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It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.
So if you're like me, you might be more interested in profitable, growing companies, like Abbott Laboratories (NYSE:ABT). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
Check out our latest analysis for Abbott Laboratories
How Fast Is Abbott Laboratories Growing Its Earnings Per Share?
In the last three years Abbott Laboratories's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Abbott Laboratories boosted its trailing twelve month EPS from US$2.07 to US$2.51, in the last year. I doubt many would complain about that 21% gain.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Abbott Laboratories's EBIT margins were flat over the last year, revenue grew by a solid 8.5% to US$35b. That's a real positive.
In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for Abbott Laboratories?
Are Abbott Laboratories Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$206b company like Abbott Laboratories. But we do take comfort from the fact that they are investors in the company. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$1.5b. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
Does Abbott Laboratories Deserve A Spot On Your Watchlist?
As I already mentioned, Abbott Laboratories is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. Before you take the next step you should know about the 3 warning signs for Abbott Laboratories that we have uncovered.