AbbVie (ABBV) Dividend Stock Analysis
Industry: Drug Manufacturers – General
The AbbVie dividend (as an Abbott Labs spin off) has increased for 49 consecutive years; qualifying the company as a Dividend Aristocrat.
Technically AbbVie has only existed since 2013 when it was spun off by Abbott Labs. 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 10 consecutive years.
Current Dividend Annualized: $5.20
AbbVie (ABBV) Intrinsic Value – Margin of Safety Analysis
(updated November 2021)
Normalized Diluted Earnings Per Share (TTM): $4.14
Cash Flow From Operations (CFO) Per Share (TTM): $12.69
Free Cash Flow Per Share (TTM): $12.20
Estimated Intrinsic Value: $149
Target Buy Price Based on Required Margin of Safety = $114
(Required Margin of Safety Based On Risk Stability Grade:
A = 10%, B = 20%, C = 30%, D = 40%, F = 50%)
Target SELL Price Based on Estimated Intrinsic Value = $163
(Allow Overvaluation Adjusted by Risk Stability Grade:
A = 20%, B = 15%, C = 10%, 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: C
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: 9/30/21
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AAAMP Portfolios Position Disclosures:
Dividend Growth & Income – LONG
Treasure Trove Twelve – LONG
Global Dividend Balanced – None
Global Value – LONG
Global Value Aggressive – None
High Yield – LONG
Industry: Drug Manufacturers – Major
On May 8, 2020 AbbVie completed the acquisition of Allergan. The acquisition expanded the company’s reach in aesthetics, ophthalmology, women’s health, gastrointestinal, and central nervous system products. The products offered by the company include Botox, Celexa, Fetzima, Refresh, Ozurdex and Zenpep among others.
AbbVie Inc. is a research based biopharmaceutical company engaged in discovery, development, manufacture and sale of a range of pharmaceutical products. AbbVie puchased Allergan (AGN) for $63 billion in cash & stock. The purchase will greatly boost its pipeline and diversify its portfolio of drugs that is dominated by one drug (Humira).
The company is concentrated on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology, and dermatology; oncology, including blood cancers, virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions.
AbbVie’s leading drug, Humira (arthritis, plaqque psoriasis, ankylosing spondylitis, Crohn’s disease, and ulcerative colitis), represented over half of the company’s current profits and sales before the Allergan acquisition.
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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.