Portfolio Update
The FiveTwenty portfolio received $178.61 in dividends in the past week. ABBV, CAT, and PG paid their quarterly dividends during the week.
| Past Week Dividend | $178.61 |
| Current Quarter Dividend (Q2 2023) | $817.47 |
| LifeTime Dividend | $10,991.05 |
| Estimated Annual Dividend | $9,268.65 |
The capital allocation for the week of 05/21/2023 to 05/27/2023 will be used to add to our position in AbbVie Inc (NYSE: ABBV)
ABBV – Position Update
Since our last check-in on ABBV in week 51 of 2021, the company reported FY 2021 earnings on 02/02/2022, FY 2022 earnings on 02/09/2023, and Q1 2023 earnings on 04/27/2023. In addition, the share price increased 12% from $129.53 to $145.11.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 511 years | 501 years | |
| Yield | 3.98% | 4.01% | 3.52% |
| Payout Ratio | 44.16%2 | 45.8%3 | |
| P/E | 11.092 | 10.523 |
1 includes the dividend streak ABT before ABBV was spun off, as in independent company the streak is 10 years
2 computed using adjusted EPS of $12.31 as of Q1 2023
3 computed using adjusted EPS of $12.31 as of Q3 2021
Q1 2023 earnings report
Did ABBV’s latest earnings report raise any warning flags?
Q1 2023 was the first quarter during which Humira biosimilar were available in the US market. As such sales for Humira saw a 26.1% decreased compared to the year ago quarter. Offsetting some of this decline were increases of 44.7% and 47.5% in Skyrizi and Rinvoq respectively. The company also experience strong growth in neurology and oncology from Botox and Vraylar respectively. Overall, revenue declines 9.7%, adjusted earnings decreased 22.3%, and adjusted EPS were 22.2% lower.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q1 2022 | $13,538 | $5,641 | $3.16 |
| Q1 2023 | $12,225 | $4,385 | $2.46 |
| % Change | (9.7)% | (22.3)% | (22.2)% |
Looking ahead, the company increased its EPS guidance for the year to $10.72 – $11.12 per share, from $10.62 – $10.02 per share previously. The increase is in response to first quarter revenues and EPS being ahead of expectations.
Thesis
Why are we adding to our position in ABBV?
Based on the Q1 2023 performance, the effect of the loss of exclusivity for Humira and the performance of the rest of the portfolio seem to be in line with expectations. The company seems to be on track to replace the lost revenue from Humira from its new products.
Furthermore, the pullback in the share price following the Q1 2023 earnings report creates an opportunity to add to our position at a fair valuation.
Previous Articles
- 2021 Week 51: AbbVie Inc (NYSE: ABBV)
- 2021 Week 11: AbbVie Inc (NYSE: ABBV)
- 2021 Week 4: AbbVie Inc (NYSE: ABBV)
Additional Research
- Is There An Opportunity With AbbVie Inc.’s (NYSE:ABBV) 43% Undervaluation? (yahoo.com)
- Analysts Are Cutting Price Targets of These 5 Stocks – Insider Monkey
- Dividend Aristocrats In Focus: AbbVie – Sure Dividend
Photo by National Cancer Institute on Unsplash
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