June 8, 2020

AbbVie Is A Buy For High-Yield Dividend Growth


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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