There’s More Than One Reason To Love This Stock
AbbVie (ABBV) keeps popping up on my radar and for good
reason. The company is a rapidly growing dividend payer with robust dividend
growth in the outlook. With the Allergan takeover recently completed and a
pipeline flush with new treatments, growth in both revenue and dividends should
range in the double digits over the next few years. Based on the charts, I’d
have to say the market agrees with me. Up roughly 50% from its correction low,
it looks like AbbVie shares are poised to retest and set a new all-time.
AbbVie made headlines this morning that bode well for the
future, the company announced a new collaborative effort in the search for
COVID-19 treatments. The company will be working with Harbor Biomed, Utrecht
University, and Erasmus Medical Center to develop an antibody treatment based
on the fully-human COVID-19 antibody 47D11. The terms of the agreement obligate
AbbVie to aid in the preclinical preparations for clinical trials that may
begin as early as the 4th quarter of 2020. What AbbVie gets in return is an
option for the exclusive rights to distribution once the treatment is approved.
The Growth Outlook Is Strong
AbbVie’s growth outlook was strong even before the addition
of Allergan. At the top line, the consensus for growth is in the high-double-digits,
35% this year, and 19% the year after. At the bottom-line, results are equally
strong at 16% and 14%. Further out, consensus moderates to flat EPS and revenue
but those estimates don’t account for sales of future products already in the
pipeline. In addition to today’s news, there have been several developments
over the past month that promise to boost results as early as the second half
of 2020.
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