Smart Dividend Portfolio: Income Drip

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Dear Investor,

Welcome to this edition of TipRanks’ Smart Dividend Portfolio & Newsletter.

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Market-Moving News: Apr 20, 2026

Last week, stocks rose across the board as risk appetite eased and oil prices fell. The Dow Jones (DJIA) rose 1.79% to 49,447, while the S&P 500 (SPX) gained 1.20% to 7,126. The Nasdaq (NDX) also added 1.29%, closing at 26,672. At the same time, the U.S. 10-year yield moved up to 4.25%.

This setup shows a firm market, with lower energy costs helping risk assets. Oil (CM:CL) fell 1.7% to $83, while gold (CM:XAUUSD) held near highs at $4,866. Bitcoin (BTC-USD) traded near $77,000, as the risk mood stayed strong.

Looking ahead, oil will stay the main focus. Depending on the fate of the Strait of Hormuz, energy risks could return fast.

At the same time, bond yields will remain key. A move higher could weigh on tech and growth stocks.

In addition, AI will stay a core theme. New tools and rising spend continue to shape the sector and drive moves for tech shares.

Finally, macro risk is still in play. The IMF warned that U.S. debt could pass 125% of GDP, while global debt may reach 99% by 2028. It also noted that AI could help offset this by boosting growth and tax income.

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This Week’s Quality Dividend Stock Idea

AbbVie (ABBV) is a research-based biopharmaceutical company that develops and markets medicines across immunology, oncology, neuroscience, and aesthetics. Its portfolio includes therapies for chronic autoimmune diseases, cancer treatments, and medical aesthetics products, serving patients and healthcare providers worldwide. The company’s operations are supported by a combination of proprietary research, strategic acquisitions, and global commercialization capabilities, enabling it to deliver innovative therapies while maintaining a diversified and largely patent-driven revenue base.

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Pipeline Playbook

AbbVie traces its origins to Abbott Laboratories, which built a diversified pharmaceuticals business with a strong presence in immunology and specialty therapeutics. In 2013, Abbott separated its research-based pharmaceutical operations into AbbVie, creating an independent company focused on innovative drug development.

At the time, AbbVie’s growth was heavily anchored by its blockbuster immunology therapy Humira. The company used the strong cash flows from this franchise to fund research and pursue acquisitions aimed at diversifying its revenue base. This strategy took a major step forward in 2015 with the acquisition of Pharmacyclics, which added the blood cancer drug Imbruvica and established the company’s presence in hematologic oncology.

A transformative shift came in 2020 with the acquisition of Allergan. This deal expanded AbbVie beyond traditional pharmaceuticals by adding leading aesthetics brands such as Botox and Juvederm, along with neuroscience and eye care assets. The transaction reduced reliance on Humira and introduced new, durable growth platforms.

In parallel, AbbVie invested in next-generation immunology therapies, including Skyrizi and Rinvoq, which have become key growth drivers as biosimilar competition for Humira intensified.

More recently, the company has accelerated its focus on high-growth therapeutic areas through targeted acquisitions. In 2022, AbbVie acquired Syndesi Therapeutics, gaining early-stage neuroscience assets targeting synaptic function. This was followed by a series of deals in 2024 that further strengthened its pipeline. The acquisition of ImmunoGen added Elahere and expanded the company’s capabilities in antibody-drug conjugates, a fast-growing oncology segment. In the same year, AbbVie acquired Cerevel Therapeutics, significantly enhancing its neuroscience portfolio, particularly in disorders such as schizophrenia.

AbbVie also completed smaller, innovation-focused transactions, including the acquisition of Aliada Therapeutics, gaining access to an experimental Alzheimer’s therapy. These deals reflect a broader strategy of supplementing internal research with external innovation to drive long-term growth.

AbbVie’s evolution has been defined by a combination of blockbuster drug leadership, transformative acquisitions, and steady pipeline expansion, enabling it to build a diversified portfolio across immunology, oncology, neuroscience, and aesthetics while sustaining earnings growth.

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Revenue Rx

AbbVie operates a research-driven biopharmaceutical business model centered on discovering, developing, and commercializing branded therapies across immunology, oncology, neuroscience, and aesthetics. The company generates revenue primarily through global sales of patented medicines and medical aesthetic products, with pricing power supported by clinical efficacy, regulatory approvals, and intellectual property protections.

