Two leading drugmakers, AbbVie (ABBV) and Amgen (AMGN), have faced significant share declines in recent days following disappointing clinical trial results for their promising candidates. However, these healthcare giants remain attractive income stocks for patient investors.
AbbVie’s recent acquisition of Cerevel Therapeutics has proven costly, with its leading asset emraclidine failing phase 2 studies. The company’s shares have fallen by 13%. Despite this setback, AbbVie is actively pursuing mergers and acquisitions, closing its purchase of Aliada Therapeutics for $1.4 billion in cash and announcing plans to buy out Nimble Therapeutics for $200 million.
AbbVie’s pipeline remains strong, with dozens of ongoing programs and a focus on immunology candidates. The company’s top-performing therapies, Skyrizi and Rinvoq, drove 50% and 45% sales growth in the third quarter, respectively. These two medications will continue to be key growth drivers for AbbVie.
As an exceptional income stock, AbbVie boasts a Dividend King status with 52 consecutive years of payout increases. Its forward yield is around 3.8%, significantly higher than the S&P 500’s average of 1.3%. Despite recent issues, AbbVie is poised to deliver strong returns and dividend growth for an extended period.
Amgen’s recent setback came after positive but not sufficiently impressive phase 2 results for its weight loss candidate MariTide. However, Amgen doesn’t need to capture significant market share to succeed. The company has a promising pipeline, including the recently approved thyroid eye disease treatment Tepezza and asthma medication Tezspire.
Amgen’s revenue increased by 23% year over year in the third quarter, driven in part by its acquisition of Horizon Therapeutics for $28 billion. The company’s dividend growth has been substantial, increasing by 201% in the past decade, with a forward yield of around 3.7%. As an attractive income stock, Amgen is well-positioned to deliver strong returns and dividend growth for investors willing to be patient.
Source: https://www.fool.com/investing/2024/12/23/2-excellent-dividend-stocks-to-buy-on-the-dip