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Income expert Carla Pasternak's debut issue of High-Yield
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investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
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The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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It
Pays to Seek Shelter in this Pharmaceutical
Firm |
Published:
March 24, 2008
Whenever economic uncertainty
roils the markets, investors often turn to the defensive
healthcare sector. After all, people get sick and need medical
treatment regardless of economic conditions, which makes a company like
Abbott Laboratories (NYSE: ABT, $55.66)
somewhat resistant to a downturn.
Abbott is a leading pharmaceutical provider, riding the success
of blockbuster products like Humira -- a drug used to treat
autoimmune disorders such as rheumatoid arthritis and Crohn's
Disease. The firm is also a major supplier of diet shakes and
other nutritional products, as well as diagnostic equipment for
blood banks, hospital labs and other testing and screening
facilities. Finally, the company also manufactures stents and
other instruments to promote vascular health.
Combined, Abbott took in more than $25 billion in revenues from
over 130 different countries last year and generated operating
cash flows in excess of $5 billion. And at the moment, each of
the firm's business segments is carrying its own weight.
Pharmaceutical revenues (which account for over half of the
total) were up nearly +19% last quarter, thanks in large part to
surging sales of Humira (+54%) and HIV drug Kaletra (+25%).
Meanwhile, the release of Abbott's new Xience drug-eluting stent
pushed international sales in the vascular division up +34%.
Finally, diagnostic equipment and nutritional products (which
include popular children's brands like Pedialyte and Similac)
both registered sharp double-digit gains as well.
Looking ahead, all but one of Abbott's drugs will enjoy patent
protection throughout 2008, and there are plenty of potential
growth drivers on the horizon. For example, Humira has just been
approved to treat psoriasis (which afflicts 125 million people
globally), and sales of that one drug could reach $4 billion
this year. And with a huge research and development (R&D) budget
of $2.3 billion annually, the company has a number of other
promising drugs in the late stages of clinical trials.
Overall, Abbott's well-rounded product line addresses every
stage of the healthcare process, with products ranging from
prevention to diagnosis to treatment. And that balance has
helped push earnings steadily higher over the years, from $1.71
per share in 2001 to an expected $3.20 per share in 2008 (+87%). It's
also worth noting that the firm hasn't missed a dividend payment
for 336 consecutive quarters dating back to 1924 -- and those
distributions have been raised every year for the past three
decades.
And the stock has held up relatively well in the face of a
withering market sell-off. With steadily rising dividend payouts and
a near recession-proof revenue stream, ABT is a solid choice
for defensive income-oriented value investors.
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Nathan Slaughter
Editor
Half-Priced Stocks, The ETF Authority
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