Billionaire Israel Englander Is Doubling Down on These 2 Outstanding Dividend Stocks. Should You?

Millennium Management more than doubled its stakes in dividend-paying AbbVie and Costco during Q2, highlighting confidence in their resilient operating profiles. AbbVie posted Q2 revenue growth of 10.2% to roughly $17.0 billion, supported by Skyrizi and Rinvoq, and acquired Apogee Therapeutics for $10.9 billion to add the phase 3 atopic-dermatitis asset zumilokibart. Costco delivered fiscal Q3 revenue growth of 11.6% to $70.5 billion, 9.8% comparable-sales growth, and 15% EPS growth to $4.93, though its 40.8x forward P/E and shares' 4% one-year decline underscore valuation and near-term volatility risks.

Analysis

The reported Millennium position increase is not a directional signal without the underlying 13F line items: the fund’s multi-strategy structure can create large gross equity positions that are offset by options, swaps, or sector hedges. More importantly, the cited Apogee transaction terms require independent verification before underwriting any pipeline value; until then, ABBV should be valued on the durability and operating leverage of its established immunology franchise, not a speculative obesity optionality narrative.

ABBV’s favorable setup is a 6-18 month earnings-revision story if immunology growth can offset erosion in legacy products while acquired assets do not dilute margins or increase leverage beyond management’s deleveraging capacity. The key risk is that payers intensify formulary pressure as competing immunology biologics and biosimilars proliferate; a deceleration in prescription demand or lower net pricing would compress both EPS estimates and ABBV’s defensive multiple. ABT is a modest indirect beneficiary if healthcare investors rotate toward quality growth without AbbVie-specific pipeline risk, but it is not a clean read-through.

COST remains a high-quality business priced as one, leaving the shares more exposed to a small comp-sales, membership-renewal, or gross-margin miss than to an outright demand collapse. Over the next 1-3 months, the market will focus on traffic versus ticket, renewal rates, discretionary mix, and whether e-commerce growth is accretive after fulfillment costs. The contrarian view is that lower fuel prices can reduce reported sales growth while improving member wallet capacity and merchandise margins; investors should avoid interpreting a headline sales deceleration mechanically.

The cleaner relative-value expression is ABBV versus COST rather than outright beta exposure: ABBV offers a more identifiable earnings and capital-return support profile, while COST requires premium-multiple persistence. This thesis is falsified if ABBV cuts medium-term immunology guidance, reports material net-price deterioration, or if COST demonstrates renewed accelerating comparable sales and margin expansion sufficient to sustain its valuation premium.

Key Decisions for Investors

• Initiate a 6-12 month pair: long ABBV / short COST, dollar-neutral, only if the relative valuation remains near historical extremes. Target 10-15% relative return from ABBV estimate resilience and/or COST multiple normalization; stop if ABBV immunology revenue growth falls below management’s long-term framework or COST delivers two consecutive quarters of accelerating comps plus margin expansion.
• Do not assign value to APGE or an AbbVie pipeline-acquisition thesis until transaction documentation, ownership terms, trial design, and financing treatment are independently verified. Set an event alert for definitive merger materials and phase-3 endpoints rather than buying APGE on article-driven speculation.
• For existing COST longs, reduce tactical exposure into the next earnings release or hedge with 3-6 month put spreads; the asymmetry is unfavorable at a premium multiple where a modest renewal, traffic, or gross-margin miss can drive disproportionate de-rating. Re-add only after evidence that membership economics and merchandise margins are absorbing macro volatility.
• Maintain ABBV as the preferred defensive healthcare exposure versus broad staples-like consumer defensives over 6-18 months, but cap position size pending visibility on acquisition-related leverage and integration costs. Monitor quarterly immunology net sales, realized price, and net-debt-to-EBITDA as the three thesis-critical variables.