AbbVie (ABBV -1.01%) is the sixth-largest pharmaceutical company in the world. The company's total return on investment, more than 500% over the past decade, has made it a very profitable stock. However, much of the stock's success has been tied to its immunology blockbuster therapy Humira, which was responsible for 37% of the company's revenue this past year.

Humira just began facing biosimilar competition in the United States -- and the challenge will be significant considering the profits at stake -- but here are three reasons why investors should still look favorably on AbbVie stock.

First, let's see what's happening to Humira, which has been the biggest-selling drug therapy on the market for years (other than COVID-19 vaccines). It again led the non-vaccine pack this past year. The company reported Humira sales of $21.2 billion in 2022, up 2.6% over the prior year.

That number is expected to drop off sharply to $13.5 billion this year according to a Statista report, because of the impact of Humira biosimilars in the United States. Only one other Humira biosimilar has been launched, Amjevita from Amgen, which hit the market on Jan. 31. Other Humira biosimilars are on the way, but won't likely launch until July, according to data from Cardinal Health

It's worth noting that overseas, where the drug has faced biosimilar competition for four years, its annual international sales were down only 22% compared to 2021.

ABBV PE Ratio (Forward) Chart

ABBV PE Ratio (Forward) data by YCharts

1. AbbVie has plenty of prospects in its pipeline

Now, for the good news. Not counting Humira, the company had nine therapies with $1 billion or more in sales in 2022, and seven of those blockbusters saw increased revenue growth this past year. The most encouraging aspect of that is the company's immunology duo of Skyrizi and Rinvoq, which combined for $6.3 billion in sales and were up 80% and 41% over 2021 sales, respectively. By 2025, AbbVie said that duo will be responsible for more than $15 billion in sales.

In addition, AbbVie spent $6.4 billion on research and development last year. With 90 programs in its pipeline, including more than 50 in late-stage development, there's good reason to believe the company won't miss Humira's revenue for long. Three of the most promising therapies on the way are Epcoritamab, ABBV-951, and ABBV-916. 

Epcoritamab, which AbbVie is developing with Genmab, is expected to be the first bispecific antibody approved to treat diffuse large B-cell lymphoma (DLBCL). The drug's PDUFA action date with the Food and Drug Administration (FDA) is May 21. Epcoritamab did well in terms of efficacy in its phase 1/2 trial to treat relapsed or refractory DLBCL and could be worth as much as $900 million in annual sales by 2030, according to Delve Insights.

ABBV-951 is a solution of carbidopa and levodopa that is designed to treat motor fluctuations in patients with advanced Parkinson's disease. The company filed for its new drug application with the FDA last May. ABBV-916 is a monoclonal antibody that is being tested to see if it can remove amyloid plaques in early Alzheimer's patients. The company is in the process of recruiting for a phase 2 trial for the therapy.

2. The shares trade at an attractive valuation

AbbVie's shares are down a little more than 4% over the past year. Considering expected 2023 earnings, the stock is underpriced, trading at a little under 14 times forward earnings, below the S&P 500 average forward price-to-earnings ratio (P/E) of about 17 and below the P/E of many of AbbVie's competitors among large pharmaceutical companies.

The company is predicting lower sales and earnings this year, giving guidance of 2023 adjusted earnings per share (EPS) of between $10.70 to $11.10, compared to adjusted EPS of $13.77 in 2022. However, CEO Richard Gonzalez also said that he expects the company to return to revenue growth in 2025.

3. The dividend will pay you to be patient

Over the past five years, the company has boosted its dividend by 54%. And since AbbVie split off from Abbott in 2013, the payout has increased by 270%.

That dividend should help salve the wounds that any short-term stock fluctuations deliver to AbbVie investors. Plus, AbbVie is raising its dividend by 5% this year to $1.48 per share, giving it a yield of around 3.7%, more than double the S&P 500 dividend average yield of 1.7%.

Counting its time as part of Abbott Laboratories, the company is a Dividend King that has raised its dividend for 51 consecutive years. And its dividend payout ratio of 41% is easily sustainable considering the company's consistent cash flow.

AbbVie’s success isn’t a fluke

AbbVie will likely see a revenue decline, but to a great extent that expectation has already been priced into the stock’s price. The company got to where it is by making good decisions and by spending wisely on research and development -- and so at its current price, the stock is a solid long-term choice.