AbbVie (ABBV) Dividend Stock Analysis

AbbVie Dividend

Sector: Healthcare  

Industry: Drug Manufacturers – General

The AbbVie dividend has been paid every year since 2013 (when it was spun off from Abbott Labs), and increased for 12 consecutive years. 

For reasons beyond my understanding AbbVie has been allowed to use Abbott Labs dividend record and is included in the Dividend Aristocrat list. The Dividend Champions, Contenders, and Challengers list uses 12 consecutive years.

Current Dividend Annualized: $6.20

AbbVie (ABBV) Intrinsic Value – Margin of Safety Analysis            

(updated November 2024)

Normalized Diluted Earnings Per Share (TTM):  $2.87
Free Cash Flow Per Share (TTM): $8.81
Cash Flow From Operations (CFO) Per Share (TTM): $9.31

Estimated Intrinsic Value: $179

Target Buy Price Based on Required Margin of Safety =  $128
(Required Margin of Safety Based On Risk Stability Grade:

A = 0%, B = 20%, C = 40%, D = 60%, F = 80%)

Target SELL Price Based on Estimated Intrinsic Value = $206
(Allow Overvaluation Adjusted by Risk Stability Grade:

A = 40%, B = 25%, C = 15%, D = 5%, F = 0%)

Risk / Stability Grade: C

A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. These stocks require the slimmest margin of safety within the stock universe.

B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. The margin of safety required should be greater than stocks with an A grade but less than the average stock.

C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The margin of safety required is greater than A & B stocks, but less than D & F stocks.

D grade indicates a company in good standing but has issues that could affect its stability and long term risks. D rated stocks should require a large margin of safety when purchased.

F grade indicates a company with significant issues that are currently affecting its stability and long term risks. Require an extremely large margin of safety for F rated stocks when purchased.

Financial Risk Grade:  B-

A grade indicates an extremely low probability of a dividend cut. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories.

B grade indicates a very low probability for a dividend cut.

C grade indicates a low probability for a dividend cut and/or average safety risk.

D grade indicates there are issues that should be considered concerning future dividend payments.

F grade indicates serious dividend safety risks. Investors should complete comprehensive due diligence before investing.

Business Quality Grade: B-

A grade indicates earnings quality is high or far above average.

B grade indicates earnings quality is good and/or above average.

C grade indicates earnings quality is acceptable or average.

D grade indicates earnings quality is poor and requires thoughtful due diligence.

F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence.

Earnings Report:  9/30/24

AAAMP Portfolios Position Disclosures:
Treasure Trove Dividend (TTD) – None
Global Dividend Value (GDV) – None
Dividend Growth & Income (DGI) – None
Global Value (GV) – None
Global Value Aggressive (GVA) – None
Global Conservative Income (GCI) – None 
Global High Income (GHI) – None

Company Description

Sector: Healthcare
Industry: Drug Manufacturers – Major

Company Overview:
AbbVie (ABBV) is a global biopharmaceutical company focused on developing and commercializing innovative medicines in areas such as immunology, oncology, neuroscience, and aesthetics. The company was spun off from Abbott Laboratories in 2013 and is best known for Humira, a blockbuster drug for autoimmune diseases, as well as newer immunology treatments like Rinvoq and Skyrizi.

Company Strengths:
AbbVie benefits from a strong portfolio of high-revenue drugs, particularly in immunology and oncology, which drive consistent cash flow and shareholder returns through dividends. The company has successfully expanded beyond Humira with newer therapies and strengthened its neuroscience and aesthetics businesses through acquisitions like Allergan. Its commitment to R&D and strategic partnerships enhances its long-term growth potential.

Company Challenges:
AbbVie faces challenges from the loss of exclusivity on Humira, leading to increased competition from biosimilars and revenue declines. The company must rely on newer drugs like Rinvoq and Skyrizi to offset this loss while navigating regulatory hurdles and pricing pressures. Additionally, its high debt load from acquisitions, particularly Allergan, requires effective financial management to sustain growth and dividend commitments.

Disclaimer:
While Arbor Investment Planner has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.