Geopolitical tensions may offer some clarity for where investors should put their money…
Since the start of 2022, U.S. indexes have been extremely volatile, as the S&P 500, Dow Jones, Nasdaq Composite, and Russell 2000 have all see-sawed over the past two months.
Driving this has been Wall Street’s focus on the Russia-Ukraine crisis… as well as the Federal Reserve’s potential rate hikes.
So far, the central bank has noted that it needs to end its easy-money policies to combat inflation. As a result, Goldman Sachs (GS) believes the Fed will increase interest rates at least seven times in 2022.
Meanwhile, Russia has invaded Ukraine. This not only tanked the country’s own economy and stock market, but also drove declines in European markets… while sending oil prices to dangerously high levels as well.
This has stoked fears in Wall Street and global money managers. However, it has also offered some clarity as to where investors should place their money to protect their portfolios.
In turn, many institutional investors are shifting over to more defensive plays – including dividend-yielding stocks such as AbbVie (ABBV).
AbbVie is an American-based pharmaceutical company, which was originally spun off from Abbott Laboratories in 2013.
It has quickly become a highly-profitable firm that owns the best-selling drug in the world, Humira. Humira is an antibody-based inflammation treatment for diseases such as rheumatoid arthritis.
And even though its patent will run out in 2023, the company has taken significant steps to maintain its dominant market position.
Over the past three years, AbbVie has made a series of strategic investments to diversify its portfolio. In 2020, it finalized its $63 billion purchase of Botox maker Allergan, giving it more than 180 “aesthetic-focused” products.
Meanwhile, AbbVie has also invested in its oncology, virology, and neuroscience divisions. This has resulted in a variety of treatments for cancer, brain-related issues, and other diseases.
This has clearly paid off for the pharmaceutical firm as well. In its fourth-quarter report, AbbVie said its earnings per share were $3.31 compared with the projected $3.28. And its revenue was in line with estimates at $14.89 billion.
And these efforts will likely continue to boost the company as it builds out its businesses moving forward. So, these factors, AbbVie’s consistent revenue stream, and its dividend yield of 3.9% should benefit shareholders through current market volatility.
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