Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. 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. The stock price resulting from his analysis was about $100 per share, which is nearly 100% higher than AbbVie’s most recent closing price. ABBV's dividend yield, history, payout ratio, proprietary DARS™ rating & much more! For these reasons, we generally prefer to invest elsewhere in the market. AbbVie (NYSE:ABBV) Piotroski F-Score Explanation The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews. A stock’s Dividend Safety Score represents its safety rank relative to all of the other dividend-paying stocks in the market. The key issue is how long the company’s Humira drug can profit in the U.S. before biosimilar competition emerges. The bigger risk to sales cyclicality is patent expirations of major drugs such as Humira. For the time being, AbbVie’s dividend payment is extremely safe. 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. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. See data and research on the full dividend aristocrats list. Given AbbVie’s strong outlook over the … The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. Both AbbVie and Allergan had seen their stock prices languish in recent years as investors worried about each firm's future growth potential. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. AbbVie Inc.'s () treated shareholders to some hefty dividend bumps since its inception five years ago, but a 35% raise announced in February was the biggest yet. You're reading an article by Simply Safe Dividends, the makers of online portfolio tools for dividend investors. Our Dividend Safety Score analyzes 25+ years of dividend data and 10+ years of fundamental data to answer the question, “Is the current dividend payment safe?” We look at factors such as current and historical EPS and free cash flow payout ratios, debt levels, free cash flow generation, industry cyclicality, profitability trends, and more. 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. As patents expire, lower-cost competition emerges with knock-offs that quickly erode sales and margins. Growth will be fueled by the company’s reasonable free cash flow payout ratio of 49% and strong business fundamentals as drug sales and margins are expected to increase significantly through 2020. ABBV has a risk rating of 1.75 which classifies it as a Medium risk stock. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. Dividend Safety Score: 75 Dividend Yield: 5.21% Dividend Growth Streak: 17 years At first glance, the company’s $31.7 billion debt burden, largely resulting from AbbVie’s $21 billion acquisition of Pharmacyclics in 2015, does raise some eyebrows. B grade indicates a very low probability for a dividend cut. Approximately 61% of the company’s revenue comes from sales of Humira, a drug that treats arthritis. Like all pharmaceutical companies, ABBV is faced with competition … However, AbbVie could cover all of its debt using the $8.4 billion it has in cash and about 3.1 years’ worth of earnings before interest and taxes (EBIT), which is reasonably healthy. We prefer to invest in pharmaceuticals that have diversified streams of income from their drugs. 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. My scoring system is as follows: Based on the quick analysis above ABBV scored a total of 82 out of 100 which … This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. The consensus 2019 earnings estimate is $9.76 a … If Humira’s revenue unexpectedly shrinks over the next five years, the balance sheet could become strained. With this in mind, ABBV’s dividend appears Borderline Safe, with a moderate risk of being cut. The seemingly low expectations attached to the stock are a reflection of investors’ concerns about AbbVie’s concentration in its Humira drug, which is set to experience competition in the U.S. market sometime over the next three to six years. General Electric: Another Dividend Cut Expected in 12 to 18 Months simplysafedividends.com/general-electr… #dividend, Roper Technologies (ROP) simplysafedividends.com/roper-technolo… #dividend. C grade indicates a low probability for a dividend cut and/or average safety risk. If new drugs have not been successful in the pipeline, earnings can erode very quickly. Which category does AbbVie fall … The branded pharmaceuticals industry has extremely high barriers to entry and offers potential for juicy profit margins – AbbVie generated a 33% operating margin last year and targets a 50% margin by 2020. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC, AbbVie (ABBV): A Cheap Dividend Aristocrat Yielding Over 4%. Years of research and development spending has already been realized, so the company gets to enjoy healthy profits. 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. A grade indicates an extremely low probability of a dividend cut. The company has a healthy payout ratio, generates plenty of free cash flow, and is enjoying double-digit earnings growth. Glad to hear the article provided some clarity for you. Glad you found the article useful. For example, during one week in October 2015, AbbVie’s stock fell by more than 10% after the FDA warned that AbbVie’s Viekira treatment caused liver injury to a small number of patients. AbbVie Inc (NYSE: ABBV) is a research-driven biopharmaceutical company that was spun off from Abbott Laboratories (NYSE: ABT) in 2013. Based in North Chicago, AbbVie (ABBV) is in the Medical sector, and so far this year, shares have seen a price change of -29.01%. Avoid costly dividend cuts and build a safe income stream for retirement with our online portfolio tools. 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). The company last increased its dividend by 12% in October 2015 and is included on the dividend aristocrats list despite being spun off at the start of 2013, when it continued its dividend growth streak as an independent business. It’s up to management now to deliver on the pipeline and offset any drop in Humira when the time comes. We analyze 25+ years of dividend data and 10+ years of fundamental data to understand the safety and growth prospects of a dividend. We believe AbbVie will continue recording at least a high-single dividend growth rate for the next few years. With expectations for double-digit earnings growth through 2020, AbbVie’s total return potential certainly looks attractive at first glance. As growth continues, operating margins are expected to expand by 100-200 basis points per year to drive double-digit earnings growth. This dividend growth rate is below the 12.8% used in this analysis, thus providing a large margin of safety. Pfizer announced on Monday its COVID-19 vaccine candidate was found to be more than 90% effective, and no serious safety concerns had... Dominion's Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares. Thanks, Jim. 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