Last year was an excellent year for the major market indices, with the S&P 500 returning nearly 27%. The most popular benchmark beat the Dow Jones Industrial Average and the Nasdaq Composite by the widest margins since 1997.
However, rising government bond yields and unabating inflation have been fostering significant market volatility. Investors are concerned because the Federal Reserve has said that it might be forced to implement interest rate hikes earlier than expected to keep inflation in check.
Given this backdrop, investors looking to sidestep market volatility could add high-yield S&P 500 dividend stocks AbbVie Inc. (ABBV), Merck & Co., Inc. (MRK), and GlaxoSmithKline plc (GSK) to their portfolios now to ensure a steady stream of income.
AbbVie Inc. (ABBV)
Biopharmaceutical company ABBV in North Chicago, Ill., researches, develops, manufactures, commercializes, and sells medicines and therapies. The company is present in various therapeutic categories, including immunology, oncology, aesthetic, neuroscience, and women’s health products.
On Sept. 28, 2021, ABBV announced that the U.S. Food and Drug Administration had approved QULIPTA for the preventive treatment of episodic migraine in adults. It is the first and only oral calcitonin gene-related peptide receptor antagonist developed explicitly for the prophylactic treatment of migraine. The therapy is expected to increase its sales worldwide due to its high efficacy, safety, and tolerability.
Over the last three years, ABBV’s dividend payout has grown at a 13.15% CAGR. Its four-year average dividend yield is 4.52%, and its current dividend payout translates to a 4.12% yield. The company began paying dividends in 2013. It is expected to pay a $1.41 per share quarterly dividend on Feb.15, 2022.
ABBV’s adjusted net revenues for its fiscal third quarter, ended Sept.30, 2021, increased 11.3% year-over-year to $14.34 billion. The company’s net earnings increased 37.7% year-over-year to $3.18 billion, while its adjusted EPS came in at $3.33, representing a 17.6% year-over-year rise.
Analysts expect ABBV’s EPS and revenue to increase 20% and 22.8%, respectively, year-over-year to $12.67 and $56.22 billion in its fiscal 2021. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 25.6% in price to close yesterday’s trading session at $136.97.
ABBV’s POWR Ratings reflect solid prospects. The company has an overall A rating, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Growth, Value, and Quality. It is ranked #11 of 190 stocks in the Medical -Pharmaceuticals industry. Click here to see the additional ratings of ABBV for Momentum, Stability, and Stability.
Merck & Co., Inc. (MRK)
Kenilworth, N.J.-based MRK is a global healthcare company that offers solutions through prescription medicines, vaccines, biological therapies, and animal health products. The company operates in the Pharmaceutical and Animal Health segments.
On Nov. 22, 2021, MRK announced the acquisition of Acceleron Pharma Inc. (XLRN). CEO and President of MRK, Rob Davis, said, “This is an important and strategic opportunity for our company to continue growing our cardiovascular portfolio and pipeline, that builds on our long and proud legacy in cardiovascular disease and further bolsters our business development strategy.”
Over the last three years, MRK’s dividend payout has grown at an 11.21% CAGR. Its four-year average dividend yield is 2.94%, and its current dividend translates to a 3.38% yield. The company began paying dividends in 1989.
For its fiscal third quarter, ended Sept. 30, 2021, MRK’s sales increased 20% year-over-year to $13.15 billion. The company’s non-GAAP net income increased 27% year-over-year to $4.43 billion. Also, its non-GAAP EPS came in at $1.75, representing a 28% increase year-over-year.
For the quarter ending Dec.31, 2021, MRK’s EPS increased 59.2% year-over-year to $1.56. Its revenue for its fiscal 2022 is expected to increase 15.6% year-over-year to $56.29 billion. The stock has gained 12.4% in price over the past month to close yesterday’s trading session at $81.67.
MRK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value, Stability, Sentiment, and Quality. It is ranked first in the Medical -Pharmaceuticals industry. To see MRK’s rating for Momentum, click here.
GlaxoSmithKline plc (GSK)
Headquartered in Brentford, U.K., GSK is a global healthcare company. It operates through two segments: Pharmaceuticals and Vaccines. Its primary research areas include respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, vaccines, immune-inflammation, oncology, and rare diseases.
On December 2, GSK said that laboratory analysis of its antibody-based COVID-19 therapy developed with Vir Biotechnology, Inc. (VIR) is effective against the omicron variant. So, this could lead to increased demand for the solution amid the spread of the omicron variant.
Over the last three years, GSK’s dividend payout has grown at a 10.38% CAGR. Its four-year average dividend yield is 5.27%, and its current dividend translates to a 4.89% yield. The company began paying dividends in 1995. It is expected to pay a %0.52 quarterly dividend per share on Jan.13, 2022.
GSK’s turnover increased 5% year-over-year to £9.07 billion ($12.01 billion) for the third quarter, ended September 30, 2021. The company’s adjusted operating profit increased 8% year-over-year to £2.87 billion ($3.80 billion). In addition, its adjusted EPS came in at 36.60p, up 3% year-over-year.
Analysts expect its EPS for its fiscal 2022 to increase 6.2% year-over-year to $3.23. Its revenue for the quarter ending Dec.31, 2021, is expected to increase 10.8% year-over-year to $12.80 billion. It surpassed consensus EPS estimates in three of the trailing four quarters. And over the past nine months, the stock has gained 22.8% in price to close yesterday’s trading session at $45.04.
GSK’s POWR Ratings reflect solid prospects. According to our proprietary rating system, it has an overall A rating, which translates to a Strong Buy. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
GSK has an A grade for Value and a B grade for Growth, Stability, Sentiment, and Quality. It is ranked #2 out of 190 stocks in the Medical -Pharmaceuticals industry. Click here to see GSK’s rating for Momentum.
Click here to checkout our Healthcare Sector Report
ABBV shares were trading at $136.79 per share on Wednesday afternoon, down $0.18 (-0.13%). Year-to-date, ABBV has gained 1.03%, versus a -0.94% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More…
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