The pandemic driven recession isn’t even a speed bump for AbbVie (ABBV), a biopharmaceutical giant — and that’s a big deal as this company won’t have to recover, asserts Tom Hutchinson, growth and income expert and editor of Cabot Dividend Investor.
Its new drugs and pipeline continue to excel and they closed the deal to buy Allergan (AGN). Investors are increasingly coming around to the view that its pipeline can offset the increased Humira competition. At the same time, the sector is in the sweet spot of this market.
AbbVie recently jumped into the coronavirus race, announcing a collaboration to develop a novel antibody therapeutic to prevent and treat COVID-19. AbbVie will have an exclusive license to sell it if and when it is successful.
It’s unlikely to move the needle for the overall company, but you never know, and the market seemed to like it. The move also further established AbbVie as a cutting edge pharmaceutical company at a time such companies are in high demand while the population ages at warp speed.
Healthcare is naturally defensive and biotech is sexy. The biotech index just hit a new all-time high. This is still one of my very favorite stocks in this market and I’m comfortable holding it through any type of market.
The stock isn’t far from the 52-week high. That said, the price is still a long way from the 2018 high and still represents a good value. With a 4.9% dividend yield, I rate the stock a buy.
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