Dividend growth investing revolves around selecting only the most reliable businesses for your portfolio. This can be measured by consecutive years of dividend growth.

With 51 consecutive years of dividend growth to its credit (including time spent as part of Abbott Laboratories), AbbVie (ABBV 0.52%) certainly has such a record. In fact, it qualifies as a Dividend King.

Let's assess why the company continues to be an excellent pick for dividend growth investors now. 

1. Humira woes won't hold AbbVie down long

The investment world has known for years that AbbVie's mega-hit immunology drug Humira would eventually face its day of reckoning. After years of waiting, that day finally arrived when the company reported its results last month for the first quarter ended March 31.

AbbVie's net revenue dipped by 9.7% year over year to $12.2 billion in Q1. But this net revenue decline includes the foreign currency translation headwinds that the company faced during the period. Factoring out the 1.4% ding to net revenue from AbbVie's global operations at a time when the U.S. dollar has been very strong, operational revenue was down 8.3% over the year-ago period.

The recent launch of Amgen's Humira biosimilar Amjevita in the U.S., along with continued competition in international markets, weighed on results. This led the medicine's net revenue to plunge 25.2% year over year to $3.5 billion in the first quarter.

Double-digit revenue growth from immunology drugs Skyrizi and Rinvoq and anti-psychotic medicine Vraylar combined to produce net sales of $2.6 billion. Still, that wasn't enough to offset Humira's sharp decrease in net revenue.

But on the positive side, AbbVie projects that Skyrizi and Rinvoq will exceed $21 billion in combined revenue by 2027. Along with a deep pipeline, this is how the company anticipates it can return to growth in 2024 and continue expanding at a high-single-digit pace through the rest of the decade.

AbbVie's non-GAAP (adjusted) diluted earnings per share (EPS) fell 22.2% over the year-ago period to $2.46 during the quarter. Lower net revenue and higher operating expenses resulted in a 580-basis-point drop in non-GAAP net margin to 35.9% for the quarter. This explains how the company's adjusted diluted EPS contracted at a faster rate than net revenue in the quarter. 

A doctor and patient talking during an appointment.

Image source: Getty Images.

2. The market-topping payout is sustainable

Income investors will be pleased to learn that AbbVie's 3.9% dividend yield is more than twice the S&P 500 index's 1.7% yield. Most importantly, the company's dividend seems to be viable moving forward.

AbbVie's dividend payout ratio is expected to come in at around 54% in 2023. This is on the high side compared to recent years. But that's to be expected when taking into consideration that 2023 is slated to be a trough year in terms of profits due to Humira's U.S. loss of exclusivity cliff. This is why, as the years progress, I believe the dividend will become more secure.

3. A sensible valuation

AbbVie appears to be a reasonable buy for income investors. The stock's forward price-to-earnings (P/E) ratio of 13.9 is only slightly more than the drug manufacturer industry average of 13.4. Considering that AbbVie joins Johnson & Johnson as the only other pharmaceutical-focused Dividend King, the stock is arguably deserving of this premium valuation. This is especially the case when factoring in that AbbVie's fundamentals appear to be intact for the foreseeable future.