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Abbott Laboratories Message Board

  • physalia2000 physalia2000 Jan 24, 2003 3:28 PM Flag

    Dividends

    Aren't we about two weeks away from when Abbott will announce what the dividend will be for May? Will they pay the same as now, raise it 1 cent, 2 cents or go for 2 and one-half cents?
    If Abbott earns $2.20 this year and the stock drops to $31 it will have the lowest PE since I have been tracking the stock which goes back to 1961. I would say at $31 a share it would be an excellent buy. The PE with earnings of $2.20 would be 14. From 1961 until 1996 the PE varied between 14 and 23 and by 1999 the PE had risen to 39. Obviously, anyone shoud have been able to deduce that the stock was vastly over priced at 53 in April of 1999.

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    • Thanks, I will follow up on KMP
      and TRP

    • I've commented on NLY before. It makes money on difference between interest it gets from mortgage securities and interest it pays on capital raised in present low interest market. Not a bad play 2 yrs ago. You can still make money but remember that when bank rates start to go up, income (and thus div payout) decreases. Another problem is that they have not hedged against possible rate increases. Might be worth buying a little on dip and keeping eye on rate changes.

      MFS? Don't know what this is.

      ACAS advises/invests in mid-size businesses. Nice div but last EPS was depressed. Without earnings, div will suffer. Risky one.

      PWI & PVX (Canadian energy/exploration etc.)
      No earnings, high div. very risky. Speculative.

      Canada/US energy: Power traders/generators have lots of debt. Check for cash flow if you want div sustained. Canadian gas on upswing and you might look at TransCanadian Pipeline (TRP). The div is only 4.3% but they have cash flow of $1B last year. TRP should have continued growth in div but slow growth in stock value.

      My favorite is KMP, with 7% div and good stock growth prospects. Major gas pipeline owners. They are a limited partnership and act like REITS in that they are required to pay out much of earnings in div. Good Luck!

    • I am intrigued by your ownership of REITS and would like to have your opinions on a number of high dividend stocks.
      I'm considering these and am hoping to get some opinions:

      Which one of these would you consider as having more assurance of continuation of the dividends: MFA or NLY?
      ACAS pays a dividend of 11-12% and has paid 70% of its IPO price in 1997 in dividends?
      Do you have an opinion on this one?
      I'm looking at what are Canadian energy trusts that pay dividends of 15-20%, and they don't look like they're going to be high risk as they have both oil and gas properties in varying proportions-- these two are PWI and PVX.
      Do you have an opinion on any of these?

    • I'm diversified. Core holdings in health related stocks/REITS are blue chips; AMGN, JNJ, PFE, ABT, FRX, CAH, WLP, UNH, HCP and HR. Too old to take too much risk. If ABT was dog (like SGP, which I once owned) I would have dumped long time ago. Fortunately, I was stopped out of ABT last summer before it dived to $31. Got back in (smaller holding) at low 30's. If you look at drug stocks, or drug index, they all went sideways since 1999. Channel traders probably made some money. If you can make money on ELAN, more power to you. I just can't take the risk.

    • It's obvious that you are not objective about this company-but rather one-sided!
      Your posts see the Abbott world as the only world on the planet!
      The real issue that really gets me is that this stock price is about 20.00 less than where it should be were it not for the fiascos that erupted 1999 and on!
      The diagnostics industry is growing at low to mid double digits, and Abbott turns in a declining sales number--even with the benefit of better exchange rates, and after a number of acquisitions in Diagnostics.
      Let's cut to the chase- and let's demand integrity and honesty! (just like the commercial says)

    • Ok then I stand corrected on the interest rate!
      It is 5.4%--for total annual interest cost of approximately 378 million dollars!
      There is a relationship between the FED FUNDS rate and all interest rates!!
      And let's not pick on Elan, because I think it was you who suggested that you thought that based on the posts that it appeared that you should sell all your Abbott to buy Elan!
      I think that would have been a wise decision for all of us (me included) would have sold this for 43.00 at the time, that's about 15% more than now! and bought Elan at 2.90--it closed at 3.74 on Friday--that's about 25% higher--so we would be ahead by 40%--Unfortunately, I did not sell my Abbott to buy more Elan--but looks like I should have!
      By the way--Elan has very little if any bank debt--only bonds!
      And maybe you should take a basic finance course to learn that Amgen is trading at 40X earnings--and they bought Immunex with their 40+ PE. It's a cheaper currency than cash for companies with high PE's.

    • Knoll was a div of BASF who wanted to get out of drug business. It's unlikely BSAF would accept stock when it needed cash to restructure its main business.

      Using stock (when you can) is one way to acquire another company, but it does dilute the stock. Cash is another, but it limits future cash acquisitions and raises debt when you issue bonds to cover purchase (unless you have $9B in cash flow like PFE). They did what they could to grow when their pipeline was thin.

      Interest rate cuts??? What does bank rates have to do with bond interest rates? If ABT borrowed from a bank (unsecured line of credit) they would likely pay through the nose. Companies in trouble (like ELAN) have no choice when debt comes due and they have to make payments. ABT financed half of the Knoll purchase by floating short term bonds (see ABT 2Q 2001) with average coupon rate of 5.4%.

      Your lack of knowledge about simple finance should concern you. You need to find a financial consultant before you go belly-up.

    • Only,

      Thanks for the piece of trivia on the state legislatures picking the senators. Didn't know that.

    • Newby,

      minus 4F an hour ago when I was grocery shopping.

      Bessemer is the county seat, somewhat smaller than Ironwood, seems to have a more progressive population as they passed a referendum a few years back to spruce up their high school. Not quite the "Not in my back yard" attitude that is common around here.

      Bread of Life makes the best bread to be found around here. A friend of mine drives up from Wausau and buys 15 to 20 loaves at a time. No web site, seems they have plenty of business w/o one.

      Was routing out my sump pump line outside today with a small snake. Bare hands didn't get cold in that water below zero, go figure.
      Must be that walk thru the snow with those heavy boots getting that blood flowing...

      see ya.

    • I am rather concerned about how you have typified the women as materialistic, etc.,or is it their selfish husbands, or maybe just maybe, everybody got so caught up in materialistic BS that true values were forgotten! But then again, the selfish husbands of stay at home wives would consider their spouses of lesser intellect and we've all seen how that goes sometimes--?
      To place the blame entirely on the wife is ridiculous. I have a daughter, and it is my intention to make her independent and self sufficient-not needing some man to "identify who she is"!
      because of the attitude you just expressed!

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