Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Abbott Laboratories (ABT), AbbVie Inc (ABBV): This Healthcare Giant is Definitely a Great Buy Now

Page 1 of 2

I am always excited when a company plans to return more cash to its shareholders in both dividends and share buybacks. Recently, Abbott Laboratories (NYSE:ABT) declared a quarterly dividend of 14 cents per share. Moreover, the company’s board has also authorized a $3 billion share buyback program to replace a $5 billion buyback program that was recently completed. Is Abbott Laboratories (NYSE:ABT) a buy after a recent announcement of both a dividend and a share buyback plan? Let’s find out.

Abbott Laboratories (NYSE:ABT)

Expanding their reach in emerging markets

Investors might be excited about Abbott Laboratories (NYSE:ABT) due to their strong brand portfolio with leading positions in several business segments, including Nutrition, Diagnosis, Medical Devices and Established Pharmaceuticals. According to the company, it held the number one position in many fields such as Blood Screening, Immunoassay Diagnostics, WW Adult Nutrition, U.S. Pediatric Nutrition and Lasik medical devices. Interestingly, around 40% of its revenue comes from the emerging markets, while the U.S. market accounted for only 30% of its total sales. Abbott Laboratories (NYSE:ABT) intends to increase its presence in emerging markets, which were expected to account for 50% of the company’s revenue by 2015.

Spinning off AbbVie Inc (NYSE:ABBV) makes Abbott Laboratories (NYSE:ABT) looks good

At the end of 2012, Abbott Laboratories (NYSE:ABT) spun off a research-based business, AbbVie Inc (NYSE:ABBV), from the company. AbbVie Inc (NYSE:ABBV) is considered a developer of advanced therapies to treat complex diseases such as HIV and Parkinson’s disease. The spinoff of AbbVie Inc (NYSE:ABBV) out of Abbott gives investors more options to choose between Abbott with strong established portfolios or AbbVie Inc (NYSE:ABBV), which focuses mainly on drug manufacturing. AbbVie Inc (NYSE:ABBV)’s main product is HUMIRA, generating nearly $9.3 billion in revenue, accounting for more than half of its total revenue. After the spinoff, Abbott had a much stronger balance sheet, while AbbVie uses a lot of leverage in its operations.

As of March 2013, AbbVie recorded nearly $3 billion in equity, around $6.5 billion in cash and short-term investments, and more than $15 billion in debt and lease obligations. Moreover, AbbVie had a huge goodwill and intangible assets of more than $8.1 billion. Abbott has a much more conservative capital structure. It had nearly $22.6 billion in equity, $8.5 billion in cash and short-term investments, and only more than $7 billion in total debt. Abbott had only $6.1 billion in pensions and other benefits. The goodwill and intangible assets came in at only $8 billion. Consequently, while AbbVie had a negative tangible book value of $(5.1) billion, the tangible book value of Abbott was around $14.6 billion.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!