbed by 7.1% to $1.21. The large concern in the report was weaker-than-expected Humira sales. Humira accounts for $4.06 billion of total sales. The quarterly report results were panned by most analysts and the stock fell by 6.3% to $57.60.
With the price drop, the yield is now a very high 4.4% The quarterly dividend for February’s payment will be 64 cents versus the prior year rate of 57 cents per share. The overall yield is now well above that of the S&P 500 and at the higher end of AbbVie history.
The new dividend of 64 cents will be paid at the new higher rate on Feb. 15, 2017, to shareholders of record at close of business on Jan. 13, 2017. AbbVie Inc. is currently priced at $61.46. Listed in the table below are the quarterly dividend payments since 2013.
| Date | Quarterly Dividend |
| 1/13/2017 | 0.64 |
| 10/12/2016 | 0.57 |
| 7/13/2016 | 0.57 |
| 4/13/2016 | 0.57 |
| 1/13/2016 | 0.57 |
| 10/13/2015 | 0.51 |
| 7/13/2015 | 0.51 |
| 4/13/2015 | 0.51 |
| 1/13/2015 | 0.49 |
| 10/10/2014 | 0.42 |
| 7/11/2014 | 0.42 |
| 4/11/2014 | 0.42 |
| 1/13/2014 | 0.4 |
| 10/10/2013 | 0.4 |
| 7/11/2013 | 0.4 |
| 4/11/2013 | 0.4 |
| 1/11/2013 | 0.4 |
Analysis of AbbVie Inc. is based upon our five key criteria for the Top 100 list, which include:
| Category | Value | Score |
| Dividend Yield | 3.74% | 77 |
| Dividend Growth (3 year avg) | 12.8% | 166 |
| Forward P/E | 10.19 | 26 |
| S&P Financial Rating | A | 120 |
| Beta | 1.10 | 150 |
| Total Score | 539 |
Additional Information on P/S ratio and historical yield:
| % Yield | 3 Year Div. Growth Rate | 6 Year Div. Growth Rate | SPS 2016 | P/S Ratio | 10 yr P/S Low | 10 yr P/S High | 5 yr max Yield % | 5 yr low Yield % |
| 4.41% | 12.8% | NA | 16.10 | 3.4 | 3.1 | 5.2 | 4.41% | 2.40% |
Final Analysis
Positives
- AbbVie’s dividend yield is well above that of the S&P 500 Index.
- AbbVie maintains a three-year dividend growth rate of 12.8%.
- AbbVie is trading at a forward P/E ratio below the market. Additionally, its trading at a P/S ratio lower than its historic average. From a relative valuation perspective, AbbVie is undervalued.
- AbbVie maintains a solid investment grade rating.
Negatives
- AbbVie maintains a beta of 1.10, higher than the average company.
- AbbVie is highly reliant on one major drug Humira, a large risk.
Based upon its higher beta and heavy dependency upon Humira revenue, AbbVie Inc. does not qualify as one of our Top 100 Dividend Stocks.
Disclosure: I have no position in ABBV.
