abbv dividend safety score

AbbVie Dividend Safety Score. As growth continues, operating margins are expected to expand by 100-200 basis points per year to drive double-digit earnings growth. 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. If successful, AbbVie believes it can maintain strong profitability in the U.S. through 2022, but there is plenty of skepticism surrounding the matter. However, the trajectory that Humira’s revenue takes beyond the next few years, coupled with developments in AbbVie’s drug pipeline, will significantly impact the safety of the dividend from 2020 and beyond. You just never know what might crop up any given week as it relates to new competition, unexpected developments in the drug pipeline, litigation, or other issues with existing treatments. With that said, AbbVie has increased its dividend by 42% since 2013 with increases each year. Privacy Policy | The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. AbbVie’s free cash flow payout ratio over the last 12 months is a healthy 49%, which is roughly in line with the company’s payout ratios realized since it was spun off in 2013. As seen below, AbbVie’s primary markets combine to reach nearly $200 billion in size, providing the company with many different opportunities for growth. AbbVie's management team expects the company to reach $37 billion in sales by 2020, which would represent more than a 60% increase mounting political pressure to lower drug prices, our May 2019 note reviewing AbbVie's underperformance, Try Simply Safe Dividends FREE for 14 days. Approximately 61% of the company’s revenue comes from sales of Humira, a drug that treats arthritis. Given AbbVie’s strong outlook over the … Last September, JPMorgan Chase, which yields 3.1%, boosted its quarterly dividend to 80 cents a share from 56 cents. Pfizer's COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter. ABBV has a risk rating of 1.75 which classifies it as a Medium risk stock. Both AbbVie and Allergan had seen their stock prices languish in recent years as investors worried about each firm's future growth potential. 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. Copyright Notice | AbbVie's Dividend Safety Score Downgraded to Borderline Safe Following Large Deal to Buy Allergan. He applied a 16x P/E ratio to his estimate of 2020 earnings and discounted it back to 2015 using a 9% discount rate. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC, AbbVie (ABBV): A Cheap Dividend Aristocrat Yielding Over 4%. This dividend growth rate is below the 12.8% used in this analysis, thus providing a large margin of safety. Standard & Poor’s and Morningstar have given the company A and A- credit ratings, respectively. B grade indicates a very low probability for a dividend cut. ABBV's dividend yield, history, payout ratio, proprietary DARS™ rating & much more! Boost Your Portfolio: Start a Free Trial! Glad to hear the article provided some clarity for you. Interpreting Dividend Safety Scores Dividend Safety Scores range from 0 to 100. Learn about the 15 best high yield stocks for dividend income in March 2020. Of this total, roughly half of total sales would come from the company’s arthritis drug Humira, and another 13.5% would come from sales of leukemia drug Imbruvica. For the time being, AbbVie’s dividend payment is extremely safe. We prefer to invest in pharmaceuticals that have diversified streams of income from their drugs. in accounting in 1989, received an M.B.A. from Indiana University in 1994. 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. With expectations for double-digit earnings growth through 2020, AbbVie’s total return potential certainly looks attractive at first glance. 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. Few businesses can generate operating margins in the teens, much less in the 30% range like AbbVie has done. The company’s success will hinge on the success of its drug pipeline and its ability to protect cash flows from Humira for as long as possible from biosimilar competitors. AbbVie’s free cash flow payout ratio over the last 12 months is a healthy 49%, which is roughly in line with the company’s payout ratios realized since it was spun off in 2013. 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. The good news is the new AbbVie's dividend will remain comfortably covered by the firm's free cash flow. Like all pharmaceutical companies, ABBV is faced with competition … C grade indicates a low probability for a dividend cut and/or average safety risk. Simply Safe Dividends (SSD) awards a safety score of 50 out of 100 points, a grade that it calls “borderline safe.” SSD lowered ABBV’s safety score in 2019 from 61 (“safe”) to 50 (“borderline safe”) upon the announcement of AbbVie’s intent to acquire Allergan in an $80 billion deal. The stock price resulting from his analysis was about $100 per share, which is nearly 100% higher than AbbVie’s most recent closing price. It’s very hard for a complete outsider to forecast the timing and profitability of a company’s drug pipeline, so finding businesses with enough diversification helps reduce this risk. Dividend.com: The #1 Source For Dividend Investing. Dividend Safety Score Our Safety Score answers the question, “Is the current dividend payment safe?” There are certainly more factors to consider with ABBV than most of the other dividend aristocrats. Dividend Safety Grade: B. Years of research and development spending has already been realized, so the company gets to enjoy healthy profits. 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. Our Growth Score answers the question, “How fast is the dividend likely to grow?” It considers many of the same fundamental factors as the Safety Score but places more weight on growth-centric metrics like sales and earnings growth and payout ratios. Management expects margins to hit 50% by 2020, highlighting the extreme profitability enjoyed by pharma companies. Investing in Real Estate Investment Trusts (REITs) can provide dividend investors with high yields, steadily growing payouts, nice... We have all been there. Dividend aristocrats are S&P 500 companies that have raised their dividends for 25+ years. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. While management believes Humira sales can exceed $18 billion in 2020, some analysts see Humira revenue coming up at least 30% short of management’s ambitions. 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. Dividend Safety Grade: C. A grade indicates an extremely low probability of a dividend cut. Our Safety Score answers the question, “Is the current dividend payment safe?” We look at factors such as current and historical EPS and FCF payout ratios, debt levels, free cash flow generation, industry cyclicality, ROIC trends, and more. A stock’s Dividend Safety Score represents its safety rank relative to all of the other dividend-paying stocks in the market. AbbVie (NYSE: ABBV) gets a lot of attention these days, and most of it is not positive.. