AbbVie (ABBV)
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I can’t fault investors for thinking that AbbVie (NYSE:ABBV) is a “show me” story in this market. The company’s upcoming patent expiry for its key Humira drug in Europe, with a pending expiry in the U.S., means that this is a biotech company with an uncertain outlook. Indeed, Humira has been a cash cow for AbbVie, so investors are right to show some concern.
So far, however, it appears that AbbVie has passed its check-up. A big reason for that is the revenue being delivered by Skyrizi and Rinvoq. These two drugs are expected to bring in approximately $15 billion over the next three years.
And then there’s the dividend. AbbVie is another Dividend King with a history of increasing its dividend for the last 51 years. It currently sports a yield of 4% and an impressive annual payout of $5.92 per share. AbbVie’s payout ratio of over 70% is probably not sustainable. But ABBV stock is trading at just 19-times earnings, roughly equivalent to the S&P 500.