Monday, November 29, 2010

Obama Wants Federal Pay Freeze

President Obama is calling for a two year federal employee pay freeze, which is estimated to save the country 60 billion dollars over the next decade.  60 billion dollars is not going to save the US from our future debt problems, but what is significant here is the precedent that is being set. 

Friday, November 26, 2010

Consolidated Edison Dividend Stock Analysis

Consolidated Edison (NYSE: ED) is the holding company of three related businesses. Consolidated Edison Company of New York, which supplies electricity, natural gas, and steam to customers in New York City and WestChester...

Wednesday, November 24, 2010

Bear With Me...

I wanted to apologize for the lack of posts, as I've had a lot on my plate lately.  First...

Sunday, November 14, 2010

Stock Splits and You

Companies often initiate a stock split when the stock price has had a significant run-up.  By splitting the stock, a company can increase liquidity, while not altering their market cap or diluting it's shares. The object is usually to make the stock more affordable to small-time investors and encourage trading.

In this post we'll see how over time stock splits can substantially increase your wealth. 

Wednesday, November 10, 2010

Cintas Dividend Stock Analysis

Cintas (NASDAQ: CTAS) provides highly specialized products and services to businesses of all types throughout the United States, Latin America, Europe and Asia.

The Company operates in four segments: (1) Rental Uniforms and Ancillary Products (2) Uniform Direct Sales (3) First Aid, Safety and Fire Protection Services, and (4) Document Management Services. As of May 31, 2010, the Company provided products and services to approximately 800,000 businesses.

Monday, November 8, 2010

Sonoco Dividend Stock Analysis

Sonoco Products Company (NYSE: SON) is a manufacturer of industrial and consumer packaging products and a provider of packaging services with 312 locations in 35 countries. 

The company was founded in 1899 and operates in six segments: Global Rigid, Global Flexible, Global Services, Global Plastics, Industrial Converted, and Primary Materials. The Company serves two markets: consumer and industrial.  It provides packaging solutions to many of the world's most recognized brands.

Sunday, November 7, 2010

3M Dividend Stock Analysis

3M Company (NYSE: MMM) is a diversified technology company with a global presence in industrial and transportation; health care; consumer and office; safety, security and protection services; display and graphics, and electro and communications. 

3M operates in six business segments: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection Services; Display and Graphics; and Electro and Communications.

Tuesday, November 2, 2010

Abbott Labs Dividend Stock Analysis


Abbott labs (NYSE: ABT) is a global, diversified healthcare company.  The company divides its operations into three categories; pharmacuticals, nutritional products, and medical devices and diagnostics.  It employs over 80,000 people, and markets its products in more than 130 countries. 
The company has been around for over 120 years, and has increased it’s dividend every year for the past 37.  It has paid 344 consecutive quarters of dividends since 1924.

Pharmaceuticals account for the majority of sales, while the rest of the categories are about equally split for the remaining sales.  About half the sales are in the US, the other half are from the rest of the world.

Abbott Labs holds many top spots, including drugs like Humira (let’s not exam any patent ending issues at the moment) and Synthroid, as well as nutritional supplements like Myoplex and Similac, they are the worlds leading producer of coronary stents, and are the #1 blood screening company.

Stock Analysis

Abbott Labs has tried hard to return value to it’s shareholders, especially in this “lost decade” the US has been in since 2000.  The stock price has fluctuated by stayed nearby $50 for most of this time, hitting a high of 61.09 in 2007 and a low of 29.80 in 2001.  Even during the recession we find ourselves in, Abbott has done a good job increasing numbers across the board, and staying in positive cash flow. 


Dividend Growth
10 year
5 year
1 year

Payout Ratios
10 yr Avg.

Abbott Labs has been growing dividends at an accelerating pace, reaching into the low double-digits.  The dividends are well covered by cashflow, and a 37 year track record of increases.

Income Statement

Revenue Growth
10 year
5 year
1 year

EPS Growth
10 year
5 year
1 year

ABT has been buying back shares with 1566 (in millions) in 2000 and 1552 by 2010.  

Cash Flow

Free Cash Flow
10 year
5 year

FCF Per Share
10 year
5 year
1 year

Margins have decreased slightly over the years, but they are still in an acceptable range.

Balance Sheet


Balance Sheet Ratios
10 yr Avg.
Current Ratio
Lg T Debt / Equity
Tot Debt / Equity
Debt / Total Capital
Cash Return / Tot Capital

Shareholder equity has increased by 11.4% annually over the past decade.

Stock Price

Current Price
Est Forward P/E
Div Yield


Overall, I feel that Abbott Labs is a good buy at this price.  The stock is trading below my target p/e of 15 (historical stock market average), and is yielding over 3%.  The dividend is covered, and has grown for an extended period of time at a decent clip, which has been accelerating.

Healthcare will always be big business, and has been one of the best returning sectors in the past 50 years.  Abbott labs has its hand in a large international market, including all the emerging markets with a growing middle class that will soon want access to the healthcare more developed countries have come to depend on.  ABT is a huge company, and economies of scale would make it hard for anyone to step in, especially since medical technology takes a huge research budget, and pharmaceuticals need years of research and testing before they make it to market.  While patents do expire, drugs are cash cows for the years they are on patent.

I do not currently hold any stock in ABT, but if it stays in this price range and I have the funds I will initiate a position.  You can see all of my holdings under the Current Portfolio Holdings Tab.