AbbVie has increased its dividend by more than 330% since 2013.
It has a robust pipeline of drugs in development and growing revenue, too.
It's smart to seek dividend income from your investments because it can be used to help pay living expenses or to buy more stock. A solid dividend-paying stock to consider is pharmaceutical company AbbVie (NYSE: ABBV), which was spun off from Abbott Laboratories in 2013. The stock recently sported a 3.38% dividend yield, far above the average yield of 1.1% for stocks in the S&P 500.
If you're looking for, say, $10,000 in annual dividend income, how many shares of AbbVie do you need to buy?
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Well, start by noting that the company's last quarterly dividend payment was $1.73 per share. The yearly run rate, then, is $6.92 per share. So divide $10,000 by $6.92, and you'll get 1,445 -- the number of shares you'd need. With the stock recently trading around $205 per share (as of March 24), those 1,445 shares would cost you a hefty $296,225. (Fortunately, you can always buy fewer than 1,445 shares!)
One reason to consider investing in AbbVie is that it's a rather reliable dividend payer -- and dividend grower. Since 2013, it has upped its payout by more than 330%. Better still, when you combine its history with that of Abbott Labs, you'll see that it has increased its payout annually for more than 25 years. So the $10,000 (or other sum) that you collect in dividends this year could be much more after a few years.
The dividend is not the only reason to consider AbbVie. It's a strong grower in general, with its stock averaging annual gains of 16.2% over the past decade. Its 2025 revenue was up 8.6% over the year before -- despite its having lost patent protection for its blockbuster drug, Humira. Its pipeline of 90-plus drugs in development is promising, too.
AbbVie's stock is reasonably priced, with a recent forward-looking price-to-earnings (P/E) ratio of 14, a bit above the five-year average of 13.
Before you buy stock in AbbVie, consider this:
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Selena Maranjian has positions in AbbVie. The Motley Fool has positions in and recommends AbbVie and Abbott Laboratories. The Motley Fool has a disclosure policy.