AGN - Why Does AbbVie Pay a Much Higher Dividend Than Its Peers?
AbbVie (NYSE: ABBV) is a major drug manufacturer best known for its product, Humira, which treats arthritis, Crohn's disease, and plaque psoriasis. At 5.02%, the company's dividend yield is by far the highest among its branded drug peers, with GlaxoSmithKline being the next highest at 4.19%, followed by Pfizer at 3.89%.
While high dividend yields are great for investors who need income with minimal volatility, suspiciously high yields indicate that the market expects the dividend to fall or the stock to depreciate in the future. Is this a dividend stock to buy today?
AbbVie holds patents in several countries for numerous applications for Humira, some of which have already begun to expire outside of the U.S. and will begin to expire domestically in 2023. Such a time frame is worrisome for investors because Humira provided 58% of the company's total revenue in the most recent quarter.