The U.S. Gross Domestic Product (GDP) increased at a 2.9% annualized rate in the fourth quarter of 2022, exceeding the Dow Jones forecast of 2.8%. Increases in consumer spending, government spending, private inventory investment, and nonresidential fixed investment drove the fourth-quarter recovery.
Moreover, in December, inflation declined for the sixth straight month, indicating a cooling trend. This encouraged the Fed to slow the pace of its rate hikes, as it raised its benchmark interest rate by a quarter percentage point Wednesday.
However, rate hikes are expected to continue for the time being and might lead the economy to enter a recession this year. Amid this uncertainty, investors' interest in dividend stocks is evident from the SPDR S&P Dividend ETF's (SDY) 6.3% returns over the past three months and 3% over the past six months.
Given the backdrop, fundamentally sound dividend stocks AbbVie Inc. (ABBV), Gilead Sciences, Inc. (GILD), and Sisecam Resources LP (SIRE) could be wise additions to your portfolio now.
AbbVie Inc.(ABBV)
Biopharmaceutical company ABBV engages in the research, development, manufacturing, commercialization, and sale of medicines worldwide. The company's products are segmented into Immunology; Oncology; Anaesthetics; Neuroscience; Eyecare; Women's Health; and Others.
On January 10, 2023, ABBV and Anima Biotech (Anima) partnered to discover and develop mRNA biology modulators for three Oncology and Immunology targets.
Anima will use its mRNA Lightning technology to identify novel mRNA biological modulators for the partnership targets, while ABBV will retain exclusive rights to license, develop, and sell the efforts. Both companies are likely to benefit from this partnership.
On January 9, 2023, ABBV announced that Health Canada had approved QULIPTA for treating episodic migraine. The company's newest addition to its migraine therapy portfolio, QULIPTA, the first and only oral calcitonin gene-related peptide receptor antagonist, is expected to be a game changer in ABBV's portfolio.
ABBV has paid dividends for nine consecutive years. Over the last three years, ABBV's dividend payouts have grown at 9.2% CAGR. While ABBV's four-year average dividend yield is 4.61%, its current dividend translates to a 4.01% yield.
ABBV's net revenues came in at $14.81 billion for the third quarter ended September 30, 2022, up 3.3% year-over-year. Its net earnings increased 24.2% year-over-year to $3.95 billion. In addition, its EPS increased 29.3% year-over-year to $3.66.
Street expects ABBV's revenue to increase 3.8% year-over-year to $58.28 billion for the yet-to-be-reported fiscal year 2022. Its EPS is expected to increase 16.3% year-over-year to $13.76 for the same period. It surpassed EPS estimates in three of four trailing quarters. Over the past year, the stock has gained 7% to close the last trading session at $146.60.
ABBV's POWR Ratings reflect this promising outlook. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ABBV has an A grade for Quality and a B for Growth and Value. Within the Medical - Pharmaceuticals industry, it is ranked #8 out of 171 stocks. Click here to access the additional POWR Ratings for ABBV (Stability, Momentum, and Stability).
Gilead Sciences, Inc. (GILD)
Biopharmaceutical company GILD discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally for over three decades.
On January 3, 2023, GILD announced that the European Medicines Agency (EMA) had approved the Marketing Authorization Application (MAA) for Trodelvy to treat adult patients with previously-treated HR+/HER2-metastatic breast cancer. This is anticipated to help expand patient access to Trodelvy throughout the EU.
GILD has paid dividends for seven consecutive years. Over the last three years, GILD's dividend payouts have grown at 5% CAGR. While GILD's four-year average dividend yield is 4%, its current dividend translates to a 3.48% yield.
GILD's trodelvy's sales came in at $180 million for the third quarter that ended September 30, 2022, up 78.2% year-over-year. The company's current liabilities came in at $10.42 billion for the period ended September 30, 2022, compared to $11.61 billion for the period ended December 31, 2021.
GILD's EPS is expected to increase by 2% per annum for the next five years. It surpassed EPS estimates in three of the four trailing quarters. Over the past nine months, the stock has gained 41.6% to close the last trading session at $84.
GILD has an overall A rating, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Value and a B for Sentiment and Quality. It is ranked #3 out of 402 stocks in the Biotech industry. Beyond what is stated above, we've also rated GILD for Growth, Momentum, and Stability. Get all the GILD ratings here.
Sisecam Resources LP (SIRE)
SIRE engages in the trona ore mining and soda ash production businesses internationally. It processes trona ore into soda ash, a raw material in flat glass, container glass, chemicals, paper, and other consumer and industrial products.
On February 1, 2023, CEO Ertugrul Kaloglu said, "In the current environment of increased uncertainty with interest rates, inflation, and recession concerns, the Partnership remains focused on maintaining a conservative capital structure, working capital management liquidity flexibility to continue to meet future cash flow requirements."
Over the last three years, SIRE's dividend payouts have grown at 10.7% CAGR. While SIRE's four-year average dividend yield is 7.14%, its current dividend translates to an 8.27% yield.
SIRE's total net sales came in at $177.10 million for the fourth quarter ended December 31, 2022, up 13.5% year-over-year. Its net income increased 43.6% year-over-year to $16.80 million. Moreover, its EPS came in at $0.83, up 48.2% year-over-year.
SIRE has gained 19.8% over the past nine months to close the last trading session at $24.17.
It's no surprise that SIRE has an overall A rating, equating to a Strong Buy in our POWR Ratings system.
It has an A grade for Growth and Quality and a B for Value, Sentiment, and Stability. It is ranked first among 87 stocks in the B-rated Chemicals industry. To see SIRE's ratings for Momentum, click here.
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ABBV shares were trading at $144.45 per share on Thursday morning, down $2.15 (-1.47%). Year-to-date, ABBV has declined -9.77%, versus a 8.92% rise in the benchmark S&P 500 index during the same period.
About the Author: RashmiKumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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