New issues are not typically known for paying juicy dividends,
) is an exception.
The former pharmaceuticals arm ofAbbott Laboratories (
) declared its inaugural dividend last month. AbbVie will pay 40
cents per share on Feb. 15 to shareholders as of Jan. 15.
On an annualized basis, AbbVie pays $1.60 a share, which works
out to a yield of 4.4% vs. about 2.5% for the S&P 500. AbbVie
has the third highest yield among the 15 dividend-paying stocks
in IBD's Medical-Ethical Drugs industry group.
The company was recently added to the S&P 500 Dividend
Aristocrats index, which tracks the performance of big-cap stocks
that have paid increasing dividends for at least 25 years.
Although AbbVie has just declared its first-ever dividend, it was
added to the Dividend Aristocrats due to the S&P's treatment
"We have a solid financial foundation including strong
profitability and robust cash flow," said CEO Richard Gonzalez in
a conference call on Jan. 30. "We have a commitment to return
cash to shareholders including a strong and growing
CFO William J. Chase noted that growth in the company's
dividend is expected to pick up when its pipeline of new drugs
comes to market.
North Chicago, Ill.-based AbbVie spun off from Abbott Labs at
the start of the year. While the parent company focuses on
diagnostic systems, nutritional supplements and medical devices,
AbbVie develops drugs for maladies such as hepatitis C, cancer
and renal disease.
The firm's bread and butter product is Humira, which is used
to treat rheumatoid arthritis, psoriasis and Crohn's disease.
Sales of Humira hit nearly $9.3 billion in 2012, or about half of
AbbVie's annual revenue. The company sees low double-digit
percentage growth in Humira sales in 2013.
The company expects to earn between $3.03 and $3.13 a share in
2013, which is in line with Wall Street's expectations.
AbbVie doesn't have a long trading history and has yet to form
its first base. The stock climbed as much as 10% from its $34.92
Jan. 2 opening price. But it has pulled back in recent