Recent Buy – AbbVie (ABBV)
Can’t believe it has been two whole months today since my last buy of T. Guess that is what happens when you need to save up capital for Christmas as well as upcoming tuition payments. December 2017 ended on a big note with milestones broken on dividends collected in a single month and year. Let’s keep that snowball rolling. I am pleased to announce my first buy of 2018!
I purchased 5 shares of AbbVie Inc. (ABBV) at a cost basis of $98.52. You can find more info on ABBV below.
Annual Dividend: $2.84
Years Paying/ Increasing: 5 years
Dividend increase from prior year: 9.9%
Payout Ratio: 51.2%
P/E Ratio: 23.98
“AbbVie is a pharmaceutical company that discovers, develops and markets both biopharmaceuticals and small molecule drugs. It originated in 2013 as a spin-off of Abbott Laboratories (ABT)” (Wikipedia). ABBV has been on my watch list for some time now. I failed to pull the trigger on buying them back when the share price was in the $70s. Now I am paying the price as its share price touches the triple digit mark.
Yes, I realize the current price is upward towards that of its 52 week high. Buying dividend stocks at a discounted value is ideal. But even at the current levels I think it still shows value and we can’t forget about the opportunity cost of not having it.
There are a few of reasons why I choose ABBV. One is the solid history of itself as well as ABT. Both show great history of paying and increasing dividends which is key in any dividend investor’s portfolio. Second, it is located in the Healthcare sector. I find myself lacking in that department currently, so this buy will help a little bit more with diversification.
If you follow Roadmap2retire, every year he polls members of the community about what their top investment pick will be for the year. If you haven’t guessed by now, my choice was ABBV. You can see all picks from the community as well as my reasoning for mine here. My thought process is “How can you support something you wouldn’t or don’t currently own yourself?” So in order to stand by my pick, I decided to put my money where my mouth is and purchase some myself. Should be interesting to see how it performs over the course of this year as well as long term. I can also use this buy as a benchmark price as to lower my cost basis later if I see a dip.
As shown above, ABBV has a dividend yield of 2.89% or $2.84 annually. This will add another $14.20 to my yearly dividend income. Broken down quarterly, it will add $3.55 per quarter. Even though this was a small buy, every little bit counts! And I am happy to finally have this company in my portfolio. It should perform well in the long run.
What do you think of this buy? Do you like ABBV or do you currently own any? What other companies are on your watch list right now? Comments are always welcome below.