Dividend.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
Pharmaceutical giant AbbVie has taken the first position in the list this week, as the company is struggling to get approval for some key drugs. Verizon is second in the list as the telecommunications company rolls out its 5G capabilities and hopes to have a better year in terms of revenues. Third in our list is Enterprise Products Partners, a pipeline operator that has trended recently thanks to its high dividend. The list is closed by Apple, whose CEO Tim Cook unveiled the company’s plans for autonomous cars.
Don’t forget to read our previous edition of trends here.
AbbVie
AbbVie (ABBV) has seen its viewership increase by 27% these past two weeks, taking the top spot in the list. AbbVie, which pays an annualized dividend of $5.20 per share or a yield of 5.20%, has underperformed the broad market, along with the entire biotechnology sector. AbbVie shares are up 2.7% so far this year, while the S&P 500 index rose by 11.6%.
Partly, the underperformance could be explained by the Food and Drug Administration’s delays in allowing drugs to market. AbbVie’s already approved drug Rinvoq received a blow after the FDA requested another review. This FDA decision comes shortly after other drug applications failed to pass, raising worries over whether the FDA has become more stringent in its reviews.
AbbVie hopes to reach peak sales of around $8 billion for Rinvoq, which aims to treat active psoriatic arthritis in adult patients. However, if the treatment gets a strict warning label, AbbVie’s ability to reach these sales targets might prove elusive.
AbbVie sales increased by 37.6% in 2020 to more than $45 billion, on the back of the mega-acquisition of Allergan. However, net income declined by 42% to $4.6 billion.
AbbVie pays out 42% of its earnings to shareholders. The current weakness in the stock price could be a good entry opportunity for dividend investors, especially if the FDA relaxes the approval process.
Source: Barchart.com
Use the Dividend Screener to find high-quality dividend stocks based upon 16 parameters. Stocks with the highest Dividend.com ratings are Dividend.com’s current recommendations to investors.
Verizon Communications
Verizon Communications (VZ) has taken the second place in the list, with its traffic rising 18% over the past two weeks. Verizon has severely underperformed the broad market this year, falling around 2% when the S&P 500 index posted strong gains.
The decline of Verizon stock is counterintuitive. As people were locked inside their homes during the coronavirus pandemic, demand for broadband and data packs surged. Companies like Verizon have invested heavily to maintain good service but so far have failed to benefit from the tailwinds. As telecom companies offer fixed-price contracts, their ability to raise prices is limited.
Indeed, Verizon revenues declined by 2.7% to $128.3 billion in 2020, while net income fell by 7.6% to $17.8 billion. Verizon dividend yields a strong 4.3% on a payout ratio of nearly 50%.
With a strong dividend, focused strategy and beaten-down stock price, Verizon could be a buy for long-term dividend investors.
Source: Barchart.com
Enterprise Products Partners
Oil and gas pipeline operator Enterprise Products Partners (EPD) has seen its viewership rise 17% over the past two weeks, taking the third spot in the list.
The $50-billion market capitalization company has drawn attention from readers after it increased its dividend by 1.1%, a move announced on April 8. Enterprise Products, which has increased its cash distribution for 22 consecutive years, will pay a quarterly $0.45 per unit, or $1.80 on an annualized basis, representing a strong yield of 8.5%.
Shares in Enterprise Products are yet to recover to pre-pandemic levels, remaining down by more than 20% since the start of 2020. Enterprise Products revenues declined by 12% to $7 billion in 2020, while net income collapsed by 69% to $338 million. However, a recovery in oil prices, a strong dividend, as well as strong growth potential, could provide an attractive entry point for dividend investors.
Source: Barchart.com
Check out our latest Best Dividend Stocks List here.
Apple
Technology giant Apple (AAPL) is fourth in the list with an advance in viewership of 10%. Apple has been in the news lately. CEO Tim Cook, in an interview, recently revealed plans for the company to build a car. He said building an autonomous car is like building a robot, but he added the company is investigating “so many things internally” and most products never get to market.
Apple also announced it will hold its next event on April 20, when it is expected to reveal its next version of the iPad Pro, although media outlets reckoned there were problems with production and it might not be widely available.
Apple shares have risen by 4% since the beginning of the year, extending 12-month gains to 87%. The company currently pays a dividend of $0.82 per share, representing a yield of 0.62%.
Source: Barchart.com
The Bottom Line
AbbVie and the broad biotechnology sector have been hit by a FDA that is reluctant to approve drugs. Verizon stock has suffered despite strong demand for broadband from customers locked in homes. Enterprise Products stock increased its dividend, but its stock has yet to recover to pre-pandemic levels. Apple is hosting its next event on April 20, when it is expected to reveal its next iteration of iPad Pro.
Be sure to check out Dividend.com’s News section for next week’s Market Wrap and other great dividend investing news.
