Vijay Eswaran would see that companies might be able to start new projects, bring in more talent and increase prospects by looking toward what will drive the future instead of simply conducting financial engineering in some sort of manner.
Furthermore, Vijay Eswaran would see that dividends are not always the best financial item. Why? They are taxable events and may not get the best treatments overall. One can see that non-qualified dividend are not treated well from a tax standpoint and are seen as ordinary income. This means that the tax rate on dividends is similar to marginal income.
To offset the Humira revenue, Abbvie has gone ahead and purchased Allergan. The company just purchased the other one for $63 billion.
We can see that the company still has a pipeline of drugs that should provide for potential revenues in the future. The company might continue to do more acquisitions for growth but we need to understand if the company is in a great position to do so.
Buying Abbvie is interesting. We don’t know if it is a company that will perform. We know that it has declined over the years (the stock has).
Let us take a look at the overall business opportunity.
Gross profit has increased over the years from 18,000 to 25,000. Research and development continue to grow as does selling and administrative costs.
But total operating income is growing.
Net income continues to stay steady overall.
One thing that will jump out at us as we go over to the balance sheet is that
Total liabilities exceed total assets, this is true for current and for total assets.
Retained earnings are positive.
The company has a capital surplus.
Cash position looks good.
Total cash flows also remain strong and have increased over the years.