How Many AbbVie Shares Do You Need for $1,000 in Yearly Dividends?

Investing in dividend stocks is a smart strategy for generating passive income, especially in volatile markets. AbbVie (ABBV) is a well-known biopharmaceutical company that has consistently increased its dividends over the years, making it an attractive option for income-focused investors. In this article, we'll explore how many shares of AbbVie you need to own to achieve $1,000 in yearly dividends and discuss the implications of AbbVie's dividend growth rate on your investment strategy.

Understanding AbbVie's Dividend Yield and Payout Ratio

As of March 20, 2025, AbbVie's dividend yield stands at 2.96%, which is lower than its historical averages. Over the past 13 years, the highest trailing annual dividend yield was 6.30%, the lowest was 2.08%, and the median was 3.66%. This suggests that AbbVie's current yield is at a relatively low point compared to its historical performance.

AbbVie's dividend payout ratio for the quarter ended in December 2024 is 0.72. Historically, AbbVie's dividend payout ratio has ranged from a minimum of 0.41 to a maximum of 0.61, with a median of 0.46. The current payout ratio of 0.72 is higher than the historical median and maximum, indicating that AbbVie is paying out a larger portion of its earnings as dividends compared to its past performance.

How Many Shares Do You Need to Own?

To determine how many shares of AbbVie you need to own to achieve $1,000 in yearly dividends, we need to consider the current dividend per share and the dividend growth rate.

As of December 2024, AbbVie's Dividends per Share for the three months ended in Dec. 2024 was $1.55. This means the annual dividend per share is $1.55 * 4 = $6.20.

To achieve $1,000 in annual dividends, an investor would need to purchase:
Number of shares = $1,000 / $6.20 per share = 161.29 shares

Since an investor cannot purchase a fraction of a share, they would need to purchase 162 shares to achieve at least $1,000 in annual dividends.

The Impact of Dividend Growth Rate

If the dividend growth rate continues at the 5-year average of 7.80% per year, the number of shares needed to achieve $1,000 in annual dividends would decrease over time. For example, after one year, the dividend per share would increase to:
New dividend per share = $6.20 * (1 + 0.078) = $6.68

To achieve $1,000 in annual dividends with the new dividend per share, an investor would need to purchase:
Number of shares = $1,000 / $6.68 per share = 149.70 shares

Again, rounding up, the investor would need to purchase 150 shares.

However, if the growth rate fluctuates, the number of shares needed could change. For instance, if the growth rate decreases to 4.70% per year (the average over the past 12 months), the new dividend per share after one year would be:
New dividend per share = $6.20 * (1 + 0.047) = $6.49

To achieve $1,000 in annual dividends with this new dividend per share, an investor would need to purchase:
Number of shares = $1,000 / $6.49 per share = 154.08 shares

Rounding up, the investor would need to purchase 155 shares.

Visualizing AbbVie's Dividend Growth



Conclusion

In summary, an investor would need to purchase 162 shares today to achieve $1,000 in annual dividends. If the growth rate continues at 7.80%, the number of shares needed would decrease to 150 after one year. If the growth rate fluctuates to 4.70%, the number of shares needed would be 155 after one year.

AbbVie's consistent dividend growth and strong track record make it an attractive option for income-focused investors. However, it's essential to consider the company's financial health and future earnings prospects to ensure the sustainability of its dividend payments. By understanding AbbVie's dividend yield, payout ratio, and growth rate, investors can make informed decisions to achieve their income goals.