My Favorite Dividend King to Buy in November
Certifications such as the Good Housekeeping Seal help consumers know which products are safe and perform well. Unfortunately, no Good Housekeeping Seal exists for dividend stocks.
However, arguably the next best thing is for a company to belong to the elite group known as Dividend Kings. To qualify, a company must increase its dividend for at least 50 consecutive years. Most income investors will sleep better at night knowing that a stock has such an impressive dividend track record.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
But some Dividend Kings are better than others. Which is the best pick right now? Here’s my favorite Dividend King to buy in November.
Technically, AbbVie (NYSE: ABBV) has only been around since 2013. That doesn’t mean the big pharmaceutical company can’t be a Dividend King, though. AbbVie’s business operated for decades as part of Abbott Laboratories before being spun off as a separate publicly traded entity 11 years ago.
AbbVie, therefore, inherits the rich dividend history of its parent. In September, Abbott announced its 52nd consecutive annual dividend increase. Last week, AbbVie followed suit with its latest dividend increase.
Plenty of Dividend Kings have longer streaks of dividend hikes than AbbVie. Few, if any, though, can match the drugmaker’s level of dividend increases in recent years. Since its spinoff from Abbott, AbbVie has raised its dividend payout by a whopping 310%.
Some Dividend Kings don’t offer princely dividend yields. However, AbbVie’s forward dividend yield is 3.26% — nearly 2.7 times higher than the yield of the S&P 500 (SNPINDEX: ^GSPC). The big pharma stock’s yield would be even higher, except AbbVie’s share price has soared 30% this year.
I think AbbVie’s momentum will continue. Some investors have worried about the negative impact of declining sales of Humira, the company’s top-selling drug, with its loss of patent exclusivity last year. Not me. I’ve been confident in AbbVie’s strategy to navigate these challenges, and my confidence appears to be paying off.
In the third quarter of 2024, Humira’s sales fell 36.5% year over year on an operational basis due to biosimilar competition. Yet AbbVie’s overall revenue increased, with the company delivering sales that were $260 million above its expectations. How did the drugmaker manage this feat? By investing in research and development and making smart acquisitions.
Leave a Reply