Top Picks 2017: AbbVie

01/09/2017 6:00 am EST


Ingrid Hendershot

Founder and President, Hendershot Investments, Inc.

Our Top Pick for income investors for 2017 is a global biotechnology company, explains money manager Ingrid Hendershot, editor of Hendershot Investments.

AbbVie (ABBV) reported third quarter 2016 net sales increased a healthy 8% to $6.4 billion with net income increasing 29% to $1.6 billion and EPS increasing 31% to $.97.

Excluding specified acquisition-related items, net earnings increased 5% to $1.99 billion and EPS increased 7% to $1.21.

Global Humira sales increased 11% to $4 billion, driven by continued momentum across all three major market categories -- rheumatology, dermatology and gastroenterology.

Sales of Imbruvica, AbbVie's treatment for blood cancer, increased nearly 65% year-over-year to $501 million, as sales continue to ramp up on regulatory approvals for new treatment indications.

AbbVie continues to make good progress on its broad pipeline of new products.

As an expression of confidence in its business, AbbVie announced a 12% increase in its quarterly dividend to $0.64 per share. The healthy dividend currently yields more than 4%.  

Since the company's inception in 2013, AbbVie has increased its dividend by 60%. For 2016, AbbVie expects EPS in the range of $3.74 to $3.76 with adjusted EPS guidance raised to $4.80 to $4.82.

Long-term investors should inject AbbVie into their portfolio, a high-quality company with solid growth, a broad product pipeline and a healthy dividend. We rate the stock a Buy.

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