Dividend Aristocrats Part 30: Abbott Laboratories

Abbott Laboratories (ABT) was founded in 1888 and has grown to reach a market cap of more than $67 billion.

Abbott Laboratories has been wildly successful in its long history.The company’s success is not a historical relic; Abbott has positioned itself well to take advantage of growth in the emerging market health care sector.

Many corporations talk about being global.Abbott Laboratories really is global.The company generates 69% of its sales internationally – and around 50% of sales come from emerging markets.

Over the long run, this will serve the company well – especially its large exposure to emerging markets.  The company takes a unique country-centered approach to growth:

“By designing and manufacturing our products in the markets we serve, we can better match them to local preferences, and produce them more efficiently. And by keeping our costs local, we reduce our exposure to foreign currency fluctuation. 

This approach also lets us build our presence and strengthen our relationships with key stakeholders in every country in which we do business.”

Source:  Abbott 2015 Annual Shareholder Meeting, page 1

In part 30 of Sure Dividend’s 52 part Dividend Aristocrats series, we will take a closer look at the growth prospects, valuation, and total return potential of Abbott Laboratories.

Business Overview

The company operates in 4 segments. Each segment is shown below along with the percentage of total revenue generated for Abbott Laboratories during the first 9 months of fiscal 2015:

The Nutrition segment manufactures and markets Ensure, Pedialyte, Similac,Zone Perfect, Elecare, and other health oriented nutrition products for every stage of human life from being an infant to old age.

The Medical Devices segment manufactures and sells optical, vascular, and diabetes care devices and equipment to health care providers.

The Diagnostics segment manufactures and sells various instruments, tests, and diagnostic equipment to blood banks, laboratories, and other health care facilities throughout the world.

The Established Pharmaceutical segment sells generic pharmaceuticals outside the United States.The segment operates primarily in emerging markets.

Abbott Laboratories Dividend History

Abbott Laboratories has paid a dividend every year since 1924.The company has increased its dividend payments for 43 consecutive years (excluding the effects of spin-offs).The company’s stock currently has a dividend yield of 2.1%.