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ABBOTT LABORATORIES (NYSE:ABT) – A Quality Stock Worth Considering

By Mill Chart

Last update: Jun 12, 2025

ABBOTT LABORATORIES (NYSE:ABT) stands out as a strong candidate for quality investors, meeting key criteria for long-term growth, profitability, and financial health. The company’s fundamentals align well with the Caviar Cruise screening strategy, which focuses on identifying high-quality businesses with sustainable competitive advantages.

ABBOTT LABORATORIES stock chart

Key Strengths of ABT

  • Revenue and EBIT Growth: Over the past five years, ABT has delivered consistent revenue growth (5Y CAGR of 7.19%) and EBIT growth (5Y CAGR of 8.41%). This demonstrates the company’s ability to expand its operations while improving profitability.

  • High Return on Invested Capital (ROIC): ABT’s ROIC (excluding cash and goodwill) stands at 19.85%, well above the 15% threshold for quality stocks. This indicates efficient use of capital to generate profits.

  • Strong Profit Quality: With a five-year average profit quality of 99.60%, ABT converts nearly all its net income into free cash flow—a sign of financial efficiency and reliability.

  • Manageable Debt Levels: The company’s debt-to-free cash flow ratio is 1.99, meaning it could repay its debt in under two years using current cash flows. This reflects a conservative financial structure.

Fundamental Analysis Highlights

Abbott Laboratories holds a solid fundamental rating of 7 out of 10, with standout scores in profitability (8/10) and financial health (8/10). Key takeaways include:

  • Profitability: ABT outperforms most peers in return on assets (16.58%) and return on equity (27.66%). Margins have improved over time, reinforcing its competitive position.
  • Dividend Reliability: The company has raised its dividend for at least 10 consecutive years, with an 11.40% average annual growth rate.
  • Valuation: While not cheap, ABT trades at a reasonable valuation relative to industry peers, supported by strong earnings growth expectations.

For investors seeking stable, high-quality businesses, ABT presents a compelling case.

Our Caviar Cruise screener lists more quality stocks and is updated regularly.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.

ABBOTT LABORATORIES

NYSE:ABT (7/24/2025, 8:20:06 PM)

After market: 125.64 0 (0%)

125.64

-0.19 (-0.15%)



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