Healthcare Stocks Show Dividend Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy ABBV?
Source: Fool
- AbbVie's Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and consistent dividend growth capability.
- Strong Financial Performance: AbbVie reported third-quarter revenue of $15.8 billion, a 9% year-over-year increase, although earnings per share fell 38% to $1.86, its investments in oncology are expected to lay the groundwork for future growth and enhance market competitiveness.
- Medtronic's Market Position: Medtronic, the largest stand-alone medical device maker with a market cap of $132 billion, reported second-quarter revenue of $9 billion, up 6.6% year-over-year, and forecasts a 5.5% revenue increase in 2026, indicating sustained growth potential in the medical device sector.
- Sustainability of Dividend Growth: With dividend payout ratios of 58% for AbbVie and 69% for Medtronic, both companies maintain relatively high ratios; however, due to strong free cash flow and ongoing revenue growth, they are expected to sustain their dividend payments, bolstering investor confidence.
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Analyst Views on ABBV
Wall Street analysts forecast ABBV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ABBV is 253.26 USD with a low forecast of 218.00 USD and a high forecast of 289.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Analyst Rating
15 Buy
7 Hold
0 Sell
Moderate Buy
Current: 225.640
Low
218.00
Averages
253.26
High
289.00
Current: 225.640
Low
218.00
Averages
253.26
High
289.00
About ABBV
AbbVie Inc. is a global, diversified research-based biopharmaceutical company. It is engaged in research and development, manufacturing, commercialization and sale of medicines and therapies. Its product portfolio includes Immunology, Oncology, Aesthetics, Neuroscience, Eye Care and Other Key Products. Immunology products include rheumatology, dermatology and gastroenterology. Oncology products include Imbruvica, Venclexta/Venclyxto, Elahere and Epkinly. Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring, and skincare products. Its Neuroscience products include Botox Therapeutic, Vraylar, Duopa and Duodopa, Ubrelvy, and Qulipta. Eye Care products include Ozurdex, Lumigan/Ganfort, Alphagan/Combigan, Restasis, and other eye care. Other key products include Mavyret/Maviret, Creon, and Linzess/Constella. Its investigational candidate, bretisilocin, is for the treatment of patients with moderate-to-severe major depressive disorder (MDD).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AbbVie Expected to Report 23% Earnings Surge in Q4
- Earnings Growth Expectation: AbbVie is expected to report a 23% increase in Q4 earnings on February 4, with EPS projected at $2.65 and revenue anticipated to rise 8.7% to $16.41 billion, indicating strong market performance.
- Expense Impact Analysis: The company expects to incur $1.3 billion in IPR&D and milestone expenses in Q4, leading to a -$0.71 impact on both GAAP and non-GAAP diluted EPS, reflecting ongoing investment in research and development.
- Market Competition Pressure: Despite AbbVie's strong performance this year, analysts note that intensifying competition from JNJ's Tremfya will make IBD trial results critical for the company's future, potentially affecting its market share.
- Future Growth Strategy: AbbVie is projected to pursue more deals by 2026 to enhance growth into the 2030s, particularly in complementing its obesity asset with a partner molecule, demonstrating a proactive approach to future market opportunities.
See More
Upcoming Earnings Reports and Employment Data
- Earnings Focus: Alphabet, Google's parent company, is set to report its fourth-quarter earnings after market close, with investors keenly observing whether the momentum around the Gemini project translates into tangible growth, which could significantly impact the company's market performance.
- Stable Ad Sales: Analysts indicate that Alphabet's core search business remains robust, with ad sales insulated from any significant shifts towards emerging technologies like Open AI's Chat GPT, providing a stable revenue foundation for the company.
- Impact of AI Tools: New AI-driven tools launched across Google's applications are expected to enhance ad targeting and personalization, potentially providing additional growth momentum for YouTube and further strengthening its competitive position in the market.
- Pharma Sector Updates: Pharmaceutical companies including Eli Lilly, AbbVie, and Novo Nordisk are also reporting earnings on the same day, with Eli Lilly's management noting that pricing is becoming more predictable, although volume remains uncertain, which could affect future margins and market strategies.
See More
Healthcare Stocks Show Dividend Growth Potential
- AbbVie's Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and consistent dividend growth capability.
- Strong Financial Performance: AbbVie reported third-quarter revenue of $15.8 billion, a 9% year-over-year increase, although earnings per share fell 38% to $1.86, its investments in oncology are expected to lay the groundwork for future growth and enhance market competitiveness.
