Many dividend stocks have risen to uncharacteristically high valuations in recent months. In this environment, the best opportunities are in stocks that are still unloved by most investors, states Chloe Lutts Jensen, editor of Cabot Dividend Investor.

With that in mind, our latest recommendation offers a 3.5% yield, strong earnings growth expectations, and a reasonable valuation — it comes from one of the year’s worst performing sectors so far.

AbbVie (ABBV) is a pharmaceutical company spun off from Abbott Labs in 2013. AbbVie’s Humira, a treatment for rheumatoid arthritis and other conditions, was the second-best selling drug in the US last year.

Humira’s net sales topped $14 billion globally for the year, making up approximately 61% of AbbVie’s net revenue.

But the main patent on Humira expires in December, and concerns about competition from biosimilars (generic versions of complicated biotech drugs) have kept the company’s stock under pressure for the last year and a half.

Of course, AbbVie has been diligently preparing for Humira’s day of reckoning. The company has dozens of newer patents — covering Humira’s method of manufacture, formulation and indications — that it believes will keep challengers off the US market until at least 2022.

While there’s no guarantee they’ll succeed, the company is prepared to defend its case in court, which is certain, at a minimum, to cause at least substantial delays.

Longer-term, AbbVie is working hard to develop new sources of income. The company has been on a two-year acquisition spree, climaxing in the $21 billion buyout of Pharmacyclics last year.

Pharmacyclics’ ibrutinib, a blood cancer treatment, is expected to generate $5 billion a year in revenues for AbbVie by 2020.

In addition, AbbVie is investing heavily in its own pipeline, boosting spending on R&D by 30% in 2015. Between its own candidates and those acquired through M&A, AbbVie expects to launch 20 new products by 2020.

AbbVie has plenty of irons in the fire. Analysts are optimistic, expecting EPS to grow 11% this year and 18% next year, and to average 16% growth over the next five years.

With Humira’s loss of exclusivity weighing heavily on analysts’ minds, ABBV hasn’t made any net progress since late 2014.

After a year and a half in purgatory, ABBV presents a compelling value here. The stock’s forward P/E is below 14, while its yield of 3.5% is unusually high for a company delivering double-digit EPS growth.

AbbVie recently announced strong second-quarter results and raised full-year guidance. Second-quarter sales rose 18%, while adjusted EPS of $1.26 easily beat the analyst estimate of $1.20.

The stock is a buy for investors looking to add a reasonably valued dividend payer with strong growth potential to their portfolio.

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By Chloe Lutts Jensen, Editor of Cabot Dividend Investor