Dividend Aristocrats — or companies that have raised their dividends for a minimum of 25 consecutive years — are always worth considering as long-term investing vehicles. These elite income stocks, after all, have trounced the performance of the broader markets for nearly 30 straight years at this point.
We thus asked three of our Motley Fool contributors which Dividend Aristocrats they would choose to buy and hold for basically forever. They choose…
A perfect buying opportunity
George Budwell (AbbVie): AbbVie, an Illinois-based drugmaker, is a Dividend Aristocrat by virtue of its former parent company, Abbott Laboratories. Even so, this top biopharma has done a lot to earn this coveted label on its own. Since going public in 2013, for instance, AbbVie has raised its dividend by an astounding 168% — among the fastest within the large-cap biopharma space.
Despite its top-notch dividend growth rate and its industry-leading levels of revenue growth over the past five years, AbbVie’s stock has fallen out of favor with investors in 2019. AbbVie’s shares have dropped by over 14% during just the first two and a half months of 2019. The long and short of it is that investors simply aren’t buying that the company is capable of replacing Humira’s revenue stream once the drug loses patent protection in the United States starting in 2023.
Why? Well, AbbVie did experience a significant setback with the clinical failure of its cancer treatment Rova-T last year. However, this dire outlook arguably isn’t warranted, even after this major clinical flop. AbbVie still has five other promising drugs that should comfortably offset any future dip in revenue stemming from Humira’s loss of exclusivity.
Specifically, the company’s cancer franchise is growing by leaps and bounds due to the breakout success of both Imbruvica and Venclexta; its new endometriosis drug called Orilissa is expected to ramp up slowly, but eventually achieve blockbuster status within the next decade; its hepatitis C medicine, Mavyret, should remain a stable source of revenue for at least another eight years; and the drugmaker’s two high-value immunology assets — risankizumab and upadacitinib — should both gain key regulatory approvals later this year.
Stated simply, AbbVie should have…
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