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Abbott Hikes Dividend by 25% Amid Growing COVID-19 Diagnostics Demand

Abbott Laboratories Inc. (ABT) is a multinational healthcare company that develops medical devices, diagnostics, branded generic medicines and nutritional products. With nearly $32 billion in 2019 revenue, the company holds market-leading positions in continuous glucose monitoring, stents, point-of-care testing and nutrition among other areas.

The company generated approximately 38% of its revenue from medical devices with the remaining amount split between nutritional and diagnostics at 23% and 24% respectively in 2019. Within medical devices, the company generated the most revenue from heart rhythm management, vascular devices and diabetes care products.

A Long History of Dividends

Abbott Laboratories has paid a dividend for 96 consecutive years and has raised its dividend for 48 consecutive years. While the COVID-19 pandemic hurt many sectors, the company reported a 9.6% increase in third quarter revenue driven by a 38% increase in diagnostics thanks to demand for its COVID-19 rapid testing solutions.

In mid-December, the company secured an emergency use authorization for guided at-home use of its BinaxNOW COVID-19 Ag Card rapid test. The $25 cost for the test and service is the lowest currently available for at-home tests, according to the company. Customers using the test can receive results in as little as 15 minutes.

The company raised its quarterly dividend by 25% to $0.45 per share, which represents a 1.71% forward yield. The dividend is payable on February 16, 2021 to shareholders that are on record as of January 15, 2021.

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