Last week Abbott Laboratories (ABT) announced that it plans to separate into two publicly traded companies around the end of 2012. One, retaining the Abbott name, will focus on diversified medical products. The other, “New Pharmaceutical Company,” will focus on research-based drugs. Both companies will be global leaders in their respective industries on the day they begin. As a dividend growth investor with a large position in Abbott, my first reaction was, “Rats!”
Abbott has been a dividend-growth stalwart since I have been following the strategy. The company has offered terrific dividend characteristics, yet it seemed to be perpetually undervalued, thus always being prominent as a potential purchase candidate. In public and private portfolios, I have made 10 separate purchases of Abbott since 2008 and never sold a share. This is a classically beautiful dividend-growth stock. But dividend-growth investing is buy-and-monitor, and you can’t ignore a strategic left-turn like this when it apears on your radar screen.
Source: Seeking Alpha
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