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Abbott Laboratories Message Board

  • df1004 df1004 Apr 10, 2013 10:28 AM Flag

    ABT dividend policy

    Does anyone know ABT's dividend policy? After the spin off did they announce that ABT would be considering moving the dividend up or is always going to be this miniscule payout? Mature pharma companies usually pay dividends in the 3% plus range. What's up with ABT?

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    • ABT isn't a pharma company at all, after the ABBV spin-off. My guess is that they are going to use excess cash and income to buy small companies that extend their medical products lines. The dividend is likely to stay low for a long time, with just token increases annually until management figures out what the company wants to be when it grows up. The ABBV spin-off was done in response to demands to "unlock shareholder value." Is that working for everybody?

      Sentiment: Hold

    • Since spin off of ABBV Abbott is no longer considered a mature pharma company and can not be compared as such. However, the Abbott payout ratio is quite low compared to their cash flow and I would think that we should see upward increases in the Abbott Dividends hopefully over and above just earnings per share growth.

    • Total divi between ABT and ABBV is same (or a lttle more) than the "old" ABT. Hopefully, you are holding on to both stocks. I was long $39K of ABT, now I am long $22.2K of ABT and $26.2K of ABBV , all since the beginning of the year.. With that kind of price appreciation, who cares about a low yield on ABT?!

      Sentiment: Strong Buy

      • 1 Reply to back2back51
      • That's the golden question.

        ABBVIE is pretty well reliant on Humira for future earnings. So, in my opinion, while their flagship drug is patent protected, their earnings are fiarly predictable as long as they hold market share and no new competition is introduced from another pharma. Once Humira goes off patent, however........

        ABT itself is difficult to gauge, it's difficult to allocate the specific portion or earnings attributed to each of these two entities now that they've been separated. The nutritionals business isn't transparent at first glance, and as such, isn't easy to decipher from an earning perspective.

        Earnings season will give investors a little more insight into how these two separate companies fare financially. The CC's will be interesting. I myself think that given ABT's dividend history, dividend increases will come at a fairly steady rate.

        It's all wait-and-see at this point in time.

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