More than 50% of AbbVie’s revenue is derived from its immunology portfolio, which includes therapies for chronic autoimmune conditions such as rheumatoid arthritis, psoriasis, and inflammatory bowel disease. These treatments are typically prescribed for long durations, creating a recurring revenue base supported by strong patient adherence and physician familiarity. As newer therapies such as Skyrizi and Rinvoq gain adoption, they are replacing older products and extending the lifecycle of the company’s immunology franchise.

Beyond immunology, AbbVie has built diversified growth engines across oncology, neuroscience, and aesthetics. Its oncology portfolio includes targeted therapies for blood cancers and solid tumors, while its neuroscience segment focuses on conditions such as migraine, Parkinson’s disease, and psychiatric disorders. The aesthetics business, anchored by globally recognized brands like Botox and Juvederm, provides a cash-generative revenue stream that is less exposed to patent cycles and adds stability to overall earnings.

The company’s model is supported by substantial investment in research and development, enabling a continuous pipeline of new therapies and label expansions. This internal innovation is complemented by targeted acquisitions, which provide access to late-stage assets and emerging technologies, accelerating time to market and reducing development risk.

AbbVie also benefits from global scale in manufacturing, regulatory expertise, and commercialization, allowing it to efficiently launch and distribute products across major markets. As new therapies gain approval and existing products expand into additional indications, the company has demonstrated an ability to drive volume growth, extend product lifecycles, and improve operating leverage.

The company’s combination of high-margin branded drugs, recurring treatment demand, diversified therapeutic platforms, and ongoing pipeline replenishment supports sustained revenue growth and strong free cash flow generation.

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Growth Molecules

The pipeline remains central to long-term growth. In immunology, Rinvoq is being expanded into additional conditions such as skin pigmentation disorders, hair loss, and certain inflammatory skin diseases, while Skyrizi continues to grow in gastrointestinal conditions like Crohn’s disease with a more convenient, at-home injection option. Alongside these expansions, AbbVie is investing in next-generation approaches, including CD19 CAR-T therapies, where a patient’s own immune cells are engineered to attack disease, and antibody-drug conjugates (ADCs), which are designed to deliver treatments more precisely to affected cells, improving outcomes and extending the longevity of its immunology franchise.

In oncology, AbbVie is advancing a pipeline of targeted therapies across multiple tumor types. This includes early-stage assets such as Temab-A and Etentamig, as well as broader platforms like bispecific antibodies, which can bind to two different targets simultaneously, and ADCs such as ABBV-969. These approaches are aimed at enhancing precision in cancer treatment, potentially increasing effectiveness while reducing side effects.

AbbVie is also building future growth platforms. In obesity, AbbVie is developing an early-stage drug, ABBV-295, which has shown promising initial results, helping patients lose around 10% more weight than those on a placebo over a 12-week period. The treatment works by targeting hormones that help regulate appetite and metabolism, which may allow for less frequent dosing compared to existing therapies. The drug is still in its early testing, with mid-stage (Phase 2) clinical trials expected to begin in late 2026.

This pipeline expansion is supported by elevated investment levels. AbbVie increased R&D spending by approximately $1 billion year-over-year, funding around 90 clinical programs. Business development activity has also remained strong, with more than $5 billion deployed in 2025 and over $8 billion invested across the past two years. In total, the company has completed more than 30 transactions during this period, focusing on targeted capabilities such as CAR-T platforms, bispecific antibodies, and RNA-based technologies. Management remains disciplined, emphasizing that acquisitions are not urgent given the strong growth trajectory of existing assets, particularly with Rinvoq’s patent protection extending to 2037.

The company also signed a three-year agreement with the U.S. government, committing $100 billion to domestic R&D and capital investment over the next decade in exchange for relief from certain pricing and policy risks. This agreement helps reduce regulatory uncertainty, one of the key overhangs for the pharmaceutical sector, while providing greater visibility into long-term pricing stability. At the same time, the increased investment in U.S.-based innovation and manufacturing could support future growth, strengthen the company’s competitive position, and improve supply chain resilience

Operationally, demand remains strong across key products. Skyrizi continues to maintain high frontline use in IBD, while Botox Therapeutic faces Medicare price negotiation starting in 2028, an impact already reflected in forecasts and not expected to affect Botox Cosmetic.

