High R&D will fuel their dividends

Article Excerpt

These two drugmakers continue to earmark large amount of their revenue to the development of new products. That should spur their long-term earnings and dividends. ABBVIE INC. $183 is a buy. The company (New York symbol ABBV; High-Growth Dividend Payer Portfolio, Manufacturing sector; Shares outstanding: 1.8 billion; Market cap: $329.4 billion; Dividend yield: 3.6%; Dividend Sustainability Rating: Above Average; www.abbvie.com) makes biopharmaceuticals and has leading positions in immunology, oncology, aesthetics, neuroscience and eye care. With the February 2025 payment, AbbVie raised your quarterly dividend by 5.8%, to $1.64 a share from $1.55. The annual rate of $6.56 yields a solid 3.6%. In the three months ended March 31, 2025, revenue increased by 8.4%, to $13.34 billion from $12.31 billion a year earlier. Sales of Skyrizi, a psoriasis treatment, rose 72% in the quarter, accounting for 26% of total revenue. Humira, which treats autoimmune disorders, accounted for just 8% of revenue, down from 18% a year ago. Despite the decline in Humira revenue, AbbVie’s earnings in the quarter, excluding…