ABT Abbott Laboratories
revisited.
ABBOTT Labs has been an income
machine. When I first profiled ABT as my
second dividend machine since publishing this income investing blog, the stock
price was $48.40, the dividend was $.44 per quarter for an annualized yield of
3.65%.
ABT Abbott
Laboratories. 2011 Dividend Machine
profiled on December 19, 2010 http://www.themoneymadam.com/2010/12/dividend-machine-abt.html
ABBOTT, symbol ABT, showed up
again as a 2012 dividend machine. The
stock price was up to $60.19; the dividend increased 16% to $.51 per quarter
for an annualized yield of 3.39%.
ABT Abbott Laboratories. 2012 Dividend Machine profiled on March 22,
2012 http://www.themoneymadam.com/2012/03/abbott-laboratories-abt.html
ABT provided even more income
through a covered call; A November 2012
strike price of $67.50 fetched nearly a dollar a share of income.
ABT Abbott
Laboratories. Covered Call Income http://www.themoneymadam.com/2012/10/normal-0-false-false-false-en-us-x-none.html
ABBOTT has split into two
companies. Now ABBOTT is ABT and ABBV
called AbbVie. For every share of ABT
you owned at the time of the split, you would have received an additional share
of the new company ABBV.
Is ABT still a dividend machine? Let’s look at the dividend machine
fundamentals of ABT. ABT shares closed
at $33.07 on Jan 4, 2013. The company
has declared a quarterly dividend of $.14 per share for a yield of 1.7%. On the yield basis alone, ABT is no longer a
dividend machine.
ABBV, the spin off, is expected to declare a dividend of $.40 per
share. Trading at $34.39, that yield
would be 4.65%. However, since ABBV is a
new company it does not meet the dividend machine criteria of increasing the
dividend every year for five years.
What should I do? I am going to sell my ABT either through an
outright sell, or a covered call that is almost certain to be taken. I get the immediate income and a significant
capital gain. However, I am going to
hold onto ABBV unless the income does materialize as expected. I could hold both. The combined income is greater than the old
ABT and the value of $67.46 is well above either buy ($48.40 and $60.19) but I
think I can get more than 1.7% from another dividend machine.
I’ll keep you posted.
TheMoneyMadam
