Abbott Laboratories (
) shows many of the classic traits you'd want to see in a
high-quality income stock: a broad array of enviable niches in
its industry, a solid but unspectacular stock uptrend and a
history of rising dividends.
Big-cap Abbott Labs produces generic drugs, research-based
drugs, diagnostic systems and nutrients.
Abbott pays an annualized dividend of $2.04 a share, for a
3.1% yield. Abbot has upped its dividend every year since at
least 1990, when the company paid just 20.3 cents per share.
Abbott's chart shows years of tight trading and a slow but
steady incline. Some bases appear along the way, but the best
guide the past few years has been the stock's 10-week moving
Abbott Labs' Q2 report, released July 18, showed results that
pretty much met consensus estimates: Earnings of $1.23 a share
beat the Street's consensus estimate by a penny, and reflected a
10% gain from a year ago.
Revenue advanced just 2% -- its weakest quarterly improvement
in three years and fractionally shy of expectations.
Abbott confirmed its previous full-year EPS guidance of $5 to
$5.10, tracking with the Street's consensus of $5.04, and up 8%
from 2011's bottom line.
Abbott said in October that it will split into two publicly
traded companies by the end of 2012.
One company will produce medical devices, generic drugs,
diagnostic equipment and nutritional products. This company, with
$22 billion a year in sales, will retain the Abbott Laboratories
The other company, with annual sales of $18 billion, will
contain Abbott's research-based drug activities. It will focus on
crucial areas such as multiple sclerosis, HIV treatments and
Abbott Labs gapped up Oct. 19, the day investors heard the
split-up plans. The stock ended its high-volume session -- which
coincided with a quarterly report -- near the lower end of a wide
The stock later formed a base-on-base pattern. Shortly after
Abbott Labs broke out from the base, on Feb. 28, it embarked on
an uptrend that was noticeably steeper than that seen in its