Cheap dividend company AbbVie $ABBV

AbbVie is one of the largest pharmaceutical companies in the world. It focuses on the development and sale of drugs in areas such as immunology, oncology, neurology, and aesthetic medicine.

Its best-known product was Humira, which for many years was one of the world's top-selling drugs and generated enormous profits for the company. The problem is that Humira gradually lost its patent protection and cheaper competition entered the market.

That's exactly why investors have been asking in recent years whether AbbVie can replace this lost revenue.

So far, it seems so. The company has new growth drugs, mainly:

Skyrizi – treatment of psoriasis and Crohn's disease

Rinvoq – treatment of rheumatoid arthritis and other autoimmune diseases

These two drugs are now growing very quickly and are gradually replacing the revenues from Humira.

From an investor's perspective, AbbVie is interesting mainly because:

✅ it pays a dividend of around 3% annually

✅ it generates strong cash flow

✅ it trades at a relatively reasonable valuation (P/E around 16)

✅ it has a stable and resilient business

On the other hand, the risks include:

❌ dependence on the success of new drugs

❌ patent and regulatory risks

❌ higher debt after past acquisitions

Company transformation

Earnings per share and revenue were negative for a long time, but now? It looks like the situation is starting to turn around.

After several years of decline, analysts expect a return to growth in both revenue and, more importantly, earnings per share. This is significant because the decline caused by the loss of Humira's exclusivity was the main reason investors fled AbbVie in recent years.

But today, Humira is no longer the main story. The new drugs Skyrizi and Rinvoq are becoming the main story, growing at a very rapid pace and gradually taking over as the company's main drivers.

If these expectations materialize, 2026 could be the first year when investors see AbbVie not as a company solving the Humira problem, but as a company that has successfully completed its transformation.

Revenues from these drugs are growing at a rocket pace!

Over the last six years, Skyrizi has managed to grow by an average of more than 90% annually.

Rinvoq has grown even faster, at almost 140% year-over-year!

Growth indicators are coming back to life

When we look at the individual growth indicators, we see that AbbVie is now growing faster than the pharmaceutical sector average in most cases.

Revenue is growing almost 10% year-over-year, EBITDA over 13%, and analysts also expect further acceleration in the coming years.

Growth in operating profit, cash flow, and expected earnings per share also looks very strong.

The only major weakness is the historical EPS results, which were negatively impacted by the Humira decline. But that is exactly why investors today are focusing mainly on the future outlook, not the past.

Overall, this chart suggests to me that AbbVie is no longer a company in decline. On the contrary, it seems that the company is gradually returning to a growth phase and new products are starting to replace the shortfall caused by Humira.

Fair value calculation and my view

Wall Street analysts currently expect that the fair value of the stock could reach approximately $260 per share over the next 12 months, representing an upside potential of around 5%. Interestingly, my own DCF model came out to a fair value of roughly $257 per share, so both approaches show a very similar picture.

That's exactly why I found AbbVie an interesting company to analyze. I also wanted to show you a company outside the tech sector, because most of my videos lately have been focusing on tech. :D

I'll admit that healthcare and the pharmaceutical sector are not areas I primarily focus on. It's not a segment where I feel as comfortable as, say, in tech. Still, I think AbbVie is worth paying attention to.

It's not an outright cheap stock where the market is overlooking an enormous opportunity. On the other hand, it's not an expensive company either.

What do you think about this company?