Abbott Laboratories (ABT, Financial) announced a regular quarterly dividend of 26.5 cents per share June 9.
The dividend will be paid on Aug. 15 to shareholders of record as of July 14.
Based on the quarterly dividend, the annual dividend paid will be $1.06 per share. The dividend yield is 2.28%.
For the second quarter of 2017, analysts forecast the company will generate an EPS of 61 cents per share, a 10.91% increase from EPS of 55 cents reported by the company at the end of the comparable quarter of 2016.
Concerning revenue, analysts forecast $6.63 billion on average for the quarter, which is 24.40% higher than second-quarter 2016 revenue. It ranges between a low estimate of $6.52 billion and a high estimate of $6.72 billion.
For the year, analysts estimate EPS of $2.45, ranging between a low of $2.43 and a high of $2.47. This represents a 12.3% increase from the same figure a year ago. Revenue is expected to increase 26.50% to $26.37 billion in 2017, up from $20.85 billion in 2016.
The forward price-earnings (P/E) ratio – as forecast by analysts – is 16.97 that, multiplied by an EPS of $2.45 as estimated by analysts for full fiscal 2017, will give a value of $41.58 per share. This value shows that Abbott Labs is overvalued by the stock market according to the current share price of $46.85 which is also a few cents lower than the 52-week high of $46.94 per share. The 52-week low is $36.76 per share.
The analysts' average target price per share is $48.25, which represents a 3.03% upside from the current share price. Therefore, analysts still see a margin – although small – for a further increase in the market value of the health care stock over the coming months.
The recommendation rating is 2, which means that most of the analysts surveyed recommend buying shares of Abbott Laboratories. The recommendation rating ranges between 1.0 (Strong Buy) and 5.0 (Sell).
Year to date, Abbott has gained nearly 22% and is now trading at $46.85 per share with a P/E ratio of 48.73, a price-book (P/B) ratio of 2.59 and a price-sales (P/S) ratio of 3.64.
As of March 31 Abbott had approximately $8.86 billion in cash and securities. The total debt amounted to $24.07 billion, a 15% increase from the last quarter of 2016 because of the assumption of the acquired St. Jude Medical’s (STJ, Financial) previously issued debt.
The long-term debt-equity ratio is 75.70 versus an industry average ratio of 10.54, meaning the company is highly indebted compared to its peers, according to Reuters. Approximately 65% of the total amount of the long-term debt is not due for five years.
In addition, despite the huge amount of debt, Abbott Labs can rely on a total liquidity of approximately $14 billion, which includes a line of credit of $5 billion with maturity in 2019. The health care company can generate a yearly amount of cash flow of approximately $3.2 billion to $3.5 billion from operations that can also be used to fulfill its debt obligations.
Abbott has 1.74 billion shares outstanding. The percentage of shares held by insiders is 0.21% and by institutions is 70.50%. The number of shares available for trading is 1.72 billion. Abbott has a market capitalization of $81.25 billion.
During the first quarter, Vanguard Health Care Fund (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) increased their positions by 63.66%, 220.24% and 12.59%.
Joel Greenblatt (Trades, Portfolio) and Richard Pzena (Trades, Portfolio) decreased their positions in Abbott by 60.43% and 42.13%.
George Soros (Trades, Portfolio) sold out.
Disclosure: I have no position in Abbott Laboratories.
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