- Medtronic's Market Position: Medtronic, the largest stand-alone medical device maker with a market cap of $132 billion, reported second-quarter revenue of $9 billion, up 6.6% year-over-year, and forecasts a 5.5% revenue increase in 2026, indicating sustained growth potential in the medical device sector.
- Sustainability of Dividend Growth: With dividend payout ratios of 58% for AbbVie and 69% for Medtronic, both companies maintain relatively high ratios; however, due to strong free cash flow and ongoing revenue growth, they are expected to sustain their dividend payments, bolstering investor confidence.
See More
AbbVie and Medtronic's Dividend Growth Potential
- AbbVie Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and sustainable dividend growth potential.
- Medtronic Market Growth: In Q2 of fiscal 2026, Medtronic reported $9 billion in revenue, a 6.6% year-over-year increase, with EPS rising 8% to $1.07, and it anticipates a 5.5% revenue growth, showcasing its successful pivot into smart devices.
- Importance of R&D Investment: Both companies prioritize R&D, with AbbVie investing over $19 billion in 2023 to ensure ongoing product innovation, while Medtronic focuses on new product development to maintain competitiveness despite dividend payout pressures.
- Market Competitive Advantage: The size and diversification of AbbVie and Medtronic allow them to sustain revenue growth across various market segments, with AbbVie's oncology products accounting for 11% of its revenue and Medtronic planning to spin off its diabetes business to optimize resource allocation.
See More
ITOT ETF 52-Week Price Analysis
- Price Range Analysis: The ITOT ETF has a 52-week low of $105 per share and a high of $152.71, with the latest trade at $151.22, indicating that the ETF is fluctuating near its high, potentially attracting investor interest in its price movements.
- Technical Analysis Tool: Comparing the latest share price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and identify potential buying opportunities.
- Unit Trading Mechanism: ETFs trade like stocks, where investors are actually buying and selling 'units' that can be created or destroyed based on investor demand, thus impacting the ETF's liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in ETF units focuses on significant inflows (new units created) or outflows (old units destroyed), which directly affects the underlying holdings of the ETF and consequently its overall performance.
See More
AbbVie Seeks FDA and EMA Approval for Rinvoq in Vitiligo Treatment
- New Indication Application: AbbVie has submitted applications to the US FDA and the European Medicines Agency for Rinvoq (upadacitinib) to treat vitiligo, which, if approved, would make it the first systemic treatment for this condition, marking a significant advancement in the company's dermatological portfolio.
- Successful Clinical Trials: The application is supported by two phase 3 trials that met co-primary endpoints, demonstrating significant improvement in vitiligo symptoms as measured by the Total Vitiligo Area Scoring Index and the Facial Vitiligo Area Scoring Index, indicating robust efficacy of the treatment.
- Significant Market Potential: If approved, Rinvoq will address a critical gap in systemic treatments for vitiligo patients, potentially generating substantial market share and revenue growth for AbbVie, thereby reinforcing its leadership position in the dermatology market.
- Strategic Implications: This application not only highlights AbbVie's ongoing commitment to innovative drug development but also has the potential to enhance its reputation in the biopharmaceutical sector, attracting greater investor interest in its future R&D prospects.
See More
AbbVie Expected to Report 23% Earnings Surge in Q4
- Earnings Growth Expectation: AbbVie is expected to report a 23% increase in Q4 earnings on February 4, with EPS projected at $2.65 and revenue anticipated to rise 8.7% to $16.41 billion, indicating strong market performance.
- Expense Impact Analysis: The company expects to incur $1.3 billion in IPR&D and milestone expenses in Q4, leading to a -$0.71 impact on both GAAP and non-GAAP diluted EPS, reflecting ongoing investment in research and development.
- Market Competition Pressure: Despite AbbVie's strong performance this year, analysts note that intensifying competition from JNJ's Tremfya will make IBD trial results critical for the company's future, potentially affecting its market share.
- Future Growth Strategy: AbbVie is projected to pursue more deals by 2026 to enhance growth into the 2030s, particularly in complementing its obesity asset with a partner molecule, demonstrating a proactive approach to future market opportunities.
See More
Upcoming Earnings Reports and Employment Data
- Earnings Focus: Alphabet, Google's parent company, is set to report its fourth-quarter earnings after market close, with investors keenly observing whether the momentum around the Gemini project translates into tangible growth, which could significantly impact the company's market performance.
