Portfolio New Addition: Abbott Laboratories

The second company in the healthcare sector that I have invested in. Although the reasoning to hold the shares of Abbott Laboratories (NYSE: ABT) is not strong, I had to choose the better ones from this sector as a means to diversify in my investments. A look at the rationale behind investing in Abbott and a reminder to why I should continue holding on to it.

Abbott sign | Investor Monkey

Abbott Laboratories logo | Investor MonkeyAbbott Laboratories (NYSE: ABT) is engaged in the discovery, development, manufacture and sale of a range of health care products. Abbott operates in four business segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Vascular Products. The Established Pharmaceutical Products segment includes the international sales of a line of branded generic pharmaceutical products. The Diagnostic Products segment includes the sales of a line of adult and pediatric nutritional products. The Nutritional Products includes the sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites. The Vascular Products includes the sales of coronary, endovascular, structural heart, vessel closure and other medical device products.

Rationale for Addition to Portfolio

Abbott has been growing their dividends at an average of 8.3% annually over the past five years. With a payout of 60.4% for the fiscal year 2014, Abbott’s payout ratio is still within the range of what I am comfortable with.

Healthcare sector was one of the sectors that I have chosen to invest in and selection of a company to invest in the healthcare sector was tough as most of the companies could not meet the selection criteria for the portfolio. Abbott proves itself as one of the better ones within the sector as the dividend payout is more stable as compared to its peers of the healthcare sector.

Transaction Details

Date September 16, 2015
Shares 11
Price 43.78
Yield (TTM)* 2.15%
* as at time of purchase

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