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Considering an investment in AbbVie (ABBV -0.34%) for its appealing dividend potential? If your goal is to generate an annual income of $1,000 from dividends, understanding how many shares to purchase requires straightforward calculations.
As of now, AbbVie shares are priced at approximately $212 each, and the company distributes an annual dividend totaling $6.56, paid across four quarters. While dividend amounts can fluctuate, this figure serves as a basis for your calculations.
To ascertain how many shares are needed to reach your $1,000 income target, divide $1,000 by the current annual dividend of $6.56. This calculation reveals that you would need to acquire 152 shares to achieve your desired dividend income. At the current share price, the total investment would amount to roughly $32,224.
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This amount may be considerable for many investors. Concentrating such a large portion of your portfolio into a single stock, like AbbVie, poses significant risks, as it increases exposure to potential market fluctuations. Diversifying your investments by including other strong dividend-paying stocks could mitigate risk.
It’s also worth noting that AbbVie has a history of increasing its dividends annually. If you decide to invest for an income of, say, $300, there’s a good chance this payout will rise over the years.
Evaluating the Investment Potential of AbbVie
AbbVie has emerged as a compelling investment option. Established as a spin-off from Abbott Laboratories in 2013, the company has quickly made a name for itself in the international pharmaceutical landscape, boasting a market capitalization near $380 billion. It offers a range of treatments in areas such as immunology, oncology, aesthetics, neuroscience, and ophthalmology.
Investor enthusiasm stems from AbbVie’s recent ventures into the weight loss medication market and its attractive dividend yield, currently at 3.1%. Over the past five years, the dividend has experienced an average annual growth rate of 7%. However, some analysts express caution regarding the potential revenue declines related to the expiration of patent protections for significant products like Humira. On a positive note, AbbVie does have new therapeutics that are gaining traction in the marketplace.
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www.fool.com