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.
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.