The 10 Most Recession-Proof Dividend Aristocrats

#3 – Abbott Laboratories

• 2007 through 2009 total return of 19.7% (versus -15.9% for the S&P 500)
• 2007 through 2009 maximum drawdown of 28.9% (versus 55.2% for the S&P 500)

Abbott Laboratories (NYSE:ABT) manufactures and sells nutrition products, medical devices and diagnostic equipment, and pharmaceuticals. Abbott Laboratories is the #1 adult nutrition company in the world, and the #1 pediatric nutrition company in the United States thanks to its Similac, Pedialyte, and Ensure brands.

Abbott Laboratories is a global business; it generates about 30% of sales in the United States and 70% internationally. The company operates in 4 segments:

• Diagnostics generated 23% of total revenue
• Nutrition generated 33% of total revenue
• Medical Devices generated 25% of total revenue
• Branded Generic Pharmaceuticals generated 19% of total revenue

In 2012 Abbott Laboratories (NYSE:ABT) spun-off its biopharmaceutical business AbbVie (ABBV), so an apples-to-apples comparison of results over the Great Recession versus today is not possible.

With that said, Abbott Laboratories did grow its earnings-per-share each year through the Great Recession. Abbott Laboratories benefits from the same recession-resistance afforded by the health care industry that BDX does (discussed above).

Abbott Laboratories continues to grow rapidly. The company expects constant-currency earnings-per-share growth of 13% to 18% in fiscal 2015. Abbott Laboratories (NYSE:ABT) has positioned itself to take advantage of emerging market growth – all of its generic pharmaceutical segment revenue is now generated in developing and emerging markets.

Significant exposure to emerging markets may slow Abbott Laboratories’ growth more than developed-market-centered health care businesses if we do enter into another global recession. Still, the company has proven it can withstand the effects of recessions and pay shareholders increasing dividends year-after-year. Billionaires George Soros, Cliff Asness, and Ken Griffin have large positions in the stock.