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.


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:


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