Broader equities have been volatile this year, and there is no telling what may come next. Perhaps geopolitical tensions, inflation, and other macroeconomic factors will intensify, leading to a bear market. We can’t predict that for sure, but as the famous motto goes, it’s always good to be prepared. To that end, it makes sense to invest in rock-solid dividend stocks, which can generally navigate challenging times better than most other corporations. With that said, let’s consider two dividend stocks that look like great buys right now: AbbVie (NYSE: ABBV) and Merck (NYSE: MRK).
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1. AbbVie
Let’s consider two key reasons why AbbVie may be a great stock to own in the current landscape. First, as a pharmaceutical leader, it offers essential products. No one wants to cut back on prescription drugs, and patients who foot only part of the bill (while insurance pays for the rest) aren’t going to be willing to do so even in a downturn. Second, AbbVie has shown that it can overcome one of the most important risks drugmakers face: The dreaded patent cliff.
It navigated the loss of patent exclusivity for Humira, once by far its best-selling product, just fine. Right now, AbbVie is largely counting on two other immunology drugs to drive growth: Skyrizi and Rinvoq. Both medicines are outpacing expectations and should remain AbbVie’s main growth pillars for the foreseeable future. But AbbVie has already begun planning for when they lose patent exclusivity.
The healthcare giant has a deep pipeline that includes products such as ABBV-295, an investigational weight-loss medicine that could appeal to patients thanks to a convenient monthly dosing schedule. It’ll be a long road before ABBV-295 earns approval, but AbbVie’s efforts with this pipeline program, as well as many others, are worth monitoring. By the time the company loses patent exclusivity for Skyrizi and Rinvoq, there is a good chance it will be prepared to replace both drugs.
In the meantime, AbbVie continues posting strong financial results. In the second quarter, the company’s revenue of about $17 billion increased 10% year over year. AbbVie’s adjusted earnings per share (EPS) were $3.65, up almost 23% compared to the year-ago period. Then, there is AbbVie’s strong dividend program. The company is a Dividend King, or a corporation with at least 50 straight annual payout increases. AbbVie’s business and dividend track record make it a table-pounding buy for income-seekers.
