Buy / Hold Stocks

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AbbVie -- >>> AbbVie raised its dividend payout by a stunning 270% over the past 10 years but isn't trading like a stock that rapidly raises its quarterly payout. At recent prices, it offers a 3.2% yield.

https://www.fool.com/investing/2024/09/19/2-unstoppable-sp-500-stocks-that-keep-beating-the/

Shares of AbbVie have been under pressure because its former lead drug Humira lost patent-protected market exclusivity in the U.S. in 2023. In the first half of 2024, Humira sales decreased 33% year over year to $5.1 billion.

Declining Humira sales are a challenge, but AbbVie has done a pretty good job reinvesting the profits it produced. In 2019, the company launched Skyrizi for psoriasis and Rinvoq for arthritis, and these two drugs are offsetting Humira losses on their own.

Combined sales of the pair reached $7.3 billion in the first half of 2024 and are a long way from being finished. In February, management told investors it expects Rinvoq and Skyrizi to generate more than $27 billion in combined annual sales by 2027.

Investors will be glad to learn that Rinvoq and Skyrizi aren't the only blockbuster drugs that AbbVie's launched in recent years. For example, its oral treatments for migraine headaches, Ubrelvy and Qulipta, are expected to produce more than $3 billion in combined annual sales at their peaks.

AbbVie shares have been trading for around 17.9x the midpoint of management's earnings expectations for 2024. That's a historically high multiple for this company, but pressure from Humira's competition is already beginning to subside. With plenty of growth drivers to push earnings higher, investors who buy at recent prices have a great chance to come out miles ahead over the long run.

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