The healthcare industry is among the cheapest sectors in today's market, and this pandemic has validated its importance for the economy and our overall well-being, notes income specialist Rida Morwa, editor of High Dividend Opportunities.
Over the next decade, we will see money pour into the healthcare sector to improve vaccines, therapeutics, public health infrastructure, and to enhance remote care and real-time monitoring capabilities.
AbbVie Inc. (ABBV) has been a high-yielding superstar in the biopharmaceutical industry since its 2013 spin-off from Abbott Laboratories (ABT). It retains its parent company's dividend history and qualifies as a Dividend Aristocrat.
Not just that, but Mr. Buffett has AbbVie in the portfolio of Berkshire Hathaway (BRK.B). With a position of over $2.3 billion, AbbVie is Berkshire's second-largest Dividend Aristocrat holding.
AbbVie has substantial exposure to immunology, oncology, and neuroscience with a portfolio of more than 30 products and a robust pipeline of 56 drugs in development.
The company's blockbuster drug Humira, which accounted for ~37% of the top line in 2020, began losing patent protection in 2016. As a result of the Allergan acquisition completed in 2020, AbbVie was able to diversify its drug portfolio further and reduce its dependency on Humira.
Humira's biosimilars are among the most highly anticipated products, expected to hit the market in 2023. AbbVie projects Rinvoq and Skyrizi as its leading drugs with over $15 billion in sales by 2025. Rinvoq is at its inception stages, with $731 million in 2020 sales.
AbbVie currently yields 4.8%, with a reasonably low payout ratio of 41%. Overall, AbbVie's cheap valuation, robust portfolio, and high yield make it a fantastic addition to a retirement portfolio.