In Focus – ABT

To determine whether a company is one of the best stocks to buy now requires a detailed analysis of that company. In our “In Focus” reports we perform a more detailed analysis of one of the roughly 2,000 companies we follow. In this report, we will be covering Abbott Laboratories.

Background

Abbott Laboratories (ABT) develops, manufactures, markets, and sells a diversified line of healthcare products. At the end of 2014, it had four business segments: Established Pharmaceutical Products, Nutritional Products, Diagnostic Products, and Vascular Products.

Abbott Laboratories is located in Abbott Park, Illinois. But it has a worldwide presence and does business in over 150 countries.

Stock Fundamentals

Analyzing a firm that goes through a major spinoff is a little tricky since it is hard to determine what performance to attribute to what part of the company. It is for this reason that analyzing ABT is a little more difficult than the average company since it spun off its pharmaceutical operation, AbbVie, in 2013. But we believe we can make the following points.

Despite ABT’s somewhat modest equity-asset ratio (0.461), its financial strength is excellent. Its worldwide presence, diversified customer base, and diversified product lines allow it to use more leverage than the average company. Consequently ABT possesses one of the strongest balance sheets of any company we follow.

ABT’s has experienced (and will probably continue to experience) relatively low and modest growth in sales and profits. ABT excels in the reliability with which it has achieved this growth. It is also reliably cash flow and free cash flow positive.

If we had to sum up ABT as succinctly as possible, we would say it is a very safe company with very little profit potential. It is the proverbial low-risk/low-return investment. It is an excellent choice if you are a risk-averse investor who wants a rock-solid dividend. It is only an average investment, if you are slightly more demanding.

Stat Sheet – Abbott Laboratories    4/29/16

Ticker ABT
Industry Biotechnology & Drugs
Price $ 38.90
Market Cap  $ 58,174
Dividend Yield 2.67
Dividend/CFOp 0.461
Equity/Assets 0.506
Average Equity/Assets 0.450
Financial Strength Above Average
Growth Prospects Below Average
Beta 0.94
Price Volatility Below Average
Stock Fundamentals C

(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016.)

We cover 2,000 companies. If you would like to see more research on all these companies, click the link below.

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Disclaimer – Information contained herein has been obtained from sources believed to be reliable. Neither the author nor the publisher guarantees the accuracy or completeness of the information and methods described. This information is offered as general commentary only. It is not intended as investment advice. Investment and trading of securities involves risk, including of loss of capital. Market conditions change over time, and no assurance can be given that a reader may apply the principles described to make a profit. The author and publisher expressly disclaim all and any liability to any person for any investment or trading decisions that the reader may make in reliance on this information.

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In Focus – ABT

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