Is AbbVie Inc. (ABBV) the Best Dividend Growth Stock to Buy and Hold in 2025?

AbbVie Inc. (NYSE: ABBV) has been a standout performer in the pharmaceutical industry, consistently delivering strong financial results and rewarding shareholders with a robust dividend growth strategy. As we approach 2025, investors may be wondering if AbbVie is the best dividend growth stock to buy and hold. This article will explore the company's dividend growth potential, earnings growth, and pipeline of new drugs to help you make an informed decision.

"AbbVie's Product Pipeline"

Chart showing AbbVie's revenue growth over the past five years.

Dividend Growth Potential

AbbVie has a 52-year streak of dividend growth, with a five-year annual average dividend growth rate of 7.69%. The company's dividend yield is currently 3.69%, with a quarterly payout of $1.64 per share. AbbVie's commitment to maintaining and increasing its dividend payouts is a testament to its strong financial performance and consistent earnings growth.

Table showing AbbVie's dividend history and growth rates.

Earnings Growth and Revenue Growth

AbbVie's earnings per share (EPS) have grown by 5.7% annually over the past five years, while its revenue has increased by 0.038 annually. The company's strong earnings growth has allowed it to maintain and increase its dividend payouts, as well as invest in research and development to drive future growth.

In the third quarter of 2024, AbbVie reported revenue of $14.46 billion, representing a 4% increase from the same period in the previous year. The Immunology Portfolio generated over $7 billion, growing 4% year-over-year. The company's acquisition of Cerevel Therapeutics for $8.7 billion in cash has bolstered its pipeline with promising drug candidates, such as emraclidine, a potential therapy for schizophrenia.

Pipeline of New Drugs

AbbVie's pipeline of new drugs and therapies has significantly contributed to its dividend growth potential. The company has a well-structured pipeline strategy that has led to the successful development and launch of several blockbuster drugs. Two of these drugs, Skyrizi and Rinvoq, are projected to play a central role in AbbVie's portfolio over the next few years. In the third quarter of 2024, these two drugs generated over $4.8 billion in revenue, and by 2027, they are expected to achieve annual sales exceeding $27 billion across various indications.

In addition to Skyrizi and Rinvoq, AbbVie's pipeline includes over 90 drugs, with 50 of them in mid- or late-stage development. This robust pipeline ensures a steady stream of potential new revenue sources, which can be reinvested into the company and used to support dividend growth.

"AbbVie's Pipeline of New Drugs and Therapies"

Conclusion

AbbVie Inc. (NYSE: ABBV) has demonstrated a strong track record of dividend growth, earnings growth, and revenue growth. The company's commitment to research and development, strategic acquisitions, and a robust pipeline of new drugs and therapies position it well to continue generating revenue and supporting dividend growth in the future. With a dividend yield of 3.69% and a five-year annual average dividend growth rate of 7.69%, AbbVie is an attractive option for investors seeking a dividend growth stock to buy and hold in 2025. However, it is essential to conduct thorough research and consider your investment goals and risk tolerance before making any investment decisions.