Definitive Analysis
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Abbott Laboratories (ABT)

Company Dividend Discount ModelIndustry: Medical - DevicesSector: Healthcare

Valuation Snapshot

Stable Growth$187.53 - $497.47$286.76
Multi-Stage$129.06 - $140.97$134.91
Blended Fair Value$210.83
Current Price$133.94
Upside57.41%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.06%11.07%2.192.031.891.831.461.301.131.060.880.83
YoY Growth--7.87%7.46%3.34%25.08%12.78%14.99%6.76%20.14%6.65%7.53%
Dividend Yield--1.65%1.81%1.87%1.55%1.22%1.65%1.42%1.77%1.98%1.97%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)13,977.00
(-) Cash Dividends Paid (M)4,044.00
(=) Cash Retained (M)9,933.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2,795.401,747.131,048.28
Cash Retained (M)9,933.009,933.009,933.00
(-) Cash Required (M)-2,795.40-1,747.13-1,048.28
(=) Excess Retained (M)7,137.608,185.888,884.73
(/) Shares Outstanding (M)1,748.311,748.311,748.31
(=) Excess Retained per Share4.084.685.08
LTM Dividend per Share2.312.312.31
(+) Excess Retained per Share4.084.685.08
(=) Adjusted Dividend6.407.007.40
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$187.53$286.76$497.47
Upside / Downside40.01%114.09%271.42%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)13,977.0014,885.5115,853.0616,883.5117,980.9419,149.7019,724.19
Payout Ratio28.93%41.15%53.36%65.57%77.79%90.00%92.50%
Projected Dividends (M)4,044.006,124.888,459.1911,071.0813,986.7717,234.7318,244.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)5,561.395,614.115,666.82
Year 2 PV (M)6,974.307,107.147,241.24
Year 3 PV (M)8,287.978,525.888,768.31
Year 4 PV (M)9,507.409,873.0310,249.10
Year 5 PV (M)10,637.3811,151.1711,684.63
PV of Terminal Value (M)184,664.69193,584.06202,844.80
Equity Value (M)225,633.13235,855.40246,454.90
Shares Outstanding (M)1,748.311,748.311,748.31
Fair Value$129.06$134.91$140.97
Upside / Downside-3.64%0.72%5.25%

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