Oct. 24--The 127-year-old warhorse, Abbott Laboratories, still races along in one key area: paying dividends.
The North Chicago health care giant has been paying dividends, through good times and bad, for 367 consecutive quarters since 1924, spanning wars, recessions, numerous acquisitions and two major spinoffs.
Next month, Abbott shareholders will open their mail to find the company again paid a quarterly dividend of 24 cents a share -- up from a year ago (22 cents a share) and the year before that (14 cents a share).
The yield of 24 cents a share amounts to 2.2 percent -- not a red-hot return but more than a 10-year Treasury bond (2.05 percent) or the average yield on a five-year certificate of deposit (0.85 percent).
"People love dividend stocks out of necessity," said Russ Koesterich, global investment strategist with BlackRock, an investment firm in New York with more than $4 trillion under management. "When CDs are at rock bottom, a dividend yield of 2 1/2 or 3 percent starts to look good."
The owner of 1,000 Abbott shares will receive $240 each quarter in dividends, or $960 a year.
For 43 years, the company has increased its annual dividend, the total of its quarterly dividends. Years ago, that earned the company a spot on the Standard Poor's Dividend Aristocrats Index, which tracks companies that annually increased their dividends for at least 25 consecutive years.
"Dividends are an important part of Abbott's heritage and investment identity, as many of our investors are looking for a combination of growth and income," Abbott spokesman Scott Stoffel said.
Abbott shares the Dividend Aristocrats index with 53 other companies, including several others from Illinois, such as McDonald's, Walgreens Boots Alliance, McDonald's Corp. and Illinois Tool Works Inc.
Some can boast they've been around nearly as long as Abbott. Walgreens, for example, has paid a regularly quarterly dividend for 83 years (36 cents a share last quarter). Others are relative newcomers; McDonald's has done so for 39 years (85 cents a share last quarter).
So who loves dividend stocks the most? Think of a retired person, or someone nearing retirement, who doesn't want to take a lot of chances with their life savings, said James Early, an income-investment adviser at Motley Fool, a financial-services company in Alexandria, Va.
"These people want to sleep at night," Early said. "They want something safe. They want reliable yields. They want a proven business model. And companies on the Dividend Aristocrats Index have paid dividends faithfully, year in and year out."
jrussell@tribpub.com
