When investors research dividend stocks, the most famous group that comes to mind are the Dividend Aristocrats: S&P 500-listed companies that have increased dividends for 25+ years. On the other hand, Dividend Kings are companies that have increased their dividends for 50+ years and don’t require listing on any particular index. But, even rarer are the Dividend Zombies: companies that celebrate 100 years of paying dividends.
In this article, we’ll feature a company that checks all three boxes: A dividend aristocrat, a dividend king, and one that just declared its 400th quarterly dividend (100 years): Abbot Laboratories.
Who is Abbott Laboratories (ABT)?
Abbott Laboratories is a healthcare company that develops and manufactures medical products used worldwide. It has been around for over 135 years since its incorporation in 1894. Today, the company has a market cap of over $186 billion, employs over 115,000 people across over 160 countries, and is headquartered in Chicago, Illinois.
Abbott Laboratories operates four main business segments: pharmaceuticals, diagnostics, nutritional, and medical devices. Its main products include generic drugs, laboratory testing equipment, infant formulas, and devices for heart conditions and chronic pain.
Abbott has been in the news recently, and unfortunately, not for a good reason. Difficulties related to baby formula recall disfigured their squeaky clean track record - at least temporarily. That said, I can’t think of any company immune to setbacks. The key is how a company redeems themselves.
If shareholders are to decide, consider that Abbott Laboratories just announced an increase of their dividend for the 52nd year in a row while also celebrating paying 100 years of dividends.
Indeed, Abbott warrants a closer look at dividend growth for investors looking for a solid buy-and-hold strategy.
Abbot Laboratories' Dividend History
Abbott Laboratories recently announced a dividend increase of 7.8 percent to $0.55 per share and an incredibly rare achievement—the company's 400th consecutive quarterly payout since 1924. Abbott Laboratories has consistently offered shareholder value even in years of pandemics, depressions, recessions, and more. Shareholders who own Abbott stock by the close of trading on January 12, 2024, will receive the increased quarterly dividend on February 15, 2024.
Global Market Position
Abbott Laboratories is well-positioned to benefit from the aging global population and the increased healthcare spending that comes with it. As people age, the demand for medical devices and diagnostics to treat chronic conditions grows.
With the 65+ population expected to reach 1.6 billion by 2050, Abbott Labs is positioned to serve this growing market segment. Moreover, the company’s nutrition business provides science-based nutrition products to address chronic diseases. As obesity, diabetes, and other lifestyle disease rates grow globally, Abbott Laboratories' nutrition sciences and products will be needed to help people live healthier lives.
Abbot’s Most Recent Third-Quarter Financial Highlights
Abbott Laboratories reported a robust third quarter in 2023 across business segments. while the Nutritional segment was a highlight, generating $2.073 billion in revenue. The Established Pharmaceuticals segment reported 11.6 percent organic sales growth and $3.84 billion in total sales.
In terms of profitability, Abbott posted $1.647 billion in operating earnings and $1.436 billion in net earnings, up 4.44% QoQ, and adjusted net earnings of $2 billion for the third quarter. The company remains on track to meet its full-year adjusted diluted EPS guidance of $3.14 to $3.18.
What do the Analysts Say About Abbott Laboratories?
Analysts also rate Abbott stock as a "Strong Buy" with a high price target of $133, representing over 23 percent upside potential. These factors are strong indicators of Abbott's positive financial momentum and potential growth for investors.
Final Thoughts
Abbott Laboratories has a proven track record and offers a lifetime of dividends. Investors seeking reliability, dividends, and future growth potential should consider buying ABT stock now before future dividend increases and capital appreciation occur. Don't wait on this Dividend Aristocrat positioned for future growth in the expanding global healthcare market.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
