AbbVie Inc (NYSE:ABBV) Announces Huge Dividend Increase
AbbVie Inc Raises Dividend, Increases Buybacks
This has got to be one of the biggest dividend increases from a mega-cap stock this year.
On Thursday, February 15, AbbVie Inc (NYSE:ABBV) announced that its Board of Directors has declared a quarterly cash dividend of $0.96 per share. This represented a 35% increase from its previous quarterly dividend rate of $0.71 per share. The dividend will be paid on May 15, 2018 to shareholders of record as of April 13. (Source: “AbbVie Increases Dividend and Announces New Stock Repurchase Program,” AbbVie Inc, February 15, 2018.)
To long-term investors of ABBV stock, Thursday’s announcement shouldn’t come as a surprise. Since the company came into existence as a spin-off from Abbott Laboratories (NYSE:ABT) in 2013, it has raised its payout every single year by a total of 140%. (Source: “AbbVie Inc. Dividend Date & History,” Nasdaq.com, last accessed February 15, 2018.)
The dividend hike is backed by a growing business. AbbVie reported earnings last month. In the full year 2017, the company generated adjusted earnings of $5.60 per diluted share, representing a 16.2% increase from the prior year. (Source: “AbbVie Reports Full-Year and Fourth-Quarter 2017 Financial Results,” AbbVie Inc, January 26, 2018.)
Mind you, paying a dividend is not the only way through which this pharmaceutical company returns value to investors. AbbVie Inc also buys back its shares. On Thursday, the company announced a new $10 billion share repurchase program. This would lower the number of shares outstanding for ABBV stock, allowing each existing shareholder to own a slightly larger portion of the company.
The stock market liked the news. Shares of AbbVie Inc stock rose 1.56% on Thursday to $114.90 apiece. The company now offers a forward dividend yield of 3.34%.