Investment in Abbott Laboratories in 2013: Return on Your $25,000 Capital Today
In the world of healthcare, two giants stand out - Abbott and its spin-off, AbbVie. Let's take a closer look at their performance and future prospects.
Abbott Labs, with its diverse product offerings, has seen a significant increase in revenue since the spin-off of AbbVie in 2013. The company's total revenue has more than doubled, reaching $11.3 billion in the second quarter of this year, marking an organic growth rate of 14.3% year over year.
However, the company's shares have taken a hit this year, with a 23% decline compared to the S&P 500's 17% drop. Despite this, Abbott remains a promising long-term investment due to its strong fundamentals.
On the other hand, AbbVie, the growth-oriented spin-off, has delivered impressive results since its inception. With a strong pharmaceutical portfolio, including blockbuster drugs like Humira, AbbVie has shown a remarkable average annual total return of about 12.8%. However, the loss of Humira's patent exclusivity has presented a challenge. The company has responded by successfully developing and commercializing new products like Rinvoq and Skyrizi, and by acquiring Allergan for product diversification.
AbbVie's dividend track record is also noteworthy. With over 50 consecutive years of dividend increases, AbbVie is considered a Dividend King. The current yield stands around 3.4-3.5%, and the dividend has grown by about 7.7% annually over the past five years.
Looking ahead, analysts expect AbbVie to generate record revenues near $60 billion in 2025 and to sustain mid-to-high single digit EPS growth. This growth is expected to be driven by AbbVie's diversified portfolio and pipeline.
In the Diagnostics segment, Abbott has seen a 244% growth in revenue since 2013. However, with the decrease in demand for COVID-19 testing products, diagnostics revenue is expected to fall. In 2021, Abbott generated $7.7 billion in revenue from COVID-19 testing products, accounting for 18% of its total sales.
The Nutritionals segment has seen a 23% growth in revenue since 2013, but it has been affected by recalls of infant formula products, causing a slowdown in growth. The Established Pharmaceuticals segment, on the other hand, has seen a 65% growth in revenue since 2013.
In conclusion, both Abbott and AbbVie continue to be strong players in the healthcare industry. AbbVie's strong dividend track record, solid growth prospects post-Humira, and diversified product base make it a good long-term investment option. Abbott, with its strong fundamentals and diverse product offerings, also presents a promising long-term buy. However, investors should consider the growth rate and whether it aligns with their risk and return preferences.
A $25,000 investment in Abbott's stock in 2013 would be worth more than $85,000 today, demonstrating the company's growth potential. Similarly, AbbVie, the growth-oriented spinoff of Abbott, has seen a 330% increase in value since inception, highlighting its impressive performance.
Finance and investing in the health-and-wellness sector show promising outcomes with Abbott Labs and its spin-off, AbbVie. Despite a recent decline in Abbott's share price, its strong fundamentals make it a possible long-term investment opportunity. AbbVie, known for its Dividend King status and impressive pharmaceutical portfolio, presents an appealing option due to its strong dividend record, post-Humira growth prospects, and diversified product base.
