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Abbott Laboratories's Dividend Analysis

Assessing the Upcoming Dividend and Historical Performance

Abbott Laboratories (NYSE:ABT) recently announced a dividend of $0.55 per share, payable on 2024-05-15, with the ex-dividend date set for 2024-04-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Abbott Laboratories's dividend performance and assess its sustainability.

What Does Abbott Laboratories Do?

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Abbott Laboratories manufactures and markets a diverse range of medical devices and healthcare products. Its portfolio includes cardiovascular and diabetes devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, as well as branded generic drugs. Notable products encompass pacemakers, implantable cardioverter defibrillators, neuromodulation devices, coronary stents, catheters, infant formula, nutritional liquids for adults, continuous glucose monitors, and various diagnostic tools. With a global presence, Abbott Laboratories generates approximately 60% of its sales outside the United States, highlighting its international market strength.

Abbott Laboratories's Dividend Analysis
Abbott Laboratories's Dividend Analysis

A Glimpse at Abbott Laboratories's Dividend History

Abbott Laboratories has upheld a remarkable record of consistent dividend payment since 1972, distributing dividends quarterly. The company is distinguished as a dividend king, a prestigious title reserved for companies that have raised their dividend annually for at least 52 years. This achievement underscores Abbott Laboratories's commitment to delivering shareholder value over the long term. Below is a chart illustrating the annual Dividends Per Share to track historical trends.

Abbott Laboratories's Dividend Analysis
Abbott Laboratories's Dividend Analysis

Breaking Down Abbott Laboratories's Dividend Yield and Growth

Abbott Laboratories currently boasts a 12-month trailing dividend yield of 1.87% and a 12-month forward dividend yield of 1.98%. This forward-looking metric indicates an anticipated increase in dividend payments over the next year. Over the past three years, Abbott Laboratories's annual dividend growth rate was a robust 12.30%, which further expands to 13.30% over a five-year period. The decade-long growth rate stands at an impressive 11.80%. With these figures in mind, the 5-year yield on cost for Abbott Laboratories stock is approximately 3.49% as of today.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. Abbott Laboratories's dividend payout ratio is currently 0.49, which suggests a balanced approach between distributing earnings to shareholders and retaining funds for future growth and stability. Additionally, Abbott Laboratories's profitability rank is an impressive 9 out of 10, reflecting strong earnings potential relative to its peers. The company's consistent positive net income over the past decade further reinforces its financial health.

Growth Metrics: The Future Outlook

Abbott Laboratories's growth rank of 9 out of 10 signals a positive growth trajectory compared to its competitors. Despite a strong revenue per share and a 3-year revenue growth rate of 5.80%, Abbott Laboratories's revenue expansion is slower than approximately 55.63% of global competitors. Nevertheless, the company's 3-year EPS growth rate is a promising 21.30% per year on average, although it lags behind approximately 34.89% of global peers. The 5-year EBITDA growth rate of 26.10% also indicates healthy growth, outpacing approximately 74.31% of competitors.

Concluding Thoughts on Abbott Laboratories's Dividend Prospects

In conclusion, Abbott Laboratories's upcoming dividend, historical dividend growth, moderate payout ratio, and strong profitability provide a compelling case for investors seeking stable and growing income streams. The company's robust financial health and growth metrics suggest that its dividend payments are sustainable and likely to continue on an upward trajectory. Investors interested in high-dividend yield stocks may consider using the GuruFocus High Dividend Yield Screener for further research and investment opportunities.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.