{"id":88830,"date":"2023-11-25T22:14:13","date_gmt":"2023-11-26T03:14:13","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/abbott-laboratories-one-of-the-safest-dividend-growth-stocks-on-the-market-nyseabt\/"},"modified":"2023-11-25T22:14:18","modified_gmt":"2023-11-26T03:14:18","slug":"abbott-laboratories-one-of-the-safest-dividend-growth-stocks-on-the-market-nyseabt","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=88830","title":{"rendered":"Abbott Laboratories: One Of The Safest Dividend Growth Stocks On The Market (NYSE:ABT)"},"content":{"rendered":"
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Introduction<\/h2>\n

We’re living in challenging times. While the situation could be a lot worse, the market is dealing with sticky inflation, elevated rates, and weakening economic growth.<\/p>\n

For example, the latest Michigan consumer sentiment survey showed that long-term inflation expectations have hit the highest level since 2011, pressuring consumer spending plans.<\/span><\/p>\n

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Bloomberg<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

On top of that, as we can see in the chart below, the Leading Economic Index remains at subdued levels, indicating a high probability of a recession in 2024.<\/p>\n

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Wells Fargo<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

To make things worse, we’re entering a period with a lot of debt maturities (both government and corporate), which could elevate risks unless rates come down soon.<\/p>\n

The percentage of bonds that will mature within the next two years hasn’t been this high since 2008. Even worse, most of these bonds have lower yields than current yields, meaning refinancing will be much more expensive.<\/span><\/p>\n

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Bloomberg, Game of Trades<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

But wait, there’s more.<\/p>\n

We aren’t even in a recession, and we already see that 40% of Russell 2000 companies are losing money. This is comparable to the peak of the Great Financial Crisis.<\/p>\n

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Apollo Global Management<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Don’t get me wrong, I’m not saying this to scare anyone.<\/p>\n

I have zero short positions. I have not been a net seller of any stocks, and I’m not planning on investing less in the future.<\/p>\n

I’m bringing this up to highlight why I have become way more careful.<\/p>\n

As we could be in a prolonged period of elevated rates, higher interest payments, and elevated default risks, I’m only buying top-tier companies that have a history of surviving recessions and a high likelihood of doing well in my hypothetical scenario.<\/p>\n

This brings me to the star of this article, Abbott Laboratories (NYSE:ABT<\/span>)<\/strong>.<\/p>\n

Abbott is a well-diversified healthcare company that produces medical devices and related products. It has an AA- credit rating, which is one of the best ratings in the world, and more than 50 consecutive annual dividend hikes, making it a special pick in that area as well.<\/p>\n

In this article, we’ll discuss all of this and more as I explain why ABT is such a sleep-well-at-night pick.<\/p>\n

So, let’s get to it!<\/p>\n

Abbott Is Where It’s At<\/h2>\n

My most recent article on Abbott was written on July 31, when I wrote an article titled Abbott: This Dividend King Is Ready For Takeoff<\/em>.<\/p>\n

In that article, I highlighted some of the reasons why investments in healthcare (healthcare capabilities) are so important.<\/p>\n

For example, earlier this year, NPR published an article titled Live free and die? The sad state of U.S. life expectancy<\/em>. In that article, it used the chart that can be seen below.<\/p>\n

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Peterson-KFF Health System Tracker<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

As we (in general) get older and new healthcare threats emerge, it becomes key to address issues like heart disease, cancer, and chronic disease (among others) as effectively and efficiently as possible.<\/p>\n

After all, costs are a huge factor!<\/p>\n

My healthcare payments in 2024 will likely rise by 18%, as all of these issues are a financial burden on “the system.”<\/p>\n

Having said that, Abbott is well-diversified and in a great spot to help solve the healthcare challenges of the future.<\/p>\n

Roughly 38% of its revenue comes from diagnostics, followed by medical devices, nutritional products, and pharmaceutical products.<\/p>\n

<\/span><\/p>\n\n\n\n\n\n\n\n\n
USD in Million<\/th>\n2021<\/th>\nWeight<\/th>\n2022<\/th>\nWeight<\/th>\n<\/tr>\n<\/thead>\n
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Diagnostic Products<\/p>\n<\/td>\n

15,644<\/td>\n36.3 %<\/td>\n16,584<\/td>\n38.0 %<\/td>\n<\/tr>\n
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Medical Devices<\/p>\n<\/td>\n

14,367<\/td>\n33.4 %<\/td>\n14,687<\/td>\n33.6 %<\/td>\n<\/tr>\n
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Nutritional Products<\/p>\n<\/td>\n

8,294<\/td>\n19.3 %<\/td>\n7,459<\/td>\n17.1 %<\/td>\n<\/tr>\n
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Established Pharmaceutical Products<\/p>\n<\/td>\n

4,718<\/td>\n11.0 %<\/td>\n4,912<\/td>\n11.3 %<\/td>\n<\/tr>\n
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Other<\/p>\n<\/td>\n

52<\/td>\n0.1 %<\/td>\n11<\/td>\n0.0 %<\/td>\n<\/tr>\n<\/table>\n

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