Importantly, management believes current expectations may still understate the company’s long-term growth potential. Skyrizi and Rinvoq continue to expand, with combined revenue expected to exceed $31 billion in 2026, already ahead of prior expectations, and projected to grow more than 20% even at scale. Additional upside is expected from newer growth drivers, including Parkinson’s and migraine franchises, each projected to exceed $5 billion in peak sales in 2026, alongside continued contributions from oncology and psychiatry pipelines. While pricing pressure is expected to remain in the low single digits, growth is primarily driven by increasing patient volumes and broader adoption across indications.

AbbVie continues to invest heavily to sustain this growth, with R&D spending expected to reach approximately $9.7 billion, supporting around 90 clinical programs, alongside continued business development activity. The company targets high-single-digit revenue growth through 2029, supported by a diversified portfolio and the absence of major patent expirations until the next decade, providing significant capacity for continued investment and expansion.

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Profit Rebuild

Over the past five years, AbbVie has delivered steady top-line growth, with revenues rising at a CAGR of about 6%, even as EPS declined by roughly 3.8%. This divergence reflects a period of strategic transition rather than weakening fundamentals. Growth was initially driven by the Allergan acquisition and later by a successful shift away from Humira toward newer immunology drugs, Skyrizi and Rinvoq, which more than offset Humira’s sharp decline following its loss of exclusivity. Meanwhile, EPS was pressured by acquisition-related non-cash charges, elevated R&D and pipeline investments, and the temporary earnings impact of this transition.

Despite these headwinds, AbbVie delivered a strong performance in 2025, exceeding expectations. Adjusted EPS reached $10.00, surpassing initial guidance, while total revenue rose to $61.2 billion, beating forecasts by more than $2 billion. This was achieved even as the company absorbed approximately $16 billion in cumulative U.S. Humira erosion. Excluding Humira and Imbruvica, the underlying business grew 8.5% operationally, reaching a new all-time high and surpassing its prior peak by more than $3 billion, supported by strong double-digit growth from its newer portfolio.

Momentum remained solid in the fourth quarter, with revenues of $16.6 billion, up 9.5% operationally year-over-year, exceeding estimates. Adjusted EPS was $2.71 ahead of estimates, exceeding the midpoint by $0.08, despite a $0.71 drag from acquired in-process R&D (IPR&D). Profitability remained strong, with an adjusted gross margin of 83.6% and an adjusted operating margin of 38.3%, the latter impacted by IPR&D expenses. Importantly, the ex-Humira platform continued to expand at a robust 14.5% rate.

Financially, AbbVie maintains flexibility, with net debt around 2× EBITDA and strong cash flow supporting continued investment.

The company’s immunology franchise remains its primary growth engine, successfully offsetting Humira’s decline. In Q4, the segment generated approximately $8.63 billion in revenue, while FY25 Skyrizi and Rinvoq sales reached about $25.9 billion, up more than $8 billion year-over-year. Skyrizi grew 31.9% operationally, with strong positioning across psoriasis, psoriatic arthritis, and inflammatory bowel disease (IBD), where it captures roughly 60% of new patient starts and about 75% of frontline use. Rinvoq grew 28.6%, benefiting from expanded use in rheumatoid arthritis and IBD, including a label update enabling earlier treatment. Together, the two drugs now exceed Humira’s peak revenue by over $4.5 billion, while Humira declined 26.1% to $1.2 billion in Q4.

Beyond immunology, other segments are contributing meaningfully to diversification. Neuroscience generated over $10.7 billion in FY25 revenue, up $1.8 billion year over year, with Q4 growth of 17.3%. This growth was supported by strong growth in key products like Vraylar and Botox Therapeutic and an expanding migraine franchise, all of which delivered double-digit gains.

In oncology, Q4 revenue was about $1.7 billion, down 2.5%, reflecting a 20.8% decline in the sales of a key older drug, Imbruvica increasing competition, and pricing pressure. However, Venclexta grew 6.4%, and newer therapies delivered double-digit growth, supporting a transition toward newer assets with longer growth runways.

