Abbott Laboratories
🇺🇸 ABT · NYSE/NASDAQ · US0028241000
Healthcare
USD 84.48 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
23.5
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: 84.48 ÷ 3.59 = 23.5
TTM period through: 2026-03-31
Forward P/E (estimated): 15.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 23.8
Yield (Fwd)
2.98%
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): 2.91%
Div. Growth (5Y CAGR)
10.4%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
14.5x
Latest quarter: 14.5x
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: 2026-03-31
Latest quarter (2026-03-31): 14.5x
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)
70.2%
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
12.3%
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
14.7x
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 premier global healthcare leader providing essential medical devices, diagnostics, and nutrition products. While a recent sell-off driven by acquisition costs and lawsuit news has improved its forward valuation, the current P/E multiple of 23.54 and sub-3% yield suggest limited upside for new value-focused entries. Existing shareholders should maintain positions given the exceptionally secure dividend and strong cash flow coverage, but new investors may want to wait for a better entry point.
Sector Context
Abbott Laboratories operates across pharmaceuticals, diagnostics, nutrition, and medical devices, providing essential healthcare products with highly predictable demand. In the context of dividend investing, diversified healthcare giants like Abbott often command premium valuations due to their defensive nature, robust free cash flow generation, and resilience across economic cycles.
Temporary Opportunity Identified
Recent stock price pullback driven by ongoing multi-million dollar litigation verdicts regarding infant formula, glucose monitor lawsuits, and near-term earnings dilution from the Exact Sciences acquisition.
📊 Strategy Analysis
- • Excellent dividend sustainability with strong Free Cash Flow coverage (1.8x) and a conservative cash flow payout ratio of 43.03%.
- • Defensive healthcare business model provides essential services across diversified segments, contributing to steady long-term revenue growth (+113% over 10 years).
- • Forward valuation has improved to a P/E of 15.41, moving closer to attractive value territory following the recent price correction.
⚠ What to Watch
- • Current TTM P/E of 23.54 remains significantly above the strategy's target range of 8-15x, indicating a premium valuation.
- • The 2.98% forward dividend yield (2.91% TTM) falls just below the strategy's minimum 3% threshold for optimal current income generation.
- • Ongoing litigation risks surrounding premature infant formula and glucose monitors present near-term headline pressure and potential financial liabilities.
📊 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: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.