Abbott Laboratories
🇺🇸 ABT · NYSE/NASDAQ · US0028241000
Healthcare
USD 102.87 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
27.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 102.87 ÷ 3.73 = 27.6
TTM period through: 2025-12-31
Forward P/E (estimated): 18.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 27.7
Yield (Fwd)
2.45%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.34%
Net Debt/EBITDA (TTM)
0.6x
Latest quarter: 2.3x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 2.3x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
67.5%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 63.1%
Cash Flow Payout (TTM): 43.0%
FCF Coverage (TTM): 1.80x
ROE
13.0%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
15.2x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Abbott Laboratories is a high-quality global healthcare leader with a fortress balance sheet and a highly secure, growing dividend backed by an entrenched competitive moat. While the underlying business fundamentals are exceptional and the recent $21 billion acquisition of Exact Sciences expands its long-term oncology footprint, current valuation around $103 (P/E 27.5) offers limited upside and the 2.34% yield falls short of our income targets. Existing shareholders should maintain positions given the robust dividend coverage, but new investors may want to wait for a better entry point that provides a higher starting yield and improved margin of safety.
Sector Context
Abbott Laboratories is a diversified global healthcare company that develops, manufactures, and sells medical devices, diagnostics, branded generic medicines, and nutritional products. In the context of dividend investing, healthcare giants like Abbott offer essential, non-cyclical services that generate highly predictable cash flows, though they typically command premium valuation multiples compared to traditional utilities or telecom companies due to their long-term growth characteristics and patent-protected portfolios.
Temporary Opportunity Identified
Near-term margin compression and revenue headwinds due to the normalization of post-COVID testing demand, legacy baby formula litigation fines, and immediate integration focus following the large Exact Sciences acquisition.
📊 Strategy Analysis
- • Fortress balance sheet with Net Debt/EBITDA of 0.57x and Debt/Equity of 0.29x, providing immense financial flexibility for strategic investments and shareholder returns.
- • Highly secure dividend backed by strong free cash flow generation, boasting a sustainable FCF payout ratio of 43% and a 9.8% dividend growth CAGR over the last decade.
- • Entrenched competitive moat in the healthcare sector, further bolstered by the recent strategic $21 billion acquisition of Exact Sciences to expand its oncology diagnostics portfolio.
⚠ What to Watch
- • Current valuation is heavily stretched with a TTM P/E of 27.55x, significantly exceeding the strategy's preferred target range of 8-15x.
- • The 2.34% dividend yield falls below the minimum 3% threshold typically sought for optimal current income generation.
- • Recent margin contraction, with net margins dropping to 14.7% versus the 5-year average of 18.6%, largely driven by the post-COVID diagnostics slowdown and near-term integration costs.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.