With a nine-year payment history and a 4.8% yield, many investors probably find AbbVie intriguing. We’d agree the yield does look enticing. Dividend Analysis Explore this interactive chart for our latest analysis on AbbVie!
Multiple analysts, including those from J.P Morgan and Citi, called this move exaggerated, yet the stock doesn’t show signs of bottoming just yet. It is no secret that regulators make or break the markets, but few sectors are under their power as much as the Pharmaceuticals. A recent decision by the Food and Drug Administration (FDA) had a severe negative impact on the share price. The FDA added new and updated warnings on drugs, including Rinvoq(upadacitinib) that AbbVie markets.
Meanwhile, BTL Industries announced a resolution in the patent infringement claims against Abbive related to their muscle stimulation technology. Per the agreement, Abbvie will pay an undisclosed sum, and all litigation pending between the parties will be dismissed. We will examine the dividend as the stock dips down below the P/E of 30 since a 4.8% yield is certainly interesting at the right price.
We also measure dividends paid against a company’s levered free cash flow to see if enough cash was generated to cover the dividend. AbbVie paid out a conservative 45% of its free cash flow as dividends last year. Story continues Dividends are typically paid from company earnings. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of its net income after tax. AbbVie paid out 136% of its profit as dividends over the trailing twelve-month period. However, given the circumstances of 2020, this should not be a surprise.
Payout ratios historic-dividend
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- Downside pressures and fixed earnings outweigh AbbVie Inc.’s dividend yield. (NYSE: ABBV)
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