Assessing the Sustainability and Growth of Abbott Laboratories's Dividends
Abbott Laboratories (ABT, Financial) recently announced a dividend of $0.55 per share, payable on 2024-02-15, with the ex-dividend date set for 2024-01-11. 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?
Abbott Laboratories manufactures and markets a broad range of health care products. These include medical devices, adult and pediatric nutritional products, diagnostic equipment and testing kits, and branded generic drugs. With a diverse portfolio that includes pacemakers, nutritional liquids, and molecular diagnostic platforms, the company caters to a global market, deriving approximately 60% of its sales outside the United States.
A Glimpse at Abbott Laboratories's Dividend History
Abbott Laboratories has maintained a consistent dividend payment record since 1972, distributing dividends quarterly. The company is recognized as a dividend king, a prestigious title reserved for companies that have increased their dividend for at least 50 consecutive years, highlighting its commitment to returning value to shareholders.
Below is a chart showing the annual Dividends Per Share for tracking historical trends.
Breaking Down Abbott Laboratories's Dividend Yield and Growth
As of today, Abbott Laboratories currently has a 12-month trailing dividend yield of 1.80% and a 12-month forward dividend yield of 1.95%, indicating an expected increase in dividend payments over the next year. Over the past three years, the annual dividend growth rate was 13.70%, slightly decreasing to 13.40% over a five-year span. The long-term trend is also positive, with a 6.10% annual growth rate over the past decade. The 5-year yield on cost for Abbott Laboratories stock is approximately 3.38%.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio, which currently stands at 0.68 as of 2023-09-30, is a critical measure of dividend sustainability. Abbott Laboratories's ratio suggests a balance between distributing earnings to shareholders and retaining funds for future growth. Additionally, the company's profitability rank is impressive at 9 out of 10, indicating strong earnings potential relative to peers. Consistent positive net income over the past decade bolsters this high profitability ranking.
Growth Metrics: The Future Outlook
Abbott Laboratories's growth rank of 9 out of 10 reflects a promising growth trajectory. The company's revenue per share and 3-year revenue growth rate, averaging an 11.40% annual increase, outperform approximately 60.83% of global competitors. The 3-year EPS growth rate, at an average of 23.10% per year, outperforms approximately 67.05% of global competitors. Moreover, the 5-year EBITDA growth rate, which outperforms about 95.7% of global competitors, is a robust 69.40%.
Concluding Thoughts on Abbott Laboratories's Dividend Profile
Abbott Laboratories's dividend payments, growth rate, payout ratio, profitability, and growth metrics paint a picture of a company committed to delivering shareholder value through consistent and sustainable dividends. With a strong track record as a dividend king, robust financial health, and promising growth metrics, Abbott Laboratories stands out as an attractive option for value investors focused on income-generating stocks. The question for investors now is whether Abbott Laboratories will continue its impressive streak of dividend increases, and how its strategic initiatives will support this goal in the evolving healthcare landscape.
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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.
