As of July 20, 2023, Abbott Laboratories (ABT, Financial) stock has experienced a gain of 4.24%, with a current price of $111.83. This global healthcare company, with a market cap of $194.5 billion, has a GF Value of $122.67, indicating a fair valuation. The company has consistently delivered with an earnings per share of $3.29 and sales reaching $41.5 billion.
Abbott Laboratories, a renowned name in the healthcare sector, manufactures and markets a diverse range of products. These include medical devices, adult and pediatric nutritional products, diagnostic equipment, testing kits, and branded generic drugs. With a broad portfolio that includes pacemakers, coronary stents, infant formula, molecular diagnostic platforms, and more, the company has a significant presence outside the United States, accounting for approximately 60% of its sales.
GF Value of Abbott Laboratories
The GF Value of Abbott Laboratories, a unique measure of intrinsic worth, suggests that the stock is fairly valued. This assessment is based on historical multiples, an internal adjustment factor from GuruFocus considering the company's past growth, and future business performance estimates. As the current stock price aligns closely with the GF Value, it indicates that the stock is neither overvalued nor undervalued.
Given this fair valuation, the long-term return of Abbott Laboratories' stock is likely to echo the rate of its business growth. This notion is visually represented in the GF Value chart below:
Financial Strength and Profitability
Investing in financially robust companies reduces the risk of permanent capital loss. Abbott Laboratories, with a cash-to-debt ratio of 0.56, falls behind 75.7% of companies in the Medical Devices & Instruments industry. Despite this, its overall financial strength is ranked 7 out of 10 by GuruFocus, indicating fair financial health.
Profitability is another crucial factor for investors. Abbott Laboratories, with a decade-long streak of profitability, boasts an operating margin of 16.77%. This places it ahead of 77.83% of companies in its industry. The company's strong profitability is further reflected in its rank of 9 out of 10.
Growth and ROIC vs WACC
Growth is a vital component of a company's valuation. Abbott Laboratories has a 3-year average revenue growth rate that surpasses 61.39% of companies in its industry. Its 3-year average EBITDA growth rate is 16.4%, outperforming 61.53% of companies in the same industry.
Comparing a company's return on invested capital (ROIC) with its weighted average cost of capital (WACC) can provide insights into its profitability. Over the past 12 months, Abbott Laboratories' ROIC and WACC were 11.12 and 7.43, respectively, suggesting the company is creating value for its shareholders.
Conclusion
In conclusion, Abbott Laboratories appears to be fairly valued. The company exhibits fair financial health, strong profitability, and commendable growth, ranking higher than 61.53% of companies in the Medical Devices & Instruments industry. For more in-depth information about Abbott Laboratories' stock, you can explore its 30-Year Financials here.
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