F grade indicates a company with significant issues that are currently affecting its stability and long term risks. by Ken Faulkenberry | Dividend Aristocrats. Also, some of my stock have no dividend scoring available anymore. These stocks require the slimmest margin of safety within the stock universe. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. Dividend Safety Grade: B. 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 earnings quality is poor and requires thoughtful due diligence. C grade indicates a company with a sufficient balance sheet, at least average earnings quality, and a reasonably stable business environment. The lower the percentage, the more chance a company will likely keep increasing the dividend. 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. This article will look at a few key metrics along with future growth prospects to determine ABBV dividend safety. The 11 Factor Dividend Safety Score is examined below: 1. The FCF payout ratio is calculated as Total Dividends / Free Cash Flow. Interest coverage is probably one of the most important metrics that I use. Nothing presented herein is, or is intended to constitute investment advice. To determine the safety of the dividend different types of a Dividend Safety Score exist. B grade indicates a company with a good balance sheet, good earning quality, and a stable business environment. “We continue to be very well positioned for the long-term. With this in mind, ABBVâs dividend appears Borderline Safe, with a moderate risk of being cut. The products offered by the company include Botox, Celexa, Fetzima, Refresh, Ozurdex and Zenpep among others. 1 Year Annualized Growth 3 Year Annualized Growth 5 Year Annualized Growth 10 Year Annualized Growth 20 Year Annualized Growth Years Of Consecutive Dividend Growth 10.28% 84.37% 133.66% 0% 0% 49 Trading Ideas. On May 8, 2020 AbbVie completed the acquisition of Allergan. When considering dividend safety, I like to look at the earnings trend over a 5 and 10 year period. Smurfit Kappa Dividend Review -is now the time to Buy? I prefer the number to be above 3 or the industry average but the higher the number the better. F grade indicates the quality of the earnings is poor or far below average requiring serious due diligence. Over the last 5 years the free cash flow has grown from $7 Billion to $12.77 Billion which is a growth rate of 12.8%. Best known for⦠Derek; December 8, 2020; Contact Info. This tells you what percentage of the company’s free cash flow is being used to fund the dividend. This is essentially the number of times a company can pay its interest with its earnings before interest and taxes. Dividend Safety Grade: C A grade indicates an extremely low probability of a dividend cut. It is approved to treat the following autoimmune diseases in the United States, Canada and Mexico and in the European Union. It is calculated by dividing a firm’s total liabilities by total shareholders’ equity. ABBV Dividend Growth. Humira has generated 45% of the revenue in the first 3 Quarters of 2020. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. Debt is an important metric for ABBV dividend safety. GET MORE DATA-DRIVEN INSIGHTS INTO NYQ:ABBV » What makes a reliable dividend payer. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. Forgot Password? Later I will check the FCF growth to ensure that there is still room to continue to increase the dividend. 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. Similar to earnings growth, FCF growth shows how a company has been increasing its cash flow. With this in mind, ABBVâs dividend appears Borderline Safe with a moderate risk of being cut. 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%. AbbVie Dividend Safety Score. H & R Block Inc (NYSE: HRB ): This tax preparation company's dividend ⦠The Acquisition of Allergan is also positive and shows that the company are moving in the right direction. B grade indicates a very low probability for a dividend cut. But with EU patent protections expired and US patent protections running out by 2023. The Interest coverage ratio is calculated as EBIT/Interest Expense. With this in mind, ABBVâs dividend appears Borderline Safe with a moderate risk of being cut. 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%. AbbVie is probably . One of the major risks for pharma companies is patent loss. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. The AbbVie dividend has been paid continuously since 1924 and increased for 48 consecutive years; qualifying the company as a Dividend Aristocrat. 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. Our Safety Score answers the question, âIs the current dividend ⦠B grade indicates earnings quality is good and/or above average. 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 earnings payout ratio is calculated as Dividends Per Share / Earnings Per Share. For the time being, AbbVieâs dividend payment is extremely safe. B grade indicates a very low probability for a dividend cut. Dividend Safety Scores cut through the noise to assess how likely a company is to put its dividend on the chopping block. A grade indicates a quality company with a strong balance sheet, high earnings quality, and a positive business environment. The more debt a company has than the greater the amount of interest they have to pay. The trailing twelve month EPS coverage currently stands at 97.09% due to negative impacts from COVID-19. C grade indicates a low probability for a dividend cut and/or average safety risk. ABBVâs long-term dividend and fundamental data charts can all be seen by clicking here. One of the first metrics I look at for ABBV dividend safety is the payout ratios. Based on my scoring system I decide how likely I believe a dividend cut may be. AbbVie puchased Allergan (AGN) for $63 billion in cash & stock. ABBV has a negative debt to equity which means that it is a highly leveraged company. My scoring system is as follows: Based on the quick analysis above ABBV scored a total of 82 out of 100 which ⦠This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. Can they continue to increase dividends over the next 10 years? However if earnings is growing at a faster pace than dividend growth it may not be a huge problem. Learn more about Dividend Safety Scores here. 2. I’m not fond of this rule, but it shows that the company has a dividend paying culture at its core. 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. The leverage, in this case, is deemed to be sustainable as the interest coverage is above 10. However there was a decline in the revenue from Europe due to price cuts due to the patent protection running out in europe. Interpreting Dividend Safety Scores. Investors should complete comprehensive due diligence before investing. In 2019 the EPS Payout ratio was 81%. Dividend Safety Scores range from 0 to 100. The margin of safety required should be greater than stocks with an A grade but less than the average stock. I check at least 5 years to see a better reflection of the earnings power of a company. The company has increased its dividend for seven consecutive years, which goes back to the spin-off. ETF's Vs Dividend Stocks? Each one was selected due to ⦠D rated stocks should require a large margin of safety when purchased. In 2019 the payout ratio was 50% and the 5-year average is 47%. Itâs important to know that a dividend is affordable, especially in times where there is a need to save cash. Dividend growth. The sole purpose of this analysis is information. Compare their average recovery days to the best recovery ⦠I personally put more weight on the payout ratio that is calculated from cash flow. 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. The acquisition expands the company’s reach in aesthetics, ophthalmology, women’s health, gastrointestinal, and central nervous system products. For reasons beyond my understanding AbbVie has been allowed to use Abbott Labs dividend record and is included in the Dividend Aristocrat list. I like to see both ratios under 70% but I put more weight on the free cash flow ratio. Consult your financial advisor before making investment decisions. ABBV has an interest coverage ratio of just above 10 which is very high. Payout ratio. Best known for there hugely successful drug HUMIRA, ABBV was founded in 2013 as a spin-off from Abbot Labs. 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. 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. AbbVie Inc (NYSE: ABBV): Belonging to the defensive biopharma sector, this stock has a dividend yield of 6.3%. 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. HUMIRA is a biologic therapy administered as a subcutaneous injection. 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. Yet, if you buy a stock you own more than âa dividend paying machineâ. Dividend Investing, US Dividend Stock; ABBV dividend safety â Is the dividend safe? 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). C grade indicates a low probability for a dividend cut and/or average safety risk. Seeking Alpha Premium Dividend Score. Trade ABBV using the Dividend Capture Strategy Is trading ABBVâs upcoming dividend a good idea? 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. Cash flow has nearly doubled over the next couple of years company will likely keep increasing the dividend to to... Dividend appears Borderline safe with a sufficient balance sheet, high earnings is! Generated 45 % of the most important metrics that I use is good and/or average..., and a stable business environment interest coverage is probably one of the company ’ s EPS is used. 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