AbbVie (ABBV) is a pharmaceutical giant favored by long-term dividend investors, having raised its dividend for 53 consecutive years, making it a Dividend King (at least 50 consecutive years of dividend increases). Its current dividend yield is approximately 2.6%, the lowest level since early 2018. For investors accustomed to yields above 3.5%, this level may not seem appealing, but the article argues that AbbVie remains a solid choice for income-oriented investors.
A declining dividend yield can occur for three reasons: the company cuts its dividend while the stock price stays flat or rises; the stock price rises while the dividend remains unchanged; or both the stock price and the dividend rise, but the stock price rises faster. AbbVie falls into the third category. Since 2013, its dividend payment has grown by nearly 333%, and over the past five years it has grown by 33%; however, the stock price has risen even more over the same period, up about 676% since 2013 and 148% over the past five years, significantly outperforming the S&P 500 Index. Therefore, its yield compression is entirely price-driven.
AbbVie no longer needs to worry about the Humira patent cliff. The two successor drugs, Skyrizi and Rinvoq, are expected to generate combined sales of more than $29 billion in 2026, compared with Humira’s peak annual sales of approximately $22 billion in 2021. In the second quarter of 2026, sales of both immunology drugs grew by more than 24% year over year. In addition, sales of the antipsychotic Vraylar, the migraine therapies Qulipta and Ubrelvy, and the cancer drug Venclexta also maintained double-digit growth. The company’s research and development pipeline includes approximately 90 programs in clinical development, two-thirds of which are in mid- or late-stage testing, not including assets acquired through the recent acquisition of Apogee Therapeutics.
Wall Street does not have high expectations for AbbVie’s near-term upside, with the consensus 12-month price target reflecting only about 5% upside. However, some analysts are more optimistic: Terence Flynn of Morgan Stanley believes the stock could rise 14% over the next 12 months, while Louise Chen of Scotiabank expects gains of nearly 18%.
AbbVie remains worth the attention of income-oriented investors for a simple reason: its dividend is very likely to continue growing strongly. A 2.6% yield is not bad; if the dividend is raised at the average growth rate of the past five years, investors’ yield on cost could easily exceed 4.6% within ten years. Moreover, although the dividend yield is lower than before, the reliability of the dividend remains as strong as ever.
AbbVie’s dividend yield has fallen to a low of 2.6%, mainly due to the rapid rise in its stock price rather than any weakening of its dividend payments. With the growth of new drugs such as Skyrizi and Rinvoq, a rich research and development pipeline, and a decades-long record of dividend growth, AbbVie remains attractive to investors seeking long-term, stable dividend growth.
