The article argues that rising interest rates could make the high dividend yields of pharmaceutical stocks such as Pfizer and AbbVie less appealing, since the 10-year U.S. Treasury yield serves as the benchmark for comparing income investments. The Federal Reserve raised rates by 25 basis points last month after a series of cuts in 2024 and 2025, and numerous economists expect further hikes. Pfizer, with a 5.7% dividend yield, has several top products approaching patent expiration and is in a slow reset phase, while AbbVie's 2.4% yield is supported by growth from Skyrizi and Rinvoq. The author expects rising rates to pressure Pfizer's stock more than AbbVie's, though he remains bullish on both companies.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on fool.com ↗
Keywords
dividendsinterest ratespharmaceuticalsFed
Open a keyword to see other news on the same topic.
Related tickers and likely impact
DXY
▲ Likely positiveRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/22/2026 | 101.62 |
| Change that session | -0.07% |
XAU/USD
▼ Likely negativeRelevance: low
| Market | Gold |
|---|---|
| Close on 10/22/2026 | 4,024.59 |
| Change that session | -2.82% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Forget High - Yield Traps : AbbVie Is the Dividend King to Buy and Hold Through Any Rate Cycle
The article argues AbbVie is not a high-yield trap, because its free cash flow is sufficient to cover its quarterly dividend of $1.73 per share, and most of its $70.8 billion debt is in fixed-rate notes. AbbVie has raised its dividend for 54 consecutive years, qualifying it as a Dividend King, a group of stocks that have raised dividends for at least 50 years. Skyrizi and Rinvoq together brought in over $7.5 billion in the second quarter of 2026, more than the $6.1 billion paid in dividends that quarter, and the company has about 90 programs in development, around 60 of them in mid- or late-stage studies. The dividend yield of 2.5% is lower than before because the share price has risen faster than dividends, and the article notes that pipeline setbacks remain a risk.
- Forget High-Yield Traps: AbbVie Is the Dividend King to Buy and Hold Through Any Rate Cycle
The article contrasts AbbVie with high-yield traps, arguing its free cash flow covers its quarterly dividend of $1.73 per share and that most of its $70.8 billion in debt is fixed-rate senior notes. AbbVie has raised its dividend for 54 consecutive years, qualifying it as a Dividend King, and Skyrizi and Rinvoq together brought in over $7.5 billion in the second quarter of 2026, more than the $6.1 billion paid in dividends that quarter. The company has roughly 90 programs in clinical development, around 60 in mid- or late-stage studies. Its 2.5% yield is lower than before because the share price has risen faster than dividends. The author notes that pipeline setbacks remain a risk.
- Treasury Yields Are Near 5 %. Should Retirees Rethink Dividend Stocks ?
This article compares short-duration bond funds with dividend stocks for retirees after the Federal Reserve raised the upper bound of its target range from 3.75% to 4.00% on September 17, 2026. On October 20, 2026, Treasury par yields were 4.51% at one year, 4.79% at two years and 4.86% at three years. Bond fund yields float as holdings mature and are reinvested, the fund never matures, its share price can fall, and FDIC insurance does not cover bond funds. On the stock side, Johnson & Johnson and Procter & Gamble have raised dividends for 64 and 70 consecutive years, Realty Income yields about 5% with 115 consecutive quarterly increases, and PepsiCo cut its EPS growth outlook.
- Kevin Warsh's Fed May Not Cut Rates Soon. That's Why This Dividend Stock Belongs in Your Portfolio.
The next FOMC meeting is on Oct. 28; according to CME Group's FedWatch tool, the Fed probably won't hike that day, but as of Oct. 17 the odds of a hike at the December meeting were 89%. The article argues that a prolonged rate-hike cycle may not occur, while longer-term bond yields have risen in recent months. It presents AbbVie (ABBV) as a dividend stock to consider, citing 18.8% annualized returns over 10 years, a history of raising its dividend for more than 50 years, $6.92 in dividends paid in 2026 ($1.73 per quarter), and a 2.42% forward yield. It also says AbbVie's $70.8 billion of debt is only 14% of its $504 billion market cap and mostly fixed-rate, and that pharmaceuticals are less sensitive to rates and unconnected to the AI trade.
- Great News for AbbVie Stock Investors
AbbVie (ABBV) shares have climbed 26% this year on strong financial performance, and the author sees a bright medium-term outlook. Skyrizi, the company's biggest growth driver, generated almost $10 billion in sales in the first half, up 27%, but its U.S. patents may begin expiring by 2033, potentially opening the door to cheaper biosimilars. On Oct. 19, AbbVie reported encouraging Phase 2a results for ABBV-466, which combines risankizumab and trosunilimab, though these must still be confirmed in Phase 3 studies. Its $10.9 billion cash acquisition of Apogee Therapeutics brought zumilokibart, which AbbVie hopes can challenge Dupixent (over $15 billion in annual sales), with maintenance injections possibly only every three or six months. Rinvoq should not face U.S. generics until 2037, and the author says AbbVie can deliver competitive long-term returns, with a forward yield of 2.5% versus the S&P 500's average of 1.1%.
