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The last earnings season of 2022 is already underway for investors. Companies frequently complete their fiscal year with a dividend increase, which has been pretty brisk recently. Businesses of all sizes and sectors are increasing their payouts.

AbbVie (ABBV -0.10%) and Visa (V -0.70%) are two of the top lifters in their respective industries. Let’s take a deeper look at these two firms’ recent dividend hikes and why they may be appealing to investors.

1. AbbVie 

Being the creator of the world’s best-selling medication has its perks. AbbVie is the parent firm of Humira, the blockbuster medicine for rheumatoid arthritis and a slew of other ailments, with sales exceeding $20 billion last year.

With a number like that generated from just one medicine, it’s no surprise AbbVie is generous with its payout; in fact, it’s one of the stock market’s few Dividend Kings, with a five-decade run. The corporation announced a 5% dividend boost to $1.48 per share in conjunction with the release of its most recent financial report.

There is one important caveat with Humira: it is losing its patent protection (no, the business did nothing wrong; medications authorized in most major nations, including the United States, are only guaranteed limited patent exclusivity).

It tells something about AbbVie’s resilience as a firm that Humira’s patent expiration will not sink its business. Skyrizi and Rinvoq, AbbVie’s other immunology medications, brought in more than $1.7 billion in the 3rd quarter, with sales increasing by around 75% and 54% year over year. And those are only two of the many medications in the company’s extensive commercial portfolio.

AbbVie’s dividend increase takes effect with the payout planned for Feb. 15, 2023; it will be given to stockholders of record as of Jan. 13. The additional sum would yield little more than 4% at the stock’s most current closing price.

2. Visa

Although Visa’s dividend growth streak isn’t as long as AbbVie’s, and its yield is far smaller, Visa is a consistent payer and lifter. True to form, the firm announced a 20% increase in quarterly distribution to $0.45 a share towards the end of October.

The payment card behemoth has also benefited greatly from the world’s long-tail trend away from cash and toward plastic and digital transactions. Combine it with an asset-light approach (Visa does not extend credit, but rather functions as a processor of payments made with its cards) and you’ve got a winning combination for high-margin profits and growth.

Visa’s full-year fiscal 2022 results were standard for this financial sector behemoth; net revenue increased by 22% to an astounding $29.3 billion.

The decline in the use of currency is far from over. Even if the global economy stumbles in the next months, Visa should continue to rake it in – although at a slower pace. Analysts following the stock anticipate about 10% revenue growth and an 11% increase in profits per share this fiscal year.

The newly increased dividend will be paid to shareholders of record on November 11 on December 1. On the current stock price, this would result in a 0.9% yield.

Author: Blake Ambrose

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