AbbVie is the proprietary pharmaceuticals business previously spun out of Abbott Laboratories – given its nature of business, it can be considered, while it is a pharma company, as a pure value company.
ABBV is undervalued, with underappreciated growth and an attractive dividend yield at 3.6%. ABBV is a leader in immunology, hematology/oncology, and aesthetic medicine. All three are growing, in terms of potential users, end-markets, and ABBV’s strong position within those markets segments enables it to grow and diversify away from its leading immunology product Humira.
Medium term, we expect ABBV will continue to outperform on earnings and increase its dividend payment annually. Risks to the thesis include market share losses in ABBV’s core franchises and onerous drug pricing legislation.