Is AbbVie the Best Dividend Stock for You?

It was great while it lasted, but AbbVie 's (NYSE: ABBV) most important cash cow -- rheumatoid arthritis treatment Humira -- has been out of patent exclusivity in the U.S. since last year. That's not the only change the drugmaker experienced in the past 18 months. AbbVie also replaced its leader as CEO Richard Gonzalez stepped down; Gonzalez had been at the helm since 2013.

The pharmaceutical giant delivered excellent returns and consistent dividend growth under Gonzalez's tutelage, largely thanks to Humira's prowess. Will AbbVie remain an outstanding dividend stock as it enters a new era?

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AbbVie's business still looks strong

It's important to give credit where credit is due. Even without Humira, AbbVie has a rich lineup of products across several therapeutic areas, from immunology and oncology to neuroscience and eye care. Last year, the drugmaker had 11 blockbuster products, not including its former crown jewel -- which, by the way, still generated $14.4 billion in sales.

That number will keep dropping, but AbbVie is already doing more than enough to offset those losses. In the first quarter, AbbVie's revenue increased by 0.7% to $12.3 billion. That's not particularly impressive year-over-year top-line growth, but context matters. Considering AbbVie lost patent exclusivity for a medicine that not only generated $21.2 billion at its peak but is also one of the top-selling medicines in the industry's history, the fact that revenue is moving in that direction at all is impressive. Management initially expected to get back to top-line growth in 2025.

Though AbbVie's lineup is diversified, two medicines are doing much of the heavy lifting: Skyrizi and Rinvoq, the heirs to Humira in the company's immunology department. These drugs have earned many of the same indications as their predecessors, and AbbVie thinks they'll generate combined revenue of more than $27 billion by 2027 and keep growing their sales well into the 2030s.

For reference, their combined revenue in 2023 was $11.7 billion. Skyrizi grew its sales by 50.3% year over year and Rinvoq by 57.4%. None of AbbVie's other products got close to revenue growth in that neighborhood.

Expanding the pipeline

AbbVie's current lineup should allow it to perform well in the medium term, especially once the financial effects of Humira's patent cliff become irrelevant. However, the company isn't resting on its laurels; its pipeline is impressive enough as it stands, boasting several dozen programs across all three clinical trial phases. AbbVie is seeking many label expansions for its most important products, including Skyrizi, Rinvoq, cancer drug Venclexta, and more.

But there are also some brand-new medicines in the company's pipeline. For instance, ABBV-399 is a potential cancer drug in phase 3 testing. It's being developed to treat non-small cell lung cancer with overexpression of the protein c-MET. There are no approved medicines that specifically target patients with this type of cancer; ABBV-399 could become the first. The U.S. Food and Drug Administration granted it the breakthrough therapy designation, an honor reserved for investigational medicines that treat a serious condition and for which there's promising clinical evidence of efficacy compared to existing standards of care.

AbbVie's pipeline features many more brand-new therapies. And the company is still looking for more through deals and mergers. In December, it announced it would acquire Cerevel Therapeutics , which focuses on neurological disorders, for about $8.7 billion in cash. Whether through acquisitions or internal development, AbbVie has consistently found a way to market successful new products. That won't stop anytime soon.

Trust the process

AbbVie has undergone significant changes, but remains strong based on its financial results, lineup, and pipeline.

The company is still committed to growing its dividend, as evidenced by the fact that it didn't stop doing so once Humira lost patent exclusivity. AbbVie is a member of the exclusive group of Dividend Kings -- its current streak of consecutive dividend increases stands at 52 years. The cash payout ratio is conservative at less than 49%, and its stock now offers a forward yield of 3.6%.

Expect the future to look much like the past for the drugmaker. AbbVie is a terrific dividend stock for long-term investors.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .