Finding The Edge
For some investors, a stock with a high dividend yield is enough. They do not need complexity to explore a company with a capital gain. And, the most fun part is, they do not worry about the fall of the share prices. This is dividend investing.
Simple at a glance doesn’t mean it is free from problems or pitfalls. A high dividend yield in some cases is not sustainable. Worse, it is an indication that management can reinvest its business, lead to no growth for the company. In turn, will be followed by no dividend growth.
Investingdeck here to answer that question. For dividend investing, earning sustainability is important. When earning is predictable, so does the dividend. Companies like AbbVie – with its largest revenue contribution – will fade in the upcoming years, this issue will be crucial.
Another question for dividend investing is, Where does the dividend come from? A company like Starbuck pays the dividend more than the generated cash – so does Exxon. We don’t think it goes well for investors.
Our method is to explore the financial report, make an investigation, connecting the dot, and make a conclusion. Further, we also examine its competitive advantage, as we ever said, financial is just a number, it is a result of business strategy, market position, product execution, an economic moat. Analyzing this is our edge, and yours, as our reader.
Our preference is a company with growing dividends paid with a strong competitive advantage and healthy cash flow.
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The biggest issue is of course the patent of Humira which will expire in 2023. If sales of that antirheumatic drug tumble, dividends will consequently follow and make AbbVie’s status as a dividend darling questionable. Here we try to dig deeper and give a detailed perspective about what really happens through our AbbVie dividend stock analysis.
Continue reading “Abbvie Dividend Stock Analysis: Patents Play”