A Dose of AbbVie Stock Can Help Your Bear Market Portfolio
AbbVie (NYSE: ABBV) is a conventional stock for unconventional times. And that's exactly why it makes sense to add or hold in your bear market portfolio.
A growing dividend and expanding pipeline are two reasons to invest in ABBV stock
AbbVie (NYSE: ABBV) is a conventional stock for unconventional times. And that's exactly why it makes sense to add or hold in your bear market portfolio. The company offers a stable and growing dividend that helps to boost your total return no matter what happens in the day-to-day market.
I really want you to focus on the last part of that sentence. Every active investor has a bit of a speculator inside of them. It's part of the fun and the challenge. However, bear markets can humble the best of us, and they are a time when it's good to get back to basics.
That doesn't mean pulling your cash out of the market or only investing in fixed-income securities. It means putting quality first. That lets you take a less passionate look at the daily ups and downs of the market … and maybe sleep better at night as well. It's that peace of mind that is at the core of my reasoning for investing in ABBV stock during this bear market.
What Will AbbVie Report This Earnings Season?
AbbVie reports its second-quarter earnings on July 29, 2002. That will be right around the time the Federal Reserve makes its announcement on interest rates. So things may get a little noisy for reasons that have nothing to do with AbbVie's fundamentals.
On its last earnings call, AbbVie forecasted revenue of $14.6 billion with earnings per share (EPS) between $3.38 and $3.42. The analysts tracked by MarketBeat are taking a bearish tone with a consensus EPS of $3.29. This may owe to the fact that AbbVie narrowly beat on EPS last quarter and missed on revenue.
On the other hand, Morgan Stanley (NYSE:MS) recently raised its price target for ABBV stock to $191. That's approximately 20% higher than the consensus estimate.
A Company With a Deep Bench
Investors are concerned about the company's loss of patent protection on Humira, its flagship drug. However, as I and others have written about before, AbbVie has launched new drugs such as Skyrizi and Rinvoq that are beginning to help the company diversify away from Humira.
Plus, AbbVie is in the early stages of building out what could be a profitable portfolio through its acquisition of Allergan. And in June, the company got a recommendation for approval by the European Medicines Agency's Committee for Medicinal Products for Human Use.
The recommendation allows for an expanded label with Rinvoq in the treatment of adults with active non-radiographic axial spondyloarthritis. The company may receive official approval in the current quarter.
An Investment Fit for a King
Whenever I write about AbbVie, I always mention the dividend. That's not without reason. In 2021, AbbVie became part of the Dividend Kings club. This is a group of companies who have increased their dividends for at least 50 consecutive years. ABBV stock currently pays out $5.64 per share on an annual basis.
Protect Your Wealth with ABBV Stock
Investing is about building wealth slowly. That's the advantage of buying stock of a company like AbbVie. The company has products in market now and an expanding pipeline that will allow the company to deliver stable revenue and earnings in the future.
History says that the average bear market has lasted 289 days (approximately nine months). But several of the 26 bear markets since 1929 have lasted longer than one year. Plus, the average decline in a bear market is around 34%. That suggests the major indexes may have a way to go.
That knowledge and about $5 these days will buy you a cup of coffee. The fact is that there's no telling how long this bear market will last. Which is even more reason to put your portfolio in a position to succeed with quality stocks of companies that have products that will remain in demand – and pay you a dividend for your patience.
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