Dividend Stock Series: ABBV: My views on investing in Abbvie Inc.

Abbvie Inc has been recommended by many market pundits citing their strong business model, pipeline, dividends and dividend growth.

Abbvie is a biopharmaceutical company, develops products worldwide for treatment of various diseases. Here are a few items that I look at when I am researching dividend stocks.

• Has a good pipeline of various drug developments.
  • AbbVie’s top competitors include GlaxoSmithKline, Novartis, Roche, Johnson & Johnson, Amgen, Merck Group, Abbott and Bristol-Myers Squibb.
  • Pays annual dividend of 5.24%($4.72) which is $1.18 per quarter per share.
  • Increased its dividend since 2013.
  • Payout ratio : 77.70%, EPS: $5.65, Dividend : $4.72
  • Beat market earnings estimates comfortably for last 4 quarters.
  • Revenues grew from $25.64B to $33.27B and earnings grew from $5.95B to $7.88B during the period of 2016-2019.
  • Market Capitalization of $163B, P/E: 16.4,PEG ratio : 1.28
  • Cash: 41B,Investments: 49B ,Debt: 67B,Current Ratio: 3.14
  • Institutions own 76.76% of the outstanding shares.
  • Shares are currently trading at $92.67 with 52W-High of  $97.86 and 52W-Low of $62.55 with support level at $78.76 and resistance level at $93.95.

Pros

Here are the things I like about Abbvie Inc. Abbvie stock has a healthy pipeline of drugs coming, pays a good dividend increasing since 2013. Good business performance over the last year consistently beating market estimates. Massive market capitalization with massive revenues, cash and good Assets/Debt ratio. This is one solid company.

Cons

Here are the things that I have concerns with Abbvie stock. Pay out ratio is 77.70% , EPS: 5.65, Dividend : $4.72 which tell me that dividend increases may not be certain. The stocks are trading at very close to 52W High and just below the resistance level. 76.76% of the shares are owned by institutions which tells me there is a risk that they might dump it when we get to the end of the crisis.

Final thoughts

This is a solid company but at current levels I don’t think I will be buying. I will wait for the time probably when the stock price comes down to my liking. In the meanwhile, I will keep looking into other stocks.

Patience is the virtue of a Genius!