Investors are now in the midst of the final earnings season of 2022. Companies often cap their reporting year with a dividend raise, and the raising has been relatively brisk lately. Businesses of every size and in every sector are adding to their payouts.
Two giants in their respective industries, AbbVie (ABBV 0.40%) and Visa (V 0.19%), are among that group of lifters. Let's take a closer look at these two companies' still-fresh dividend increases -- and why it could make them attractive for investors.
Being the developer of the world's top-selling drug sure has its privileges. AbbVie is the company behind Humira, the blockbuster treatment for rheumatoid arthritis and a set of other afflictions whose sales approached a staggering $20 billion-plus last year.
With a number like that from one drug alone, it's no wonder AbbVie is generous with its distribution; in fact, it's one of the stock market's rare Dividend Kings with a five-decade streak behind it. Concurrent with the release of its latest earnings report, the company announced a 5% dividend increase to $1.48 per share.
There's one giant caveat regarding Humira -- it's in the process of losing its patent protection (no, the company didn't do anything wrong; drugs approved in most major jurisdictions like the U.S. are guaranteed only limited patent exclusivity).
It says something about AbbVie's strength as a company that Humira falling off the patent cliff won't sink its business. AbbVie's two other immunology drugs, Skyrizi and Rinvoq, brought in more than $1.7 billion in the third quarter and their sales are growing by about 75% and 54% year over year, respectively. And they are only two drugs among others in the company's wide and deep commercial portfolio.
AbbVie's dividend raise kicks in with the payout scheduled for Feb. 15, 2023; it will be made to shareholders of record as of the preceding Jan. 13. At the stock's most recent closing price, the new amount would yield just over 4%.
Although Visa's dividend growth streak isn't as lengthy as AbbVie's and its yield is notably lower, Visa is still a reliable payer and lifter. True to form, at the end of October the company declared a 20% hike in the quarterly payout to $0.45 per share.
The payment card giant is also a top beneficiary of the world's long-tail shift from cash into plastic and digital commerce. Combine that with an asset-light model -- Visa doesn't provide any credit itself, rather, it acts as only the processor of payments made with its plastic -- and you've got a fine recipe for high-margin profitability and growth.
Visa's full-year fiscal 2022 results were typical for this financial sector powerhouse; net revenue zoomed 22% higher to hit an astonishing $29.3 billion. Not to be outdone, non-GAAP (adjusted) net income surged ahead at a bracing 24% clip to $16 billion.
The trend away from cash is far from over. And even if the global economy experiences some hiccups in the coming quarters, Visa should continue to rake it in -- if at a decelerated pace. On average, analysts tracking the stock are expecting nearly 10% growth on the top line this fiscal year and an 11% improvement in per-share earnings.
The company's recently raised dividend will be handed out on Dec. 1 to investors of record as of Nov. 11. The would give it a yield of 0.9% on the current share price.