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AbbVie Stock Price Plunged, But Its An Entry Point for Dividend Investors

AbbVie Stock Price Plunged, But Its An Entry Point for Dividend Investors
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AbbVie (NYSE: ABBV) stock price plunged sharply after second-quarter results along with the threat of new drug pricing from the senate committee.

Although the stock price stabilized slightly after hitting 52-weeks low of $63, the shares are still trading below from 52-weeks high of $96.

ABBV AbbVie Inc. daily Stock Chart

AbbVie is among those companies that offer strong dividend yield. The dip in its share price is presenting an attractive entry point for dividend investors.

AbbVie currently offers an annual dividend of $4.28 per share, yielding around 6%. The company has raised its dividend by 11% at the beginning of this year. It has raised dividends over the past six successive years.

The prospects for further dividend expansion are high. This is because of its financial performance and cash generation potential.

The company has topped revenue and earnings estimates for the second quarter this year. Its revenue of $8.25 billion topped the consensus estimate by $170 million.

We continue to see strong momentum in our business, as we delivered revenue and adjusted EPS ahead of our expectations for the quarter. We also announced plans to acquire Allergan, a transformative transaction that will provide scale and diversity to our business,” said Richard A. Gonzalez.

The company has raised its outlook for the following two quarters following robust Q2 results. It expects fiscal 2019 earnings per share to increase at a double-digit rate compared to last year.

The company’s strategy of investing in organic and inorganic growth opportunities is likely to add to revenue growth. The company plans to acquire Allergan, which would offer significant support to revenue growth.

Bloomberg recently reported that AbbVie plans to syndicate a $38B bridge loan for its Allergan acquisition.

The expected acquisition would also offer support to AbbVie stock price. Overall, AbbVie appears like a good bet for dividend investors who are seeking steady growth in dividends and share price. Therefore, buying and holding this stock could be a good idea.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
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siraj sarwar

Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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