Jefferies Dividend Franchise Picks Stocks to Buy on Sale After Big Market Sell-Off

Investing

Published: January 11, 2016 8:25 am

Last Updated: January 13, 2020 3:12 pm

After the first week of trading for 2016, many investors are feeling pretty queasy as we head into earnings season with the big banks leading off this week. With the S&P 500 now trading at levels that the index hit back in October after the big 10% summer-early fall correction, it may be once again time to buy the dip.

One good idea for investors is to look at the very best ideas that Wall Street firms have to offer. In a new research note, Jefferies makes the case that earnings could give a lift to the sagging market, and with low expectations, the lift could be solid. We screened the firm’s Franchise Picks list for the highest yielding dividend stocks. We found four that make good sense for investors now.

AbbVie

This is one of the top global pharmaceutical stocks at Jefferies. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. Its mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases.

The stock fell 10% in late October after the FDA warning about liver risk with the company’s hepatitis C (HCV) products. However, Jefferies points out that the next generation HCV product could be launched as early as 2017, and even of the entire Viekira Pak/Technivie business were lost over the next two years, it represents only 4% of net percentage value.

AbbVie announced last week that the supplemental New Drug Application for Viekira Pak to be used without ribavirin has been accepted by the FDA with priority review. The company is looking to get the product’s label expanded for use without ribavirin, for the treatment of patients with genotype 1b chronic HCV and compensated cirrhosis (Child-Pugh A).

For the third quarter, AbbVie reported a profit of $1.24 billion, a significant increase from the $506 million it earned in the same quarter of 2014. The company’s sales increased by 8.40% year over year to $5.94 billion.

AbbVie investors receive an outstanding 4.1% dividend. The Jefferies price target for the stock is $85, among the highest on Wall Street. The Thomson/First Call consensus target is much lower at $73.80. Shares closed Friday at $55.65.