“From January 1, 1990 to December 31,2021, Abbott Labs stock returned roughly 14,090% versus the S&P 500 return of roughly 2540% or 5x the performance as the market.”
COMPANY PROFILE
From removing the regular pain of fingersticks as people manage their diabetes to connecting patients to doctors with real-time information monitoring their hearts, from easing chronic pain and movement disorders to testing half the world’s blood donations to ensure a healthy supply, Abbott’s purpose is to make the world a better place by bringing life-changing health technologies to the people who need them. That’s our commitment to helping you live your best life.
Earnings
Style Factor Benefits
From a factor scoring perspective versus the other 199 brands in the brands index, here’s where Abbott Labs scores well as of 12/31/2021:
80% attractive dividend yield
80% & 90% across price momentum periods
80% attractive dividend growth - 25+ years of raising the dividend - a dividend aristocrat
88% low probability of default and low beta stock
95% high 5 year ROIC growth
87% high FCF
88% strong revisions across sales, EPS and earnings surprises
As an investor in the “life-time” spending theme via the leading brands serving consumers, it’s hard to ignore Abbott’s place in an aging society. ABT has a strong foot-hold in key categories: Med Tech, Nutrition, Diagnostics, and pharma. The stock is rarely cheap but it’s a consistent earner with strong dividend growth. When you can find steady growth, strong innovation, and visionary management in a company, you buy it and you buy more on dips.
1/30/22 Update:
In 2021, ABT achieved >40% EPS growth while advancing product lines across the portfolio. This is such a steady-eddy brand in a very stable industry catered towards an aging society and one that treats important wellness categories. I always worry about tough comparisons for companies, in ABT’s case the BinaxNOW at-home Covid test but it does not feel like corporations and governments will slow their covid-testing rules anytime soon. The rest of ABT’s business is recovering well but could always see lumpy quarters depending on people’s sentiment around elective procedures and setting doctor visits. There are always macro factors that all these companies have to deal with, namely staffing shortages at hospitals, poor consumer sentiment and fear towards Covid resurgence, supply chain issues with devices, and inflationary risks. The CEO offered this during the earnings call: “we offered a forecast that is "derisked, fully funded for long-term growth opportunities, and [allows for] potential upside as we go into the remainder of the year." To me, they are snad-bagging and feel quite confident but there was no reason to be aggressive given the uncertainty. ABT is a solid dividend aristocrat, steady performer and a highly profitable business. This makes it a great long-term core holding. When I get a chance, I add on dips around the core but this one seems well suited for a continued rocky 1H 2022.