I prefer the number to be above 3 or the industry average but the higher the number the better. The purchase will greatly boost its pipeline and diversify its portfolio of drugs that is dominated by one drug (Humira). The 5-year Dividend Growth Rate is 20.86% which is below the 36.80% earnings growth rate but above the free cash flow rate. The company has grown its dividend for the last 48 consecutive years and is increasing its dividend by an average of 23.36% each year. We put the most weight into the dividend payout ratio as it is the single best method of determining if a company is generating sufficient income to pay its dividend. 2. Remember Me Dividend Safety Metrics Estimated Future Total Return Metrics AbbVie Inc. (ABBV) Valuation AbbVie Inc.’s current dividend yield of 4.43% is 20% above its 5-year average. It is approved to treat the following autoimmune diseases in the United States, Canada and Mexico and in the European Union. 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. Best known for… Derek; December 8, 2020; Contact Info. With revenue and Earnings growing, it shows the potential to keep increasing the dividend in the future. While the patent protection will result in a loss of revenue for ABBV, they have been working hard in R&D to build products that can help offset the loss of revenue. D grade indicates there are issues that should be considered concerning future dividend payments. The reason is that earnings can be affected negatively or positively by once-off events. A high percentage of debt in relation to equity is usually a red flag for me. However it is quite likely that a company that has dividend aristocrat status will continue to keep increasing dividends if they have the means to do so. The Question of a ABBV dividend safety remains. ETF's Vs Dividend Stocks? D grade indicates earnings quality is poor and requires thoughtful due diligence. Dividend Safety Grade: C A grade indicates an extremely low probability of a dividend cut. Free cash-flow has grown from $7 billion in 2015 to $12 billion in 2019. What Is Better. This is not ideal but can be forgiven if a company is consistently growing its profits, But it can be worrying during a downturn. ABBV has an interest coverage ratio of just above 10 which is very high. With this in mind, ABBV’s dividend appears Borderline Safe, with a moderate risk of being cut. A blog in the Arbor Investments Planner Network. 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. A grade indicates an extremely low probability of a dividend cut. Pharmaceutical maker AbbVie (NYSE:ABBV) has been caught in the downdraft, down 7% since the beginning of the year. F grade indicates serious dividend safety risks. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. However there was a decline in the revenue from Europe due to price cuts due to the patent protection running out in europe. Still, with a massive drug that will continue to earn profits for years to come, backed by a solid pipeline of new products, AbbVie is positioned to make a lot of money and return a lot of cash flow back to their shareholders. Based on the quick analysis above ABBV scored a total of 82 out of 100 which means I believe they are a low risk to cut the dividend. Simply Safe Dividends (SSD) awards a safety score of 50 out of 100 points, a grade that it calls “borderline safe.” SSD lowered ABBV’s safety score in 2019 from 61 (“safe”) to 50 (“borderline safe”) upon the announcement of AbbVie’s intent to acquire Allergan in an $80 billion deal. But it’s appealing only if that dividend is safe. ETF’s Vs Dividend Stocks? Dividend Safety Scores range from 0 to 100. The Acquisition of Allergan is also positive and shows that the company are moving in the right direction. Consult your financial advisor before making investment decisions. Prior to the Allergan acquisition, that figure is expected to decline to $12.4 billion in 2019. We look at both the earnings payout ratio and the free cash flow payout ratio. Invest With Confidence In Less Time - Manage Your Portfolio Without Behavioral Errors. Dividend Safety Scores range from 0 to 100. AbbVie Dividend Safety Score. AbbVie (ABBV) Updated August 6th, 2019 by Jonathan Weber Disclosure: This analyst has no position in the security discussed in this research report, and no plans to initiate one in the next 72 hours. A stock’s Dividend Safety Score represents its safety rank relative to all of the other dividend-paying stocks in the market. Smurfit Kappa Dividend Review -is now the time to Buy? This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. AbbVie is updated its adjusted diluted EPS for the full-year 2020 from $10.35 to $10.45 to $10.47 to $10.49, which includes the results of Allergan from May 8, 2020 through December 31, 2020, representing annualised net accretion from the Allergan transaction of 12 percent. Can they continue to increase dividends over the next 10 years? B grade indicates a very low probability for a dividend cut. A low score does not mean there will be a dividend cut but it gives me a warning signal to suggest that ABBV dividend safety could be at risk. This tells you what percentage of the company’s EPS is being used to fund the dividend. The 5-year average is 77.34% which is a little high for my liking. if you liked this review than please consider signing up to my newsletter below, Address304 North Cardinal St.Dorchester Center, MA 02124, Work HoursMonday to Friday: 7AM - 7PMWeekend: 