I opened a new position with the purchase of AbbVie Inc. (ABBV)
26 shares @ $70.23 on 7/16/2019.
ABBV has now become my second-largest holding with 3.42% of my portfolio. It’s also my second-largest in income with 5.18% of my income coming from ABBV.
Currently, you can get shares of the company with a whopping dividend yield of 6.26%. Not only do they pay out a high dividend, but they also have a very reasonable dividend payout ratio of 48.5% based on 2019 estimated earnings of $8.82. One more thing, the company has a 5-year dividend growth rate of 17.5%. The most recent dividend increase came in at 11.5% earlier this year in January.
So, not only do you get a high payable dividend yield, but you also get a high dividend growth rate.
CRFA expected earnings to grow at a 3-year compound rate of 8%. Therefore, earnings are projected to grow which will translate to dividend increases in the coming years.
As you can see in the FASTGraph below, earnings are expected to increase in the coming years. Analysts have been correct with these predictions 83% of the time. Which leaves me very confident that ABBV earnings will fall in line with predictions.
I find ABBV to be undervalued, and I recommend it as a BUY at this time. I have a fair value price at $99.64. This means that ABBV is 45.8% Undervalued based on today’s price of $68.32 (7/17/2019).
What do you think about the company? Plan on owning it or already do? or why not?
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