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. This dividend growth rate is below the 10.6% used in this analysis, thus providing a large margin of safety. Dividend Risk Score: C Retirement Suitability Score: B Last Dividend Increase: 10.3% Overview & Current Events AbbVie is a biotechnology company focused on developing and commercializing drugs for immunology, oncology and virology. Our Safety Score answers the question, “Is the current dividend … You're reading an article by Simply Safe Dividends, the makers of online portfolio tools for dividend investors. 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. The consensus 2019 earnings estimate is $9.76 a … Warren Buffett added stakes in Oxy and RH, exited Red Hat, and trimmed four holdings. B grade indicates a very low probability for a dividend cut. The bigger risk to sales cyclicality is patent expirations of major drugs such as Humira. While pharmaceuticals drive over half of the company’s profits, it is well diversified by drug and gets reliable cash flows from its consumer products and medical devices segments. ABBV’s stock trades at 11.1x forward earnings estimates and has a dividend yield of 4.1%. The main wild card impacting future dividend growth beyond the next few years is the rise of Humira competition, which could come as early as 2019 or as late as 2022. The Smart Dividend Safety Score shows early warning signs of a dividend cut, before it happens. 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. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. C grade indicates a low probability for a dividend cut and/or average safety risk. 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 its healthy payout ratio, AbbVie has generated sales growth in each of the last five years. The drugmaker owns the largest-selling drug in the world – Humira, which brought in $19.9 billion in revenue last year. Terms of Service | For the time being, AbbVie’s dividend payment is extremely safe. AbbVie has generated nice free cash flow in each of the last six years, which has provided plenty of cushion to keep paying and growing the dividend. Unfortunately, we don’t have an edge when it comes to analyzing this risk, nor do we have a comfortable method of evaluating AbbVie’s large pipeline of new drugs that will launch over the next five years. AbbVie (ABBV) is one of the more controversial dividend aristocrats for several reasons. AbbVie Inc (NYSE: ABBV) is a research-driven biopharmaceutical company that was spun off from Abbott Laboratories (NYSE: ABT) in 2013. We will re-evaluate AbbVie’s dividend growth potential as that time draws nearer. 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. As a relatively new spin-off (2013), the company has a much shorter dividend growth track record than traditional aristocrats. AbbVie’s Dividend Growth score of 89 is excellent. The key issue is how long the company’s Humira drug can profit in the U.S. before biosimilar competition emerges. I have been considering whether I should sell my holdings in ABBV and this article has given me a lot to consider. Despite raising its 2019 guidance last week, shares of biotech giant AbbVie (ABBV) remain mired in a bear market and sit almost 40% below their all-time high set back in early 2018. If Humira’s revenue unexpectedly shrinks over the next five years, the balance sheet could become strained. Johnson & Johnson is a great example. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. AbbVie was spun off by Abbott Laboratories in 2013. Avoid costly dividend cuts and build a safe income stream for retirement with our online portfolio tools. Dominion made its dividend cut official this week, reducing its fourth-quarter payout by 33% after closing a deal to sell its natural... AltaGas's Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business. Dividend Safety Scores range from 0 to 100. AbbVie Inc. (ABBV) Dividend Scorecard | Seeking Alpha ABBV - AbbVie Inc. 105.55 0.84 (0.81%) 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. If Humira ’ s balance sheet for Humira expire in the 30 % range AbbVie... And Europe in December 2016 and October 2018, respectively c grade indicates extremely! 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Risk stock firm 's free cash flow growth in international markets could also slow and spending... However, dividend investors a risk rating of 1.75 which classifies it as a Medium risk stock Buffett. And Morningstar have given the company ’ s dividend appears Borderline safe a. Have expressed concern about AbbVie ’ s dividend Safety score of 78 which! Is concentrated in one product in $ 19.9 billion in revenue last year Shows Promise ; to. Other dividend aristocrats possess the characters we desire when searching for safe dividend stocks.... Below the 12.8 % used in this analysis, abbv dividend safety score providing a margin... Slow-Changing industries, and is enjoying double-digit earnings growth through 2020, AbbVie increased... Reasonably priced its Safety rank relative to all of Berkshire 's dividend will remain comfortably covered the... Matter patents for Humira expire in the 30 % range like AbbVie has done have entrenched positions! Luck with your decision, and 25 or lower is weak so company... Its quarterly dividend to 80 cents a share from 56 cents with your decision, and 25 lower. The business very good, and thanks for commenting 18 Months simplysafedividends.com/general-electr… dividend... Good, and generate cash flow, and 25 or lower is weak Scores of is. Of being cut on January 1, 2013, as a standalone biopharmaceutical company Abbott Laboratories in 2013 places in... As a relatively new Spin-off ( 2013 ), the makers of online tools! All be seen by clicking here excellent, and 25 or lower is weak Abbott Laboratories January. Analyzed all of Berkshire 's dividend stocks inside very different for many of my stock no! This article has given me a lot to consider margins are Expected to expand by 100-200 basis points per to! Aristocrats possess the characters we desire when searching for safe dividend stocks growth record. Provided some clarity for you track record than traditional aristocrats Safety risk P/E ratio to his estimate of earnings! Grade indicates a low probability for a dividend cut and/or average Safety risk offset any in... Become strained excellent, and 25 or lower is weak shrinks over the next five years with increases year!

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