Recent Buy – Abbvie Inc.

On June 27th I purchased 32 shares of Abbvie Inc. (ABBV) for 69,28 $ per share plus commission. The total cost of the purchase was 1 965 €.

Overview

AbbVie Inc. is a fairly new biopharmaceutical company since it was founded in 2013. It originated as a spin-off of Abbott Laboratories, which is a Dividend Aristocrat with 45 consecutive years of dividend increases. The company is best known for their blockbuster drug called Humira.

About The Stock

The stock has been under pressure for a while now.

Their blockbuster drug Humira will see competition and they will have to find new products to replace the dropping sales. A few days ago Abbvie announced that it will acquire Botox maker Allergan for 63 billion USD. The shareholders did not like this at all and as a result the shares plunged over 15 %. The current price is about 31 % below 52 week high and stock is trading at a really low valuation and has a record high dividend yield. 

I don’t think that this acquisition was a bad move by Abbvie even though their debt increases a lot. Currently Humira sales ($19BN) are bigger than the sales potential of the future drug pipeline ($14BN). Assuming this deal goes through, the new drug pipeline potential (>$29BN) will be much bigger, which means that the Abbvie will be less dependent on Humira.

I did not find the combined statistics of these two companies, so I will not post these this time. In any case, ABBV pays a quarterly dividend of 1,07 $ per share which equals a ridiculous 6,18 % yield.

Summary

Abbvie Inc. was already a part of my portfolio and I now hold a total of 58 shares. These new shares increase my annual passive income by 120,5 and after the purchase weight of ABBV is 4,4% of my portfolio.

Have you purchased any stocks this month? What do you think about this buy? Please share your thoughts in the comment section below!

Thanks for reading.

 

6 thoughts on “Recent Buy – Abbvie Inc.

  1. DivHut Reply

    Like the ABBV buy. Many of our fellow DGI peers have bought that name on its big decline. It should be a good long term winner. Will be interesting to see how it deals with its new debt load. In the meantime, congrats on the capturing that nice yield too.

    • Dividend Deluge Post authorReply

      It feels like half of the recent posts have been about ABBV! I also think it should be a good long term investment, but they really have to act smart with that huge amount of debt. I hope they are able to maintain a low single digit dividend growth and pay off that debt at the same time.

  2. Frugal Fortunes Reply

    Solid dollar cost averaging strategy. ABBV is a solid company and it’s near the top of my buy list. My only hesitations are the slowing economy and coming elections. The elections will add volatility and the healthcare industry will be a punching bag for some of candidates.

    • Dividend Deluge Post authorReply

      Hi Frugal Fortunes! I understand your concern about the healthcare sector and I am too a bit concerned about the upcoming decisions about the regulations. I still think healthcare is one of the best sectors in slowing economy and I am willing to take some risks, as these stocks look undervalued at the moment.

      Thanks for the comment!

  3. Dividend Diplomats Reply

    Deluge,

    This acquisition was quite the announcement and sent some shockwaves through the investing community. A lot of people bought ABBV after their 15% drop. While I am waiting for more info and to see the final debt figures, I’m starting to warm up to the idea of it. Two major, dominating drugs and a massive pipeline. That is one aggressive way to supplement Humira.

    Bert

    • Dividend Deluge Post authorReply

      I agree Bert, it was quite a big announcement! I think we will see a number of ABBV posts in the coming weeks. In my opinion this massive pipeline sounds like a good way to supplement Humira, but I hope they don’t have to cut the dividend because of the debt.

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