This Stock Just Raised It's Dividend 50%

Hello and welcome to Dividend Brief, the 2 times weekly newsletter focused on dividend investing.

Today, we will look into AbbVie, Cigna, and Salesforce, highlight a few dividend stocks worth watching, as well as share companies that are about to pay a dividend in the next few days.

Healthcare

AbbVie Faces Setback as Schizophrenia Drug Trials Miss Key Targets

AbbVie Inc. experienced a significant stock decline following disappointing results from its recent trials aimed at treating schizophrenia. The company's mid-stage studies of emraclidine, a drug targeting muscarinic receptors to address symptoms of schizophrenia, did not meet their primary objectives. This setback is particularly notable as it comes after AbbVie's large-scale acquisition of Cerevel Therapeutics earlier this year, a deal worth billions.

Following the news, AbbVie shares saw their largest drop in three years, underperforming after previously strong gains. In contrast, the outcome is seen as a boost for Bristol Myers Squibb, whose new schizophrenia treatment received regulatory approval earlier. This latest addition to the market marks the first significant update in schizophrenia medications in decades.

The treatments under development by AbbVie and Bristol focus on novel mechanisms, differing from traditional drugs that primarily target dopamine receptors. Despite advancements, finding effective solutions for schizophrenia remains challenging, especially due to the side effects associated with older medications. Moving forward, AbbVie plans to review the trial data to strategize its next steps. Meanwhile, investors have shifted focus toward Bristol Myers, which may gain momentum as a result of AbbVie's recent hurdles.

ABBV currently trades at $174 and pays a dividend of $1.64 per share, a yield of 3.77%.

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Healthcare

Cigna Ends Merger Talks with Humana, Focuses on Share Buybacks Instead

Cigna has decided not to pursue a merger with competitor Humana, following speculation about potential talks between the two major health insurers. Cigna affirmed its focus on mergers and acquisitions that meet its strategic and financial goals, emphasizing that it would only consider deals with a strong likelihood of success.

The speculation of a possible deal resurfaced amid concerns about rising Medicare costs, which have impacted Humana’s financial health. However, Cigna remains concentrated on its current business strategy, including a substantial share repurchase plan, with $6 billion in buybacks completed this year and more expected in the fourth quarter.

Market reaction to the news was mixed. Cigna's shares saw a significant boost, while Humana’s stock faced a decline. Analysts pointed out that regulatory hurdles from bodies like the Federal Trade Commission and the Department of Justice could complicate any potential merger, particularly due to concerns about market dominance in pharmacy benefits.

Cigna’s commitment to its own growth path, alongside continued share buybacks, signals a strategic focus on strengthening its existing business lines rather than pursuing risky acquisitions that might face regulatory challenges. The company remains cautious in its M&A activities, focusing on opportunities aligned with its broader market strategy.

CI currently trades at $343 and pays a dividend of $1.40 per share, a yield of 1.63%.

Tech

Salesforce Ramps Up Hiring for New AI Agent Platform

Salesforce is gearing up for an extensive hiring push, with plans to bring on more than 1,000 employees to support its latest AI product. The move comes as the company aims to capitalize on the positive momentum surrounding its new AI-powered tool, Agentforce. Launched recently, this software assists with customer service and sales tasks, operating autonomously without needing human intervention. Salesforce has shifted its focus this year to prioritize these generative AI agents, which are already receiving strong feedback from clients.

Over recent years, Salesforce has streamlined operations, including workforce reductions and promoting more cost-efficient customer services. Despite these measures, the company is now investing heavily in expanding its AI capabilities, anticipating robust demand. This strategic pivot follows increased competition from tech giants like Microsoft and ServiceNow, who are also advancing in the AI agent space.

The announcement of new hires and expanded product offerings positively impacted Salesforce’s stock performance, pushing it to new highs. As the company continues to invest in its AI-driven solutions, it aims to solidify its leadership in customer relationship management and enterprise AI software, differentiating itself from other industry players.

CRM currently trades at $344 and pays a dividend of 40 cents per share, a yield of 0.47%.

AI

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Its technology has proven traction, positioning the company for continued disruption in the marketing industry.

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CHDN upped its dividend payout to 41 cents per share, an increase of 7%. The company’s new forward yield is 0.29%

MAN grew its dividend payout to $1.54 per share, an increase of 52%. The new forward yield of MAN is 9.6%

ROP increased its dividend payout to 82.5 cents per share, an increase of 10%. Its new forward yield is 0.6%

BORR decreased its dividend payout to 2 cents per share, a cut of 80%. Its new forward yield is 2.0%

CRH lowered its dividend payout to 26 cents per share, a cut of 25%. The new forward yield of CRH is 1.4%

VINP shrunk its dividend payout to 16 cents per share, a cut of 6%. The company’s new forward yield is 6.12%%