10AM - 5PM. 1. Dividend safety. While that’s a short track record, the pre-split legacy dividend growth track record dated back d… For the time being, AbbVie’s dividend payment is extremely safe. The acquisition expands the company’s reach in aesthetics, ophthalmology, women’s health, gastrointestinal, and central nervous system products. I check at least 5 years to see a better reflection of the earnings power of a company. This is essentially the number of times a company can pay its interest with its earnings before interest and taxes. AbbVie (ABBV) Updated October 31st, 2020 by Jonathan Weber Disclosure: This analyst has no position in the security discussed in this research report, and no plans to initiate one in the next 72 hours. In the same manner that the free cash flow payout ratio is important, Free Cash Flow growth gives us an idea if a company can continue to meet the existing dividends and support further increases in the future. The AbbVie dividend has been paid continuously since 1924 and increased for 48 consecutive years; qualifying the company as a Dividend Aristocrat. This is a rel concern for AbbVie as their patent protections will run out by 2023 on their flagship HUMIRA product. The sole purpose of this analysis is information. AbbVie Inc. is a research based biopharmaceutical company engaged in discovery, development, manufacture and sale of a range of pharmaceutical products. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. Nothing presented herein is, or is intended to constitute investment advice. Technically AbbVie has only existed since 2013 when it was spun off by Abbott Labs. AbbVie split from Abbott Laboratories about eight years ago, but by virtue of the dividend history of its parent company, it earns the designation of Dividend Aristocrat. The more debt a company has than the greater the amount of interest they have to pay. Copyright © 2021 Engineer my Freedom - Powered by Creative Themes. Earnings over 5 years have grown at a compound annual growth rate of 36.80%. Top 10 European Dividend Growth Stocks for 2021. Dividend Safety Score. AbbVie puchased Allergan (AGN) for $63 billion in cash & stock. A grade indicates earnings quality is high or far above average. It’s important to know that a dividend is affordable, especially in times where there is a need to save cash. 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. Also, some of my stock have no dividend scoring available anymore. Dividend Investing, US Dividend Stock; ABBV dividend safety – Is the dividend safe? For this, you can use Dividend Cover – a go-to measure of a company's net income over the dividend paid to shareholders. This can have a huge burden on cash flow which in turn may affect the cash left over to pay a dividend. Results from key growth products – including Skyrizi, Rinvoq and Ubrelvy – continue to track ahead of our expectations, our aesthetics portfolio is demonstrating a strong V-shaped recovery, our hematologic-oncology franchise is delivering double-digit growth and we’re advancing numerous attractive late-stage pipeline programs. 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. Interpreting Dividend Safety Scores. C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. C grade indicates a low probability for a dividend cut and/or average safety risk. Based in North Chicago, AbbVie (ABBV Quick Quote ABBV - Free Report) is in the Medical sector, and so far this year, shares have seen a price change of 1.4%. Forgot Password? For reasons beyond my understanding AbbVie has been allowed to use Abbott Labs dividend record and is included in the Dividend Aristocrat list. Another major growth driver is the $63 Billion acquisition of Allergen which was finalised in May 2020. Dividend Safety Grade: B. Learn more about Dividend Safety Scores here. Require an extremely large margin of safety for F rated stocks when purchased. AbbVie pays out 52.80% of its earnings out as a dividend. Based on my scoring system I decide how likely I believe a dividend cut may be. Later I will check the FCF growth to ensure that there is still room to continue to increase the dividend. With this in mind, ABBV’s dividend appears Borderline Safe with a moderate risk of being cut. AbbVie Dividend Safety: 74% = 4/5 Above-Average The Dividend Kings Safety Model Is based on 58 safety metrics (up from 55 in the last ABBV video). Trade ABBV using the Dividend Capture Strategy Is trading ABBV’s upcoming dividend a good idea? ABBV Dividend Growth. H & R Block Inc (NYSE: HRB ): This tax preparation company's dividend … GET MORE DATA-DRIVEN INSIGHTS INTO NYQ:ABBV » What makes a reliable dividend payer. I’m not fond of this rule, but it shows that the company has a dividend paying culture at its core. