Is AbbVie Stock Too Cheap to Ignore at Today's Price?

• Some valuation metrics suggest that AbbVie is simply a inexpensive stock.

• The company's maturation prospects done 2030 look attractive.

• AbbVie is besides an fantabulous dividend stock.

• 10 stocks we similar amended than AbbVie ›

AbbVie (NYSE: ABBV), a pharmaceutical leader, has faced immoderate challenges implicit the past 3 years. The institution is managing immoderate patent cliffs and objective setbacks that disquieted investors and dinged its banal price. Despite each that, the banal inactive performed good implicit this period. Yet, determination is an statement to beryllium made that AbbVie remains attractively valued and volition turn into its valuation implicit the adjacent 5 years oregon so, delivering market-beating returns successful the process.

Let's see 2 metrics that assistance marque a lawsuit for AbbVie's shares being undervalued astatine existent levels. First, the banal trades astatine 16.8 times guardant earnings. That's somewhat little than the 18.3 mean for the healthcare sector, and the 22.6 mean for the S&P 500. AbbVie's price/earnings-to-growth (PEG ratio) of 0.43 besides puts the banal good wrong the undervalued range. Of course, numbers can't archer america everything. But these two, which are well-respected valuation metrics, astatine slightest suggest that AbbVie is excessively inexpensive to ignore.

Now, let's crook to the company's operations. AbbVie has a lineup of products crossed aggregate therapeutic areas: Neuroscience, oncology, and, of course, immunology, which is its astir important market. The drugmaker has respective maturation drivers. Two of them, Skyrizi and Rinvoq -- some immunosuppressants -- volition beryllium the main ones for the foreseeable future. Combined, they are approved crossed respective indications successful immunology, including plaque psoriasis, rheumatoid arthritis, Crohn's disease, and ulcerative colitis.

Here's the champion part: Neither volition suffer patent exclusivity anytime soon. So, for the adjacent 5 years astatine least, they should assistance AbbVie's gross and net determination consistently successful the close direction. What's more, AbbVie won't look immoderate large patent cliff done the extremity of the 2020s astatine all, adjacent beyond its 2 halfway maturation drivers.

Meanwhile, we tin expect the pharmaceutical person to grow its lineup done caller approvals, fixed its extended pipeline, which features respective twelve products. Even a fistful of approvals oregon statement expansions tin person a meaningful effect.

Lastly, AbbVie is simply a fantastic income stock. The institution is portion of the radical of Dividend Kings, corporations that person accrued their payouts for astatine slightest 50 consecutive years (it inherited this designation from erstwhile it was inactive portion of Abbott Laboratories backmost successful 2013). AbbVie's "streak" is presently astatine 54 years.