AbbVie’s Long-term Outlook Remains Volatile

AbbVie (ABBV) was spun off from Abbott Laboratories (ABT) in 2013 as a standalone biopharmaceutical company focused on four primary therapeutic areas: immunology, oncology, virology, and neuroscience. The company's drugs treat conditions such as chronic autoimmune diseases in rheumatology, gastroenterology, and dermatology; oncology, including blood cancers; virology, including hepatitis C (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis; as well as other serious health conditions. The company's blockbuster arthritis drug Humira accounts for approximately 60% of sales and an even greater share of AbbVie's profits (70%). In order to diversify away from Humira, which accounted for nearly all sales and earnings at [...]

February 6th, 2019|

Cardinal Health’s Dividend Safety

Cardinal Health's (CAH) stock price has slumped nearly 40% over the last two years, driving its dividend yield to a record high of 4.4% in late 2018. Dividend aristocrats such as Cardinal Health are often owned under the assumption that they will generate safe, growing income while recording healthy total returns and low stock price volatility compared to the broader market. However, not all aristocrats live up to the group's impressive long-term track record. Cardinal Health's weak performance has some investors wondering if the market might be signaling that the company's dividend has become unsafe, or at the very least that the firm's long-term growth prospects have dimmed.

February 5th, 2019|

National Retail: Higher Dividends for 29 Straight Years

Founded in 1984, National Retail Properties (NNN) is one of America's oldest triple net lease, or NNN, REITs. The company follows a "sale-leaseback" model in which it will buy a property from an existing tenant and then rent the property back to the former owner under long-term (15 to 20-year) contracts. The average remaining lease term is 11.4 years, and just 5% of leases expire through the end of 2020. Triple net lease contracts require the tenant to pay for insurance, maintenance, utilities, and property taxes. National Retail Properties thus serves purely as a landlord, collecting a recurring stream of rent from which it pays its steadily growing dividend. These leases also have annual rental escalators built in (about 1.5% [...]

February 4th, 2019|

Altria Prepares for Evolving Tobacco Market

Founded in 1919 in Richmond, Virginia, Altria (MO) is America’s largest tobacco company. The business split into three separate firms in 2007 and 2008 (Altria, Phillip Morris International, and Kraft), with Altria retaining all domestic tobacco operations. Altria has exclusive U.S. rights to sell cigarettes primarily under the Marlboro, Parliament, Virginia Slims, and Benson & Hedges brands. The company also markets cigars (Black & Mild), chewing tobacco (Copenhagen and Skoal, Red Seal, and Husky brands), and table wines under the Chateau Ste. Michelle, Columbia Crest, and 14 Hands brands. In recent years, Altria has invested heavily into non-combustible reduced-risk products to adapt its long-term business model for an eventually smoke-free world. One area of focus is the IQOS nicotine delivery [...]

February 4th, 2019|
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