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. Investors should complete comprehensive due diligence before investing. A stock’s Dividend Safety Score represents its safety rank relative to all of the other dividend-paying stocks in the market. ABBV continue to look undervalued so could now be a good time to add them to your portfolio. “We continue to be very well positioned for the long-term. I love to see a chart like this where there is consistent growth with the dividend but only if earnings and cash flow are consistent also. This is also higher than the industry average of -9.43. The FCF payout ratio is calculated as Total Dividends / Free Cash Flow. ABBV show very strong signs that they can and will continue to raise their dividend in the future. In 2019 the payout ratio was 50% and the 5-year average is 47%. B grade indicates a very low probability for a dividend cut. AbbVie Inc. (ABBV) Dividend summary: yield, payout, growth, announce date, ex-dividend date, payout date. The Interest coverage ratio is calculated as EBIT/Interest Expense. Dividend Safety Scores range from 0 to 100. My scoring system is as follows: Based on the quick analysis above ABBV scored a total of 82 out of 100 which … Compare their average recovery days to the best recovery … Most of these stocks have increased their dividends for more than 10 consecutive years, and each one has a high Dividend Safety Score above 60, … Just because a company has historically paid a dividend, does not mean that it will continue to pay them in the future. On May 8, 2020 AbbVie completed the acquisition of Allergan. The leverage, in this case, is deemed to be sustainable as the interest coverage is above 10. One of the major risks for pharma companies is patent loss. THe new dividend safety score seems very different for many of my stocks compared to the previous scoring. This article will look at a few key metrics along with future growth prospects to determine ABBV dividend safety. The margin of safety required is greater than A & B stocks, but less than D & F stocks. This acquisition should reduce the burden on HUMIRA in terms of the revenue percentile over the next couple of years. Payout ratio. A low score does not mean there will be a dividend cut but it gives me a warning signal to suggest that ABBV dividend safety could be at risk. Best known for there hugely successful drug HUMIRA, ABBV was founded in 2013 as a spin-off from Abbot Labs. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. 3 of the best REITs to think about Investing for 2021, 3 Undervalued Dividend Stocks for December. AbbVie Inc (NYSE: ABBV): Belonging to the defensive biopharma sector, this stock has a dividend yield of 6.3%. I prefer to see earnings growth in line with the dividend growth which ensures that there will be plenty of room to keep growing the dividend. https://www.facebook.com/DividendValueBuilder, https://plus.google.com/+KenFaulkenberry/posts, https://www.linkedin.com/profile/view?id=40655833&authType=NAME_SEARCH&authToken=iHyH&locale=en_US&trk=tyah&trkInfo=clickedVerticalmynetworkidx1-1-1tarId1436379949545taskenfaulkenb, Selecting Dividend Stocks With The DVB: How It Works, Leggett & Platt (LEG) Dividend Stock Analysis. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. The trailing twelve month EPS coverage currently stands at 97.09% due to negative impacts from COVID-19. After issuing shares to help finance the cash-and-stock deal, AbbVie's annual dividend commitment, using its current payout of $4.28 per share, will rise to about $7.5 billion. This is a trend I would expect to happen in 2023 throughout the US. However if earnings is growing at a faster pace than dividend growth it may not be a huge problem. Interest coverage is probably one of the most important metrics that I use. Over a long period of time, if dividends continue to outpace the free cash flow then it may have an impact on the dividend. AbbVie is probably . ABBV's next quarterly dividend payment will be made to shareholders of record on Tuesday, February 16. ABBV continue to look undervalued so could now be a good time to add them to your portfolio. But with EU patent protections expired and US patent protections running out by 2023. B grade indicates earnings quality is good and/or above average. It is calculated by dividing a firm’s total liabilities by total shareholders’ equity. This tells you what percentage of the company’s free cash flow is being used to fund the dividend. Dividend Safety Scores cut through the noise to assess how likely a company is to put its dividend on the chopping block. The products offered by the company include Botox, Celexa, Fetzima, Refresh, Ozurdex and Zenpep among others. Tag ABBV dividend safety. Each one was selected due to … F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence. The lower the percentage, the more chance a company will likely keep increasing the dividend. by Ken Faulkenberry | Dividend Aristocrats. They qualify as a Dividend Aristocrat under the parent company. In 2019 the EPS Payout ratio was 81%. B grade indicates a very low probability for a dividend cut. Normalized Diluted Earnings Per Share (TTM):  $4.73Cash Flow From Operations (CFO) Per Share (TTM): $10.01Free Cash Flow Per Share (TTM): $9.58, Buy Price Based on Required Margin of Safety =  $100(Required Margin of Safety Based On Risk Stability Grade:A = 10%, B = 20%, C = 30%, D = 40%, F = 50%). They have a strong presence here in Ireland with over 600 employees across 3 different counties. When considering dividend safety, I like to look at the earnings trend over a 5 and 10 year period. Learn more about Dividend Safety Scores here. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. 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%. HUMIRA is a biologic therapy administered as a subcutaneous injection. Copyright © 2006-2021 AAAMP | Site by MICRO-MAINFRAME & ProLinks Web Design The Woodlands. The 11 Factor Dividend Safety Score is examined below: 1. The debt to equity ratio is a common financial leverage ratio that represents the amount of debt and equity that is used to finance a companies assets. 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