ABT Stock – 3 Reasons to Buy and Hold This Dividend Aristocrat

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Abbott Laboratories (NYSE:ABT) ended fiscal 2014 with a solid fourth-quarter earnings report. And although foreign currency headwinds threaten to limit revenue and EPS growth, ABT will remain firmly rooted on its path to short-term prosperity.

ABT Stock - 3 Reasons to Buy and Hold This Dividend AristocratHere are three reasons you should buy and hold ABT stock.

ABT Stock Will Benefit from Emerging Markets

In June 2014, the global pharmaceuticals and healthcare products company struck an agreement with Mylan Inc (NASDAQ:MYL), promising to sell off a portion of its generics pharmaceuticals business.

In doing so, Abbott Labs can now focus on its branded generics pharmaceuticals business in emerging markets.

This fiscal year, ABT expects half of its sales to come from emerging markets. And as an established pharmaceuticals leader in both India and Latin America, Abbott Laboratories will only benefit from the growth of these nations’ middle classes, specifically in demand for its global Nutrition segment. As Abbott increases its presence in emerging markets, it should see not only continued growth, but increased protection against slowdowns in any one particular region.

ABT Segments Are Strong

Abbott Laboratories functions through four major segments: Nutrition, Established Pharmaceuticals, Medical Devices and Diagnostics.

Worldwide Nutrition reported a 6% year-over-year sales increase, helped in large part by an 11.4% sales increase in its Pediatric Nutrition unit. Even with lost revenue from its 2013 recall on baby formula, ABT stock recovered spectacularly. Demand continued to spike, and Abbott Labs was forced to open new facilities to meet consumer needs.

The Established Pharmaceuticals (26.9%), Medical Devices (3.9%), and Diagnostics (3.2%) segments also experienced growth in Q4.

All told, ABT reported total sales that grew 3% year-over-year to $20.2 billion, and earnings that grew 20.7% to $1.98 per share.

ABT Stock Is a Healthy Dividend Aristocrat

Abbott Laboratories has increased dividend payouts for an impressive 42 consecutive years, making it a member of the S&P 500 Dividend Aristocrats Index. The most recent increase to the dividend was in January, when the quarterly payout on ABT stock was hiked by 9% to 24 cents.

At current prices, ABT yields 2% — meaning Abbott isn’t necessarily a significant source of income, but it still yields better than the 10-year Treasury.

While a strong dollar poses a short-term threat to ABT’s business overseas, currency headwinds won’t last forever. Meanwhile, Abbott Laboratories will continue to thrive on international expansion and product innovation.

ABT stock is an attractive investment for investors who seek steadily growing income that boasts long-term shareholder value.

As of this writing, Anna Rider did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2015/02/abt-stock-abbott-laboratories-dividend-aristocrats/.

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