The writing is on the wall, and seasoned investors know it. Anytime you have a move close to 1000 points in the venerable Dow Jones industrial average and you give it all back the next day like we did at the end of last week, that’s a signal that fund managers are selling each rise and savvy hedge fund portfolio managers try to wipe out as much margin debt as possible. While it may seem impossible for millennials to trade stocks on Robinhood, when the market crashed in 1987, in metrics very similar to today’s, the Dow fell 22.6 % in one day.
With rising yields and a 50 basis point hike in the fed funds rate coming this week, safe corporate bonds are hardly the best idea right now. Often, when income investors seek companies that pay big dividends, they are drawn to dividend aristocrats, and with good reason. The 66 companies that made the cut for the 2022 S&P 500 Dividend Aristocrats list have increased their dividends (and not just stayed the same) for 25 consecutive years. But the requirements go even further. The following attributes are also required to be a member of the touted list:
- Companies must be in the S&P 500 index.
- They must be worth at least $3 billion at the time of each quarterly rebalancing.
- Their average daily volume must be at least $5 million in trades for each three-month period on each quarterly rebalance date.
With the potential for a major correction looming, we thought it would be a good idea to look for companies on the Dividend Aristocrats list that are in defensive sectors but look set to do well for the rest of 2022. Eight stocks are hitting our screens, all of which are rated buy at top Wall Street companies. It is important to remember that no single analyst report should be used as the sole basis for any buy or sell decision.
It is one of Wall Street’s top pharmaceutical stock picks. AbbVie Inc. (NYSE: ABBV) is a global research-based biopharmaceutical company established in 2013 following the spin-off from Abbott Laboratories. The company develops and markets drugs in areas including immunology, virology, kidney disease, dyslipidemia and neuroscience.
One of AbbVie’s biggest concerns is what could possibly happen with anti-inflammatory therapy Humira, which has some of the biggest sales ever for a drug. The company was worried, so in June 2019 it announced it had agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies were willing to pay the price. high price to resolve questions about their future growth. The purchase officially closed in May last year.
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AbbVie may be nearing the limits of its ability to raise the price of Humira as cheaper competitors enter the market, a problem Allergan is already facing as new alternatives to Botox emerge.
Shareholders receive a dividend of 3.85%. JPMorgan has a high Wall Street target price on AbbVie stock of $180. The consensus target is $163.99. The stock closed Friday trading at $146.88.