AbbVie’s Humira Cash Cow Is Shrinking—Can Its Dividend Keep Growing?

AbbVie (NYSE:ABBV | ABBV Price Prediction) investors just banked another $1.73 per share, the third payment at that level after the board pushed the quarterly rate up 5.5% from the prior $1.64. The check landed on August 14, 2026, and it arrived against a backdrop most dividend investors have been dreading for years: the Humira patent cliff has arrived and is showing up in the income statement every quarter.

Yet the payout keeps climbing. That tension, an eroding legacy franchise funding a rising distribution, is what a scorecard needs to grade.

The Payout Math: A B+ Coverage Story

AbbVie generated $19.03 billion in operating cash flow in fiscal 2025 against $1.21 billion in capex, leaving roughly $17.8 billion in free cash flow. The dividend cost the company $11.66 billion over the same period, up from $11.03 billion in 2024 and $10.54 billion in 2023. That works out to a free-cash-flow payout ratio in the mid 60s, which is why the stock still carries a 3.88% free cash flow yield even after the recent run.

Trailing net income of $4.23 billion in 2025 sits well below the cash dividend, which is why the reported P/E of 108 and earnings yield of 0.92% flash red on a screener. Amortization of acquired intangibles from the Allergan deal, plus IPR&D charges, is doing most of that damage. On an adjusted basis, management guided full-year 2026 EPS to $13.87 to $14.07, which comfortably covers the roughly $6.92 in annualized dividends.

The Growth Streak: An A Grade Nobody Disputes

AbbVie inherited Abbott’s aristocrat streak at the 2013 spinoff, and the combined record now runs past 50 consecutive years, the kind of pedigree we screened for in a free Dividend Kings report. The quarterly payout has moved from $0.40 in 2013 to $1.73 today, a run that includes double-digit raises through the Humira peak years and mid-single-digit increases through the biosimilar transition. The latest 5.5% bump tells you management is signaling confidence, but also pacing itself.

The Patent Cliff: Where the C Grade Lives

Humira is ultimately the reason for this scorecard’s asterisk. Global sales fell to $756 million in the second quarter of 2026, an operational decline of 36.1%. That comes on top of a roughly 49.5% drop in fiscal 2025. Imbruvica added insult, falling 29.4% under IRA pricing and share pressure.

Separately, Skyrizi delivered $5.5 billion in Q2 sales at 24% growth, Rinvoq crossed $2.5 billion at 23.7%, and neuroscience revenue topped $3.2 billion. Total revenue reached nearly $17 billion at 10.2% reported growth, and management raised full-year revenue guidance to approximately $67.6 billion.

Here’s the catch: Skyrizi’s own composition-of-matter patent expires in 2033. CEO Rob Michael pointed to later-expiring IP in the mid-2030s and later and said the company does “not expect to see biosimilar application filings until the end of this decade.” Investors are being asked to trust that history does not repeat.

Leverage and the Apogee Question

AbbVie carries negative shareholders’ equity, a legacy of the Allergan acquisition, and 2025 interest expense hit $2.89 billion. The pending $10.9 billion Apogee Therapeutics acquisition will add roughly $200 million in annual net interest expense and a 14-cent dilutive hit to 2026 adjusted EPS. Management committed to a net leverage target of two times within two to three years after close.

Final Grade: B

At $261.72 and a 2.54% yield, ABBV has already delivered a 27.32% total-return year and 181.91% over five years, so the market is grading the transition kindly. The dividend earns a solid B: cash coverage is intact, the growth streak is genuine, and Skyrizi plus Rinvoq are pulling their weight. Points come off for the leverage profile, the mid-single-digit raise pace, and the fact that this same story will need to be told again in a decade when Skyrizi’s own exclusivity fades. Investors buying today are paying a fair price for a payout that works, provided the pipeline keeps delivering.

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