Aesthetics revenue was approximately $1.3 billion in Q4, down 1.2% due to macro pressure, particularly in fillers. Botox Cosmetic grew 3.8%, supported by strong brand strength and repeat usage. AbbVie continues to invest in marketing and provider training to support the adoption of its products. TrenibotE, a short-duration toxin expected in 2026, is designed to broaden the patient base, with incremental growth impact likely from 2027 onward.

Looking ahead, AbbVie expects another year of strong growth in 2026. The company expects total revenues of approximately $67 billion, representing 9.5% operational growth. Adjusted EPS is projected at $14.47 at midpoint, excluding future IPR&D expenses. Profitability is expected to improve significantly, with adjusted operating margins of about 48.5% and gross margins above 84%. R&D spending is guided to approximately $9.7 billion, while SG&A is expected to be around $14.2 billion. Free cash flow is projected at approximately $18.5 billion, including about $3.5 billion in royalties from Skyrizi.

By segment, immunology is expected to generate $34.5 billion in 2026 revenue, driven by Skyrizi at $21.5 billion and Rinvoq at $10.1 billion, while Humira contributes $2.9 billion. Neuroscience is projected to reach $12.5 billion, oncology $6.5 billion, and aesthetics $5 billion, despite ongoing macroeconomic headwinds.

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Dividend Dose

AbbVie has built a consistent track record as an income-generating stock, having paid dividends since its 2013 spin-off and increased them annually for the past 13 years. Over the last decade, its dividend has grown at an annual rate of about 12.4%, supported by a payout ratio of roughly 67% of adjusted earnings. In its most recent quarter, AbbVie declared a dividend of $1.73 per share, offering a yield of 2.87%, notably higher than the broader healthcare sector average of around 1.6%. The company has increased its dividends by more than 330% over the years.

Alongside dividends, share repurchases remain a secondary capital return tool. In Q4 FY25, AbbVie repurchased approximately $6 million of stock and retained about $2.9 billion under its existing authorization, indicating continued flexibility for future buybacks.

Shares of ABBV have soared by around 21% over the past year, as the company’s growth has been driven by the strong performance of Skyrizi and Rinvoq, whose rapid expansion has more than offset the decline of Humira following biosimilar competition, strong earnings execution, and confidence in the long-term pipeline.

Currently, the stock is trading at a premium to its historical averages based on non-GAAP trailing and forward P/E ratios and EV/EBITDA, reflecting improved investor confidence in its ability to navigate the post-Humira transition. Compared to its peers, such as Pfizer, Johnson & Johnson, Merck, Amgen, and Bristol Myers-Squibb, ABBV is trading in the moderate-to-high valuation range among most large pharma peers, but below high-growth names like Eli Lilly. This positioning suggests that the market views AbbVie as a stable, cash-generating company with moderate growth prospects rather than a deep-value opportunity or a high-growth story. As a result, future returns are expected to be supported primarily by steady earnings growth and a reliable, growing dividend stream, reinforcing AbbVie’s appeal as an income-focused investment.

Analysts remain optimistic about ABBV as the company’s strong and consistent free cash flow supports dividends, R&D, and strategic investments, providing flexibility for long-term capital allocation. Growth is being driven by the rapid adoption of Skyrizi and Rinvoq, and sustained momentum in the immunology franchise. At the same time, continued investment in a broad pipeline and targeted acquisitions is expanding future growth avenues and reducing reliance on any single product.

Against this backdrop, its valuation appears increasingly compelling, with consensus estimates implying roughly 22% upside from current levels and more bullish scenarios suggesting potential gains of up to 43%. Moreover, a discounted cash flow analysis indicates that the stock may be trading at an approximate 48% discount to its intrinsic value.

