7. Abbott Laboratories (NYSE:ABT)
Number of Hedge Fund Holders: 69
Abbott Laboratories (NYSE:ABT) is an Illinois-based medical device company that also specializes in various healthcare products and services. The company currently offers a quarterly dividend of $0.55 per share and has a dividend yield of 1.96%, as of August 19. It is one of the best dividend aristocrat stocks on our list as the company has paid dividends consistently for 402 quarters and also raised its payouts for 52 consecutive years.
Abbott Laboratories (NYSE:ABT) greatly benefits from its diversified business model, which offers multiple growth opportunities and allows it to generate revenue from various sources. In the second quarter of 2024, the company reported $10.38 billion in revenue, reflecting a 4% increase compared to the same period last year. However, its diagnostic segment faced challenges during the quarter, with revenues falling by 5.3% to $2.2 billion compared to the previous year. Analysts remain optimistic about the company’s prospects for the future. Diamond Hill Capital, in its Q2 2024 investor letter, also highlighted the company’s growth prospects. Here is what the firm has to say:
“Abbott Laboratories (NYSE:ABT) is a diversified health care company with an extensive portfolio that spans medical devices, pharmaceuticals, nutritionals and diagnostics. With a substantial portion of its revenues generated internationally, emerging markets contribute about 40% of overall sales. We have always liked Abbott’s diverse mix of businesses and its fundamental growth prospects. The management team has consistently demonstrated skill in capital allocation, highlighted by strategic divestitures such as the European generic business in 2014, and significant acquisitions like St. Jude in 2016.”
While the healthcare sector is generally resilient and can perform well through various market conditions, companies face risks related to research and development. New innovations might lead to legal challenges if their products do not meet market expectations, and high legal costs can affect a company’s cash flow and its ability to invest in growth. For Abbott Laboratories (NYSE:ABT), however, the financial outlook remains positive. The company boasts a strong cash position, with a trailing twelve-month operating cash flow of $7.9 billion and a levered free cash flow of $5.39 billion. As of the latest quarter, Abbott had $7.22 billion in cash reserves, supporting its ability to maintain regular dividend payments in the future.
Abbott Laboratories (NYSE:ABT) remained popular among elite funds at the end of Q2 2024 as hedge fund positions grew to 69, from 62 a quarter earlier, as per Insider Monkey’s database. The stakes held by these hedge funds have a total value of over $3.5 billion. With over 10.5 million shares, Fisher Asset Management was the company’s leading stakeholder in Q2.
