ABBOTT LABORATORIES (ABT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ABT - US0028241000 - Common Stock
108.77 USD
+1.35 (+1.26%)
108.7 USD
-0.07 (-0.06%)
We assign a fundamental rating of 6 out of 10 to ABT. ABT was compared to 184 industry peers in the Health Care Equipment & Supplies industry. While ABT has a great profitability rating, there are some minor concerns on its financial health. ABT has a correct valuation and a medium growth rate. Finally ABT also has an excellent dividend rating. These ratings would make ABT suitable for dividend investing!
1. Profitability
1.1 Basic Checks
- In the past year ABT was profitable.
- In the past year ABT had a positive cash flow from operations.
- In the past 5 years ABT has always been profitable.
- Of the past 5 years ABT 4 years had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 16.60%, ABT belongs to the top of the industry, outperforming 97.28% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 27.43%, ABT belongs to the top of the industry, outperforming 98.37% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 8.88%, ABT belongs to the top of the industry, outperforming 88.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.6% | ||
| ROE | 27.43% | ||
| ROIC | 8.88% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- Looking at the Profit Margin, with a value of 31.88%, ABT belongs to the top of the industry, outperforming 98.37% of the companies in the same industry.
- ABT's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 18.29%, ABT belongs to the top of the industry, outperforming 89.67% of the companies in the same industry.
- In the last couple of years the Operating Margin of ABT has grown nicely.
- Looking at the Gross Margin, with a value of 56.19%, ABT is in line with its industry, outperforming 54.89% of the companies in the same industry.
- In the last couple of years the Gross Margin of ABT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.29% | ||
| PM (TTM) | 31.88% | ||
| GM | 56.19% |
OM growth 3Y-0.87%
OM growth 5Y4.37%
PM growth 3Y-2.51%
PM growth 5Y2.53%
GM growth 3Y0.26%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ABT is destroying value.
- ABT has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- ABT has an Altman-Z score of 5.17. This indicates that ABT is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 5.17, ABT is in the better half of the industry, outperforming 77.17% of the companies in the same industry.
- ABT has a debt to FCF ratio of 1.87. This is a very positive value and a sign of high solvency as it would only need 1.87 years to pay back of all of its debts.
- ABT has a better Debt to FCF ratio (1.87) than 87.50% of its industry peers.
- A Debt/Equity ratio of 0.23 indicates that ABT is not too dependend on debt financing.
- ABT's Debt to Equity ratio of 0.23 is in line compared to the rest of the industry. ABT outperforms 55.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.87 | ||
| Altman-Z | 5.17 |
ROIC/WACC0.9
WACC9.92%
2.3 Liquidity
- ABT has a Current Ratio of 1.70. This is a normal value and indicates that ABT is financially healthy and should not expect problems in meeting its short term obligations.
- ABT has a worse Current ratio (1.70) than 67.93% of its industry peers.
- ABT has a Quick Ratio of 1.24. This is a normal value and indicates that ABT is financially healthy and should not expect problems in meeting its short term obligations.
- The Quick ratio of ABT (1.24) is worse than 65.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
- ABT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.28%, which is quite good.
- The Earnings Per Share has been growing slightly by 7.13% on average over the past years.
- Looking at the last year, ABT shows a small growth in Revenue. The Revenue has grown by 5.67% in the last year.
- Measured over the past years, ABT shows a small growth in Revenue. The Revenue has been growing by 5.08% on average per year.
EPS 1Y (TTM)10.28%
EPS 3Y-1.2%
EPS 5Y7.13%
EPS Q2Q%11.94%
Revenue 1Y (TTM)5.67%
Revenue growth 3Y0.51%
Revenue growth 5Y5.08%
Sales Q2Q%4.42%
3.2 Future
- Based on estimates for the next years, ABT will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.18% on average per year.
- ABT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.15% yearly.
EPS Next Y11.35%
EPS Next 2Y10.76%
EPS Next 3Y9.84%
EPS Next 5Y10.18%
Revenue Next Year7.19%
Revenue Next 2Y7.26%
Revenue Next 3Y7.21%
Revenue Next 5Y7.15%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 21.12, which indicates a rather expensive current valuation of ABT.
- 82.07% of the companies in the same industry are more expensive than ABT, based on the Price/Earnings ratio.
- ABT is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- ABT is valuated rather expensively with a Price/Forward Earnings ratio of 18.97.
- Based on the Price/Forward Earnings ratio, ABT is valued cheaper than 82.61% of the companies in the same industry.
- ABT's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.12 | ||
| Fwd PE | 18.97 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ABT indicates a rather cheap valuation: ABT is cheaper than 80.43% of the companies listed in the same industry.
- 81.52% of the companies in the same industry are more expensive than ABT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.34 | ||
| EV/EBITDA | 17.2 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ABT does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of ABT may justify a higher PE ratio.
PEG (NY)1.86
PEG (5Y)2.96
EPS Next 2Y10.76%
EPS Next 3Y9.84%
5. Dividend
5.1 Amount
- ABT has a Yearly Dividend Yield of 2.35%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 0.20, ABT pays a better dividend. On top of this ABT pays more dividend than 97.83% of the companies listed in the same industry.
- ABT's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.35% |
5.2 History
- On average, the dividend of ABT grows each year by 11.40%, which is quite nice.
- ABT has been paying a dividend for at least 10 years, so it has a reliable track record.
- ABT has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.4%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- ABT pays out 28.93% of its income as dividend. This is a sustainable payout ratio.
- ABT's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.93%
EPS Next 2Y10.76%
EPS Next 3Y9.84%
ABBOTT LABORATORIES / ABT FAQ
What is the fundamental rating for ABT stock?
ChartMill assigns a fundamental rating of 6 / 10 to ABT.
What is the valuation status of ABBOTT LABORATORIES (ABT) stock?
ChartMill assigns a valuation rating of 6 / 10 to ABBOTT LABORATORIES (ABT). This can be considered as Fairly Valued.
What is the profitability of ABT stock?
ABBOTT LABORATORIES (ABT) has a profitability rating of 7 / 10.
What are the PE and PB ratios of ABBOTT LABORATORIES (ABT) stock?
The Price/Earnings (PE) ratio for ABBOTT LABORATORIES (ABT) is 21.12 and the Price/Book (PB) ratio is 3.71.
Can you provide the expected EPS growth for ABT stock?
The Earnings per Share (EPS) of ABBOTT LABORATORIES (ABT) is expected to grow by 11.35% in the next year.