AbbVie share price has come to my investable level – it doesn’t mean that I am closing my eyes and buying immediately. It means that it is a high time to have another look at company.

I wrote in my last note:

From financial perspective company is paying a decent yield of around 3.7% and is expected to grow by double digit numbers by 2020 (wow!). This with not demanding valuation seems for me as a good opportunity. After a second consideration I think I like company more than previously. I am raising my investable level to $55.

If we look on last financial results we can see that company is growing very fast, however in last 3 months it was only 7% on EPS adjusted basis.

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AbbVie, similarly to Gilead has strong product concentration. The main difference is that sales of AbbVie’s key product (Humira) is growing, but also that patents expire sooner than in GILD:

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Business is doing well, so management raised full-year 2016 guidance to $4.80 to $4.82. This means P/E ratio of around 11.6, not expensive. Also dividend yield is compelling at 4.6%. Also we should note, that dividend is growing very fast. On the other hand number of shares outstanding were rising on average 1% annually. Not good.

 

Well, AbbVie looks like a clear, but risky, buy for me. I am wondering what will happen with pharma sector after US Elections. I am considering investments from portfolio perspective, where my last two buys are exposed on healthcare (GILD & CAH), so I am not really sure I should increase my exposure. On the other hand it would be a nice dividend yield increaser. Well, I need to think it over again…

 

Disclaimer ABBV – no position