- Stable Ad Sales: Analysts indicate that Alphabet's core search business remains robust, with ad sales insulated from any significant shifts towards emerging technologies like Open AI's Chat GPT, providing a stable revenue foundation for the company.
- Impact of AI Tools: New AI-driven tools launched across Google's applications are expected to enhance ad targeting and personalization, potentially providing additional growth momentum for YouTube and further strengthening its competitive position in the market.
- Pharma Sector Updates: Pharmaceutical companies including Eli Lilly, AbbVie, and Novo Nordisk are also reporting earnings on the same day, with Eli Lilly's management noting that pricing is becoming more predictable, although volume remains uncertain, which could affect future margins and market strategies.
See More
Healthcare Stocks Show Dividend Growth Potential
- AbbVie's Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and consistent dividend growth capability.
- Strong Financial Performance: AbbVie reported third-quarter revenue of $15.8 billion, a 9% year-over-year increase, although earnings per share fell 38% to $1.86, its investments in oncology are expected to lay the groundwork for future growth and enhance market competitiveness.
- Medtronic's Market Position: Medtronic, the largest stand-alone medical device maker with a market cap of $132 billion, reported second-quarter revenue of $9 billion, up 6.6% year-over-year, and forecasts a 5.5% revenue increase in 2026, indicating sustained growth potential in the medical device sector.
- Sustainability of Dividend Growth: With dividend payout ratios of 58% for AbbVie and 69% for Medtronic, both companies maintain relatively high ratios; however, due to strong free cash flow and ongoing revenue growth, they are expected to sustain their dividend payments, bolstering investor confidence.
See More
AbbVie and Medtronic's Dividend Growth Potential
- AbbVie Dividend Performance: AbbVie boasts a dividend yield of 2.98% and has increased its quarterly dividend for 54 consecutive years, raising it by 5.5% to $1.73 per share in 2023, demonstrating strong cash flow and sustainable dividend growth potential.
- Medtronic Market Growth: In Q2 of fiscal 2026, Medtronic reported $9 billion in revenue, a 6.6% year-over-year increase, with EPS rising 8% to $1.07, and it anticipates a 5.5% revenue growth, showcasing its successful pivot into smart devices.
- Importance of R&D Investment: Both companies prioritize R&D, with AbbVie investing over $19 billion in 2023 to ensure ongoing product innovation, while Medtronic focuses on new product development to maintain competitiveness despite dividend payout pressures.
- Market Competitive Advantage: The size and diversification of AbbVie and Medtronic allow them to sustain revenue growth across various market segments, with AbbVie's oncology products accounting for 11% of its revenue and Medtronic planning to spin off its diabetes business to optimize resource allocation.
See More
ITOT ETF 52-Week Price Analysis
- Price Range Analysis: The ITOT ETF has a 52-week low of $105 per share and a high of $152.71, with the latest trade at $151.22, indicating that the ETF is fluctuating near its high, potentially attracting investor interest in its price movements.
- Technical Analysis Tool: Comparing the latest share price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and identify potential buying opportunities.
- Unit Trading Mechanism: ETFs trade like stocks, where investors are actually buying and selling 'units' that can be created or destroyed based on investor demand, thus impacting the ETF's liquidity and market performance.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in ETF units focuses on significant inflows (new units created) or outflows (old units destroyed), which directly affects the underlying holdings of the ETF and consequently its overall performance.
See More
AbbVie Seeks FDA and EMA Approval for Rinvoq in Vitiligo Treatment
- New Indication Application: AbbVie has submitted applications to the US FDA and the European Medicines Agency for Rinvoq (upadacitinib) to treat vitiligo, which, if approved, would make it the first systemic treatment for this condition, marking a significant advancement in the company's dermatological portfolio.
- Successful Clinical Trials: The application is supported by two phase 3 trials that met co-primary endpoints, demonstrating significant improvement in vitiligo symptoms as measured by the Total Vitiligo Area Scoring Index and the Facial Vitiligo Area Scoring Index, indicating robust efficacy of the treatment.
- Significant Market Potential: If approved, Rinvoq will address a critical gap in systemic treatments for vitiligo patients, potentially generating substantial market share and revenue growth for AbbVie, thereby reinforcing its leadership position in the dermatology market.
- Strategic Implications: This application not only highlights AbbVie's ongoing commitment to innovative drug development but also has the potential to enhance its reputation in the biopharmaceutical sector, attracting greater investor interest in its future R&D prospects.
See More
