Portfolio Update
The FiveTwenty portfolio received $145.90 in dividends in the past week. K, MMM, and ORI paid their quarterly dividend during the week.
| Past Week Dividend | $119.40 |
| Current Quarter Dividend (Q4 2021) | $928.02 |
| LifeTime Dividend | $2,029.35 |
| Estimated Annual Dividend | $3,778.45 |
The capital allocation for the week of 12/19/2021 to 12/25/2021 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 11 of 2021, the company reported Q1 2021 earnings on 04/30/2021, Q2 2021 earnings on 07/30/2021, and Q3 2021 earnings on 10/29/2021. Additionally, the share price increased 19.7% from $108.22 to $129.53 during the same period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 501 years | 491 years | |
| Yield | 4.01% | 4.47% | 3.41% |
| Payout Ratio | 45.82%2 | 46.05%3 | NA |
| P/E | 10.522 | 10.293 | NA |
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 Q3 2021
3 computed using adjusted EPS of $10.56 as of Q4 2020
Q3 2021 earnings report
Did ABBV’s latest earnings report raise any warning flags?
In Q3 2021, ABBV reported revenue growth of 11.9%, adjusted earnings increase of 14.5%, and adjusted EPS growth of 17.7% over the same period a year ago. For the first 3 quarters of 2021 revenue grew 29.3%, adjusted net earnings increased 33.6%, and adjusted EPS were 23.2% higher compared to the same period in 2020.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q3 2020 | $12,902 | $5,953 | $2.83 |
| Q3 2021 | $14,442 | $6,816 | $3.33 |
| % Change | 11.9% | 14.5% | 17.7% |
Additional noteworthy developments during the quarter:
- On 10/29/2021 ABBV increased its quarterly dividend 8.5% from $1.30 per share to $1.41 per share beginning with the dividend payable on 02/15/2022.
Looking ahead, ABBV raised its EPS guidance for the full year. GAAP diluted EPS is expected to in the range of $6.29 to $6.33, previously $6.04 to $6.14, and adjusted diluted EPS between $12.63 to $12.67, previously $12.52 to $12.62.
Thesis
Why are we adding to our position in ABBV?
ABBV has performed well in FY 2021. New products like Skyrizi and Rinvoq have increased sales at an impressive pace and the Allergan acquisition has contributed nicely to growth of both the top and bottom line. Furthermore, with its latest dividend raise the company has reaffirmed its commitment to returning cash to shareholders through a growing dividend.
We continue to believe in ABBV as a source of growing dividend income for the foreseeable future.
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