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Investing Takeaway

For income-focused investors, AbbVie stands out as a reliable cash-generating business with a well-established commitment to returning capital. Its consistent dividend growth reflects strong underlying cash flows, supported by a diversified portfolio and durable demand for its long-term therapies. Importantly, the company’s successful transition away from its legacy blockbuster, Humira has reinforced confidence in the sustainability of these payouts, with newer products now driving both growth and cash generation. While the stock is no longer deeply undervalued, its combination of steady earnings expansion, disciplined capital allocation, and a growing income stream makes it appealing for investors seeking a balance between yield and stability. Over time, returns are likely to be driven less by valuation expansion and more by the compounding effect of dividends and resilient cash flow generation.

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Dividend Investor Portfolio

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Portfolio News

 BlackRock (BLK) reported a strong start to 2026, with its April 14 results highlighting broad-based growth across its platform. The firm generated $130 billion in net inflows during the quarter, supported by continued momentum in iShares ETFs, active strategies, and private markets.

Revenue increased about 27% year-over-year to approximately $6.7 billion, while adjusted EPS rose 11% to $12.53, with both metrics coming in ahead of expectations. Assets under management (AUM) climbed to nearly $13.9 trillion, marking a 20% year-over-year increase, driven by strong client activity despite ongoing market volatility.

Earnings growth was further supported by higher investment and performance fees, along with continued expansion in its technology services. During the quarter, the company repurchased $450 million of its shares and raised its quarterly cash dividend by 10% to $5.73 per share, underscoring its commitment to returning capital to shareholders.

ExxonMobil (XOM) saw mixed operational developments during the week, reflecting both near-term execution challenges and longer-term growth ambitions. The company withdrew an offer to sell two initial liquefied natural gas cargoes from its Golden Pass export facility in Texas, which recently began production but is operating at roughly one-third of its capacity. The plant is currently taking in about 287 million cubic feet per day of natural gas, compared to a nameplate capacity of 800 million cubic feet per day for its first train (an independent industrial unit that converts natural gas to LNG). At the same time, Exxon outlined plans to invest up to $24 billion in deepwater projects offshore Nigeria. Production at the Erha field averaged 63.5 thousand barrels per day in 2025, well below its capacity of 210 thousand barrels per day, highlighting potential upside from ongoing upgrades. The company is also evaluating development of the one billion-barrel Owowo project, signaling continued focus on long-term production growth.

Honeywell (HON) is set to report its first-quarter 2026 results on April 23, with investors closely watching signs for demand resilience across its aerospace, automation, and building technologies segments. Consensus estimates point to earnings of roughly $2.32 per share on revenue of about $9.3 billion, reflecting steady performance despite a mixed macro backdrop.

The upcoming release follows a solid finish to 2025, where the company consistently delivered earnings above expectations. Investors will focus on aerospace momentum, which has been supported by strong demand for aftermarket services, as well as trends in industrial automation and order growth. At the same time, near-term results could be affected by temporary supply chain disruptions, particularly in the Middle East, which may shift some revenue into later quarters.

IBM (IBM) is set to report its first-quarter results on April 22, with investors closely watching its ability to sustain growth across its software and consulting segments. Consensus estimates point to revenue of around $15.6 billion, implying modest year-over-year growth, while adjusted EPS is expected to be near $1.81.

In recent quarters, IBM has benefited from steady demand for hybrid cloud and AI-driven solutions, with its software segment, particularly Red Hat, remaining a key growth driver. However, the consulting business may face some pressure as enterprise clients continue to manage spending cautiously.

Margins will also be in focus, especially as the company balances ongoing investments in AI with cost discipline. Overall, the results should offer a clearer view of how effectively IBM is executing its strategy while navigating a mixed macro environment.

JPMorgan Chase (JPM) reported strong first-quarter results on April 14, with performance driven by robust trading activity and improved dealmaking. Net income rose to about $16.5 billion, or $5.94 per share, exceeding expectations, while total revenue increased roughly 10% year-over-year to around $50 billion.

The bank benefited from a surge in market activity, with trading revenue jumping 20% to a record $11.6 billion, supported by strength in both fixed income and equities. Investment banking fees also climbed 28%, reflecting a rebound in capital markets and advisory activity.

Net interest income (NII) grew 9% to $25.5 billion, supported by solid loan demand, while consumer spending remained resilient and credit quality stable. Despite the strong quarter, management highlighted ongoing macro risks, including geopolitical tensions and market volatility, which could impact future performance. As a result, the bank lowered its FY26 NII forecast to $103 billion, down from a prior estimate of about $104.5 billion.

