Sure Dividend

Updated on July 7th, 2025 by Felix Martinez

Abbott Laboratories (ABT) has increased its dividend for over 53 consecutive years, and as a result, it is a member of the list of Dividend Kings.

The Dividend Kings are a select group of 55 stocks that have increased their dividends for at least 50 consecutive years. Given this longevity, we believe the Dividend Kings are among the highest-quality dividend growth stocks to buy and hold for the long term.

With this in mind, we created a full list of all 55 Dividend Kings. You can download the full list, along with important financial metrics such as dividend yields and price-to-earnings ratios, by clicking on the link below:

Click here to instantly download your free spreadsheet of all Dividend Kings now, along with important investing metrics.

Abbott is a diversified healthcare giant with a long runway of growth ahead of it. While the stock appears slightly overvalued, it can continue to be relied upon for annual dividend increases.

This article will provide an overview of the company’s business, its growth prospects, competitive advantages, and expected returns.

Business Overview

Abbott Laboratories is a healthcare stock with a market capitalization of $233 billion. Founded in 1888, it is headquartered in Lake Bluff, Illinois.

Abbott operates in four main segments: Nutritional Products, Established Pharmaceuticals, Diagnostics, and Medical Devices, and enjoys a leadership position across product segments.

Source: Investor Presentation

Growth Prospects

Looking ahead, Abbott Laboratories has two major growth prospects. The first is the aging population, both within the United States and internationally. In 2025, approximately 10% of the global population had reached the age of 65. This proportion is expected to reach 16% in 2050.

As people age, they tend to need more medical treatments, including many of the therapies that Abbott produces.

The company’s focus on emerging markets is the second broad tailwind that will benefit Abbott Laboratories. This is particularly true for its Branded Generic Pharmaceuticals segment.

Source: Investor Presentation

Abbott has a strong position in growth markets such as diagnostics. It is the market leader in point–of–care diagnostics and cardiovascular medical devices.

Lastly, share repurchases, which Abbott spends billions of dollars on annually, will boost earnings per share.

As a result, Abbott should be able to generate attractive long–term growth rates for both earnings per share and dividends. Overall, we expect Abbott to achieve 7% annual earnings-per-share growth over the next five years.

Competitive Advantages & Recession Performance

Abbott Laboratories’ first competitive advantage is its brand recognition among consumers for its medical products, particularly in the Nutrition segment.

Abbott Laboratories brands, led by noteworthy products like the Ensure meal replacement supplement, allow its sales to stand strong through even the worst economic recessions.

Abbott’s second competitive advantage component is its focus on research and development. The company’s R&D expense over the last five years is shown below:

• 2018 research & development expense: $2.3 billion
• 2019 research & development expense: $2.4 billion
• 2020 research & development expense: $2.4 billion
• 2021 research & development expense: $2.7 billion
• 2022 research & development expense: $2.8 billion
• 2023 research & development expense: $2.6 billion
• 2024 research & development expense: $2.8 billion

Abbott Laboratories’ investment in research and development demonstrates that the company is willing to play the long game, building out its product pipeline and enhancing its long-term business growth prospects.

As a large, diversified healthcare company, Abbott Laboratories is remarkably resilient in the face of economic downturns. The company actually increased its adjusted earnings per share during each year of the 2007-2009 financial crisis.

• 2007 earnings-per-share of $2.84
• 2008 earnings-per-share of $3.03 (6.7% increase)
• 2009 earnings-per-share of $3.72 (22.8% increase)
• 2010 earnings-per-share of $4.17 (12.1% increase)

As you can see, Abbott actually grew its earnings per share each year during the Great Recession.

We expect this recession-resistant Dividend King to perform similarly well during future economic downturns.

From a dividend perspective, Abbott’s dividend also appears very safe. The company has a projected dividend payout ratio of 46% for 2025. Abbott has raised its dividend for 53 consecutive years and has paid dividends to shareholders for nearly 100 consecutive years.

Valuation & Expected Total Returns

Based on an expected 2025 EPS of $5.15, Abbott stock has a price-to-earnings ratio of 25.9. This valuation is noticeably higher than its long-term average.

Our fair value price-to-earnings ratio is 22, meaning the stock appears to be slightly overvalued. A declining P/E multiple could result in a 3% reduction in annual returns over the next five years.

The other major component of Abbott Laboratories’ future total returns will be the company’s earnings-per-share growth. We expect the company to achieve 7% annual EPS growth.

Lastly, Abbott’s total returns will be boosted by the company’s dividend payments. Shares currently yield 1.7%.

Overall, Abbott Laboratories’ expected total returns could be composed of:

• 7% earnings-per-share growth
• 1.7% dividend yield
• -3% multiple reversion

Total expected annual returns are forecasted at 5.7% through 2030. Given the valuation decline, we now rate Abbott a hold.

Final Thoughts

Abbott Laboratories has a long history of growing its profits and dividends, thanks to its strong brand portfolio. While the company’s current valuation fractionally exceeds its long-term average, Abbott Laboratories remains a hold.

Additional Reading

The following databases of stocks contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors.

• • The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
  • The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
  • The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
  • The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
  • The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
  • The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
  • The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
  • The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
    Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
  • The Dividend Contenders List: 10-24 consecutive years of dividend increases.
  • The Dividend Challengers List: 5-9 consecutive years of dividend increases.
  • The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
  • The High ROIC Stocks List: The top 10 stocks with high returns on invested capital.
  • The High Beta Stocks List: The 100 stocks in the S&P 500 Index with the highest beta.
  • The Low Beta Stocks List: The 100 stocks in the S&P 500 Index with the lowest beta.
  • The Complete List of Russell 2000 Stocks
  • The Complete List of NASDAQ-100 Stocks