Smart Stock To Buy

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Smart Stock To Buy

AbbVie: A Smart Pharma Stock to Buy

The US interest rate is high, and the Fed is actually raising rates further. On top of that, bond yields are also sitting at record highs.

In such an environment, it may seem like a risky move to buy stocks. However, history tells us that blue-chip stocks tend to outperform all other financial assets over the long term.

With that in mind, the one pharmaceutical stock you can consider buying is AbbVie. Analysts think AbbVie's share price can appreciate over the long run.

AbbVie Is A Dividend King

AbbVie is a popular pharma company and has a long history of paying dividends. The company has been raising its dividend payment for 53 years now.

AbbVie is also considered a Dividend King as it has a history of paying dividends for several decades now. The forward dividend yield of AbbVie is 2.6%.

Back in 2023, AbbVie received a major blow when it lost the patent exclusivity for a drug.The drug was Humira and is used to lower inflammation in autoimmune diseases.

However, the company has acquired and launched several new companies. This includes Cervel, ImmunoGen, Allergan, Rinvoq, and many more.

According to analysts, revenue of AbbVie is expected to grow at a CAGR of 9%. The forecasted CAGR for the adjusted EPS is 21%. These forecasts are for the 2025 to 2028 period.

AbbVie's share price is up by 15% on a YTD basis and is sitting near record highs. However, the AbbVie stock is only trading at a forward P/E of 16. This makes it actually a bargain when we consider its future growth prospects.

The bottom line is that AbbVie stock is a good pharma stock to own if you are a dividend investor. There's also a solid chance that its revenue will continue to grow in the coming years. This could easily translate to higher AbbVie share prices.

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