PepsiCo (PEP) reported better-than-expected results for the first quarter on April 16, reflecting early progress in its efforts to revive demand. Revenue increased about 8.5% year-over-year to $19.4 billion with organic revenue up by 2.6%, while adjusted EPS came in at $1.61, both ahead of expectations.

While international markets remained strong, sales volume in North America dropped as families, especially those with lower incomes, cut back on extra treats. It seems like years of price hikes have finally hit a limit, leading the company to confirm that organic revenue growth for FY26 will likely stay between 2% and 4%. The company expects to return total cash of $8.9 billion to shareholders in FY26, comprising $7.9 billion in dividends and $1 billion in share repurchases.

Philip Morris (PM) is set to report its first-quarter results on April 22, with investors focused on the continued growth of its smoke-free portfolio. Consensus estimates point to revenue of around $9.9 billion and adjusted EPS of approximately $1.82, implying steady year-over-year growth.

In recent quarters, the company has benefited from strong demand for smoke-free products, particularly IQOS heated tobacco and ZYN nicotine pouches, which now account for a growing share of total revenue and profits. Traditional cigarette volumes are expected to remain under pressure, though pricing actions have helped offset declines. Margins and mix will be key areas of focus, as the shift toward higher-margin, reduced-risk products continues.

▣ Verizon Communications (VZ) is set to report its first-quarter results on April 27, with investors closely watching subscriber trends, pricing, and cash flow. Consensus estimates point to revenue of around $34.8 billion and adjusted EPS of approximately $1.21. The company is expected to deliver modest wireless service revenue growth of about 2% to 3%, supported by prior pricing actions and continued migration to premium unlimited plans.

However, focus remains on postpaid phone net additions, which are projected to be in the range of 750,000 to 1 million in FY26, approximately 2 to 3 times the reported result in FY25. Investors will also monitor free cash flow, expected at about $3 billion for the quarter, alongside capital spending trends and dividend coverage.

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Recent Trades

None at the moment, although we are considering adding a stock to our portfolio when the market conditions allow for an attractive entry point. Stay tuned.

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Portfolio Attributes

Dividend Portfolio Yield
Expected Dividend Growth Expected Annual Income
3.94% +6.11% $6,147.05
Yield-on-Cost Adjusted, Weighted
 Average Analyst 12-Month Growth Outlook 10K Per Stock at the Time of Purchase

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Current Portfolio

Name EX-Dividend Date Payment Date Yield on Cost  Annual DPS 
Automatic Data Processing (ADP) Jun 15, 2026 Jul 01, 2026 2.46% $6.80
Amgen (AMGN) May 15, 2026 Jun 05, 2026 3.27% $10.08
BlackRock (BLK) Jun 05, 2026 Jun 23, 2026 2.61% $22.92
Bank of Nova Scotia (BNS) Apr 07, 2026 Apr 28, 2026 5.98% $3.21
EOG Resources (EOG) Jul 16, 2026 Jul 30, 2026 3.06% $4.08
ExxonMobil (XOM) May 15, 2026 Jun 10, 2026 3.64% $4.12
Honeywell International (HON) May 18, 2026 Jun  08, 2026 2.39% $4.76
IBM (IBM) May 12, 2026 Jun 10, 2026 3.14% $6.72
JPMorgan Chase (JPM) Apr 06, 2026 Apr 30, 2026 3.43% $6.00
Kroger (KR) May  15, 2026 Jun 01, 2026 3.08% $1.40
Cisco Systems (CSCO) Apr 02, 2026 Apr 22, 2026 2.22% $1.68
PepsiCo (PEP) Jun 05, 2026 Jun 26, 2026 3.8% $5.69
Philip Morris (PM) Jun 29, 2026 Jul 15, 2026 6.06% $5.88
Qualcomm (QCOM) Jun 05, 2026 Jun  26, 2026 2.44% $3.68
VICI Properties (VICI) Jun 18, 2026 Jul 10, 2026 5.22% $1.8
Verizon (VZ) Apr 10, 2026 May 01, 2026 6.09% $2.76

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Disclaimer

The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment, and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.