AbbVie’s Dividend Survived Humira’s Patent Cliff. Will Merck and Amgen’s?

Every drugmaker eventually loses its biggest product to generics or biosimilars. For an income investor, the question is whether newer drugs bring in enough cash to cover the dividend before the old blockbuster’s sales fade. This group shows how much is at stake: Merck (NYSE:MRK | MRK Price Prediction) brought in $8.367 billion from its KEYTRUDA franchise in a single quarter. AbbVie (NYSE:ABBV) is already absorbing Humira biosimilars. Amgen (NASDAQ:AMGN) is losing sales on Prolia and XGEVA, and Gilead Sciences (NASDAQ:GILD) is maintaining its HIV franchise after its COVID drug faded. Below, we judge each dividend first on coverage, cash flow, and track record. Yield comes second.

AbbVie: Skyrizi and Rinvoq Are Already Paying for the Post-Humira Dividend

AbbVie yields 2.3%, and its quarterly dividend is now $1.73 per share, up from $1.64 in 2025. The payout has gone up every year since AbbVie became a standalone company. It started at $0.40 a quarter in 2013.

Dividend safety: Trailing GAAP EPS of $3.54 is below the $6.83 annual dividend because of deal-related charges. Adjusted EPS guidance of $13.87 to $14.07 better reflects how well the payout is covered. The free cash flow yield of 3.5381% is higher than the 2.3150% dividend yield, so cash flow covers the payout. Net debt runs at 2.26x EBITDA and interest coverage is 6.94x. Book equity is negative because of the Allergan deal. With the $10.9 billion Apogee Therapeutics acquisition pending, the CFO said AbbVie remains “committed to achieving a net leverage ratio of two times within two to three years following the deal close.”

Patent exposure: Humira sales came in at $756 million in Q2, down 35.9%. Over the same quarter, Skyrizi brought in $5.505 billion (up 24.4%) and Rinvoq $2.525 billion (up 24.5%). Management said Skyrizi’s “composition of matter patent expires in 2033” and its regulatory data protection “does not expire until 2031.”

Bull case: Revenue grew 10.2% to $16.99 billion, and management now expects $21.7 billion in Skyrizi revenue for the full year. The stock trades at a forward P/E of about 16. The drugs replacing Humira are already growing fast enough to fund dividend increases.

Risk: AbbVie now depends heavily on two drugs. One CNBC guest said the company is “still pretty levered to now two drugs or arguably three.”

Merck: A Trailing Payout Ratio That Overstates the Danger

Merck yields 2.24% on a quarterly dividend of $0.85, up from $0.81. The payout has gone up every year since late 2013, when it was $0.44. Merck has frozen its dividend before, though: it held at $0.38 from 2005 through 2010.

Dividend safety: At first glance, Merck’s coverage looks bad. Trailing EPS of $1.26 falls far short of the $3.32 annual dividend, and the trailing P/E is about 119. The forward P/E is about 15, though, and that gap suggests one-time charges are skewing the trailing figure. This year’s adjusted EPS guidance of $2.66 to $2.76 already includes one-time R&D charges of $3.62 per share for Cidara and $2.31 per share for Terns. The CFO was direct: “We remain committed to the dividend, intending to increase it over time.” Merck is also on pace for about $3 billion in buybacks this year.

Patent exposure: KEYTRUDA sales were $7.904 billion in Q2, down 1%, with a 2028 loss of exclusivity ahead. The new KEYTRUDA QLEX version added $463 million. The CEO described the coming loss of exclusivity as “more of a hill than a cliff.”

Bull case: WINREVAIR sales rose 75% to $588 million. LIPFENDRA was approved as the first once-daily oral PCSK9 inhibitor, and sac-TMT is in 17 Phase 3 studies. Management raised full-year sales guidance to $66.3 billion to $67.3 billion.

Risk: The CFO expects U.S. KEYTRUDA growth to “moderate as we increasingly reach peak penetration across several key indications.” That slowdown comes before exclusivity ends.

Amgen: A Raise Every Year Since 2011, Backed by Strong Cash Flow

Amgen yields 2.24%. Its quarterly dividend of $2.52 is a 6% increase from a year ago. Amgen has increased its dividend every year since its first dividend in 2011, when it paid $0.28 a quarter.

Dividend safety: The $9.80 annual dividend is covered by trailing EPS of $16.10 and by adjusted EPS guidance of $22.30 to $23.50. Q2 free cash flow jumped 82.6% to $3.489 billion. Buybacks for the year are capped at $3.0 billion, and the company bought back no shares in the first two quarters, which leaves more cash for the dividend and debt reduction.

Patent exposure: Prolia fell 32% to $759 million, and XGEVA fell 34% to $352 million. Enbrel slipped 4% under IRA price-setting pressure. Management called the Prolia and XGEVA decline “in line with our expectations given several biosimilar competitors have now launched.”

Bull case: Six key growth drivers rose 26% and now make up nearly 70% of product sales. Repatha grew 37%. Amgen also benefits from biosimilars itself: its biosimilar portfolio brought in $855 million in Q2. MariTide, its obesity drug, is in 10 Phase 3 studies, which gives Amgen a long-term growth option the other three lack.

Risk: Debt outstanding is $57.3 billion, the largest load in this group relative to Amgen’s size.

Gilead Sciences: HIV Growth Is Funding the Dividend as Veklury Fades

Gilead yields 2.06%, less than any of the other three, on a quarterly dividend of $0.82. The payout has gone up every year since 2015, when it was $0.43.

Dividend safety: Gilead reported a Q2 GAAP net loss of $10.496 billion, driven by acquired R&D write-offs. Free cash flow still came in at $3.432 billion. Excluding acquisition charges, non-GAAP EPS guidance of $8.50 to $8.85 easily covers the $3.22 annual dividend. According to the CFO, Gilead returned “approximately 49% of our free cash flow to shareholders in the first half of 2026” through dividends and buybacks combined.

Patent exposure: Veklury sales collapsed 81% to $23 million, and HIV competition is the main long-term threat. For now, HIV sales are still growing: up 12% to $5.693 billion. The CEO said the HIV portfolio is “durable well into the end of the next decade.”

Bull case: Yeztugo, Gilead’s long-acting HIV prevention shot, brought in $232 million, up from $15 million a year earlier. Descovy rose 48%. Two FDA decisions are coming up: anito-cel on December 23, 2026 and once-weekly oral lenacapavir for HIV prevention by February 2, 2027. The forward P/E is about 16.

Risk: Acquisitions have cut Gilead’s cash to $3.179 billion from $10.6 billion at year-end, leaving less room if a launch disappoints.

Ranking the Four Dividends on Patent-Cliff Readiness

AbbVie is furthest along: Skyrizi and Rinvoq are already replacing Humira’s lost sales and paying for dividend increases. Amgen has raised its dividend every year since 2011 and has strong free cash flow, so its debt load is the main thing to monitor. Merck’s commitment to the dividend is firm, and its trailing payout ratio looks worse than it is because of one-time charges. Gilead has the lowest yield, but its HIV growth gives the dividend the clearest path past Veklury’s collapse. None of these four trip the classic warning signs of a dividend about to be cut, but if you want the checklist we use to screen for those, we put all seven of them in a free dividend trap guide.

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