- 3 Reasons Royalty Pharma Is a Dividend Stock You Never Have to Sell
The article argues that Royalty Pharma suits buy-and-hold income investors for three reasons: healthcare spending tends to stay resilient through economic cycles, the company's experts select which drugs to back, and its portfolio is diversified. Royalty Pharma pays drug companies cash up front in exchange for future royalties on approved and in-development drugs, and that cash funds its shareholder distributions. Its yield is around 1.5%, slightly above the pharmaceutical sector average of roughly 1.4%. The portfolio includes 35 approved products and 16 in development, with 16 generating more than $1 billion in annual revenue and an average remaining royalty duration of around 13 years. The article acknowledges that some of its drug investments will not work out as planned.
Related markets
Latest news
- Interpol Recovers $105M in African Cybercrime Sweep That Shut Illegal Crypto Mines
Interpol said police from 21 countries arrested 1,462 suspects and recovered more than $105 million in Operation Serengeti III, a cybercrime crackdown in Africa that ran from June 29 to August 31, 2026, targeting ransomware, online scams and business email compromise. The operation disrupted 10,909 malicious networks and identified 65,929 victims, with linked losses of more than $385 million. In Angola, investigators shut two illegal crypto mining centers, arresting nine people and seizing more than 2,000 mining devices and six illegal power transformation stations. In Nigeria, more than $2.4 million in suspected investment fraud proceeds was traced, much of it laundered through crypto transactions. Several investigations remain active.
- Moderna Sinks 4% After 18% Plunge as Melanoma Vaccine Selloff Extends; Merck and Pfizer Slip
Moderna shares fell 4% to $193.62 in morning trading, extending an 18% plunge from the prior session, even though full late-stage data for its personalized melanoma vaccine, given with Merck's Keytruda, came back positive. Compared with Keytruda alone, the combination cut the risk of melanoma recurrence or death, a result near analyst expectations but short of the highest hopes built during a rally that began in August. The vaccine carries far more weight for Moderna, whose approved products are all respiratory vaccines, while for Merck it is an add-on to Keytruda; Merck fell 0.8% to $146 and Pfizer 0.7% to $30.22. The iShares Biotechnology ETF was unchanged at $209.54, suggesting the slide is company-specific. The full data will be presented at a medical conference this weekend.
- OpenAI aiming for new $30 billion funding round at a $1.25 trillion valuation
OpenAI is looking to raise a new $30 billion funding round at a $1.25 trillion valuation, according to Bloomberg, after previously seeking capital at a $1.5 trillion valuation. The company raised $122 billion in March, when it was valued at $852 billion. Rival Anthropic is preparing to file its IPO ahead of the Thanksgiving holiday, with Wall Street anticipating a valuation of as high as $2 trillion, and could publicly reveal its S-1 at any time in the coming days. The talks come amid broad declines in AI stocks over concerns about data center buildouts, with neoclouds such as CoreWeave (CRWV) at the center over their heavy debt loads. The Philadelphia Semiconductor Index is down 7% over the past 5 days, and Meta fell as much as 7% on Thursday after raising the low end of its capital expenditure guidance.
- Bloom Energy Sinks 4% as Negative Cash Flow Overshadows Third Guidance Raise; FuelCell and Plug Power Hold Steady
Bloom Energy reported record Q3 2026 sales of $1.24 billion, above the $1.07 billion consensus, and raised its full-year outlook for the third time this year. However, operating cash flow swung to negative $27.1 million as inventory, contract assets and receivables climbed, and $153.5 million in capacity spending at Fremont and Newark pushed free cash flow to a use of $181 million. Shares fell 4% to $208.74 in morning trading, though still up 140% year to date, while FuelCell Energy and Plug Power were little changed. Management said the cash use is "not the beginning of a trend", ended the period with $2.5 billion in cash, and forecasts full-year revenue of $4.4 billion to $4.6 billion. Bloom's Q4 2026 report will show whether collections catch up with deliveries.
- Apple releases $2,000 iPhone Duo – but customers struggle to actually buy one
Apple began selling the $2,000 folding iPhone Duo, but stock sold out immediately and customers were told to wait until next year for delivery, with pre-orders capped at two handsets per customer. Many people queued overnight at Apple stores from Sydney and Shanghai to London and New York, although sales were rationed. One Sydney buyer paid A$3,899 ($2,734) for a 512GB model, while a Hong Kong buyer bought one to resell for a profit of around HK$4,000. Reviewers praised the hinge design but said the Duo lacks a telephoto lens, that third-party apps still need to be reworked for the new display, and that it is less handy for everyday tasks. The launch is also an early challenge for new CEO John Ternus, who took charge in September.
- Great News for Boeing Investors
The U.S. Federal Aviation Administration (FAA) has certified Boeing's 737 MAX 10, a step the article says reduces risk and should improve earnings, cash flow and competitiveness against Airbus' A321neo. Management had repeatedly said it expected certification in 2027, but a history of groundings, delays and FAA production caps had left investors apprehensive. Once the already-built MAX 10s are delivered, Boeing will book revenue and cash that is currently tied up in undelivered aircraft; about 30% of its 737 backlog is MAX 10s, and larger aircraft typically carry higher margins. The MAX 10 has a range of 3,100 nautical miles and a maximum capacity of 230 passengers, below the A321neo's 3,400 to 4,700 nautical miles and 244 passengers, but it lets airlines add short-haul capacity without switching to Airbus planes.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.