AbbVie: A Rare Blend of Strength and Dividends

Finding a pharmaceutical company with a strong product lineup, a robust pipeline, and a consistent, generous dividend payout isn't easy. I've been an AbbVie (ABBV 0.78%) bull for years, and I believe it's currently a bargain stock poised for long-term outperformance. Here’s why.

A Blockbuster Developer with a Diverse Portfolio

Many pharmaceutical companies aspire to develop and launch a single blockbuster drug. In contrast, AbbVie boasts no fewer than 12 blockbuster drugs based on full-year 2024 sales, including top-seller Skyrizi and the widely recognized Botox. Together, these generated nearly $47 billion in net revenue.

AbbVie's medicines are prescribed across a wide range of therapeutic areas. In the company's most recent quarter, net revenue increased by almost 7% year-over-year to $15.4 billion. This is a remarkable rate of growth considering the company's size and established presence. Non-GAAP (adjusted) net income per share saw an even more significant rise, climbing 12% to $2.97.

Strong Cash Flow and Consistent Dividend Growth

AbbVie's profitability can fluctuate, a common characteristic of large pharmaceutical companies dealing with patent expirations and expensive development pipelines. However, AbbVie consistently generates profits and strong cash flow. Over the past five years, its free cash flow has ranged from approximately $16.8 billion to $24.2 billion.

A Dividend Aristocrat

AbbVie generously shares its success through shareholder dividends. The company is a Dividend King, having increased its dividend for at least 50 consecutive years. Its current quarterly payout stands at $1.64 per share, yielding just under 3%, which is significantly higher than the 1.2% average of the S&P 500 index.

The combination of a strong product portfolio and a high dividend payout is compelling in any industry, but it’s especially rare in pharmaceuticals. AbbVie is a unique and attractive stock, and in my opinion, a strong buy candidate.


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