AbbVie Inc. Common Stock and Preferred Stock: Understanding the Difference

Investing in the stock market can be daunting, especially for beginners. With numerous companies and stock types available, it's essential to understand the differences between them. One such company is AbbVie Inc., a biopharmaceutical giant with two primary stock types: common stock and preferred stock. This article aims to shed light on the key differences between AbbVie Inc. Common Stock and AbbVie Inc. Preferred Stock, helping investors make informed decisions.

AbbVie Inc. Common Stock (NYSE: ABBV)

Common stock represents ownership in a company and comes with voting rights. Investors who purchase common stock have the potential to profit from the company's growth and success. When AbbVie Inc. earns profits, common shareholders are the first to receive dividends, although the amount depends on the company's dividend policy.

Key Features of AbbVie Inc. Common Stock:

• Voting Rights: Common shareholders have the right to vote on important corporate decisions, such as electing the board of directors.
• Potential Dividends: Investors can earn dividends from AbbVie Inc. Common Stock if the company decides to distribute profits.
• Liquidity: Common stock is highly liquid and can be easily bought and sold on the New York Stock Exchange (NYSE).

AbbVie Inc. Preferred Stock

Preferred stock is another form of ownership in a company but with different characteristics than common stock. Preferred shareholders have a higher claim on the company's assets and earnings than common shareholders, but they do not have voting rights.

Key Features of AbbVie Inc. Preferred Stock:

• Higher Dividends: Preferred shareholders typically receive fixed dividends, which are often higher than the dividends paid to common shareholders.
• Seniority: In case of bankruptcy or liquidation, preferred shareholders have a higher claim on the company's assets than common shareholders.
• Lack of Voting Rights: Preferred shareholders do not have voting rights, which means they cannot influence corporate decisions.

Comparison of AbbVie Inc. Common Stock and AbbVie Inc. Preferred Stock

When comparing AbbVie Inc. Common Stock and AbbVie Inc. Preferred Stock, investors must consider their financial goals and risk tolerance. Here's a brief comparison:

• Dividends: AbbVie Inc. Common Stock may offer higher dividend yields compared to preferred stock, depending on the company's dividend policy.
• Risk: Common stock is riskier than preferred stock since shareholders have a lower claim on the company's assets in case of bankruptcy.
• Liquidity: Both stock types are highly liquid and can be easily bought and sold on the NYSE.

Case Study: AbbVie Inc. Stock Performance

To illustrate the performance of AbbVie Inc. stock, let's look at its stock price history over the past five years. In 2017, AbbVie Inc. Common Stock (ABBV) was trading at around 70 per share. By 2022, the stock price had surged to over 150 per share, representing a significant increase in value.

In contrast, AbbVie Inc. Preferred Stock (ABBV.P) has also performed well, with the stock price increasing from around 25 per share in 2017 to over 50 per share in 2022.

This case study demonstrates that both common stock and preferred stock can offer attractive returns, depending on the company's performance and market conditions.

In conclusion, understanding the differences between AbbVie Inc. Common Stock and AbbVie Inc. Preferred Stock is crucial for investors looking to diversify their portfolios. By considering their financial goals and risk tolerance, investors can make informed decisions and potentially benefit from AbbVie Inc.'s stock performance.