ABT
Abbott Laboratories
Healthcare · Medical Devices · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score reflects a balance of strengths and weaknesses: near-maximum financial health from a low debt-to-equity ratio of 0.25 and above-average profitability metrics are offset by a steep 51.3% decline in net income and weak near-term momentum.
- The growth factor was penalized heavily due to the sharp divergence between modest revenue growth of 5.7% and the dramatic contraction in bottom-line earnings.
- The dividend factor contributed positively given a 63.1% payout ratio, though the sustainability consideration tempered the score given the earnings backdrop.
Why Not Higher
- The 51.3% drop in net income and diluted EPS in FY2025, combined with a noticeable pullback in both revenue and operating income in 2026Q1, significantly weighed down the growth and momentum factors.
- Despite strong macro theme alignment with Aging Population and Diabetes / GLP-1 / Metabolic Health, this alignment did not translate into score under the model's current methodology for the theme factor.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $41,950,000,000 to FY2025's $44,328,000,000, a gain of +5.7%. However, net income fell sharply from FY2024's $13,402,000,000 to FY2025's $6,524,000,000 (-51.3%), and diluted EPS declined from FY2024's $7.64 to FY2025's $3.72 (-51.3%).
The model rewarded modest top-line expansion but heavily penalized the steep contraction in bottom-line profitability, resulting in a below-average growth score that reflects the divergence between revenue and earnings trajectories.
In FY2025, Abbott posted an operating margin of 18.2%, a net margin of 14.7%, and a return on assets of 7.5%.
These metrics indicate that Abbott converts a meaningful share of revenue into operating and net income while generating solid returns on its asset base, which the model rewarded with an above-average profitability score.
Abbott reported a debt-to-equity ratio of 0.25 in FY2025, against a total asset base of $86,713,000,000.
A debt-to-equity ratio of 0.25 in FY2025 signals a conservatively leveraged balance sheet, and the model rewarded this low financial risk profile with a near-maximum score.
Quarterly revenue was relatively stable across 2025Q2 ($11,142,000,000), 2025Q3 ($11,369,000,000), and 2025Q4 ($11,459,000,000), but pulled back to $11,164,000,000 in 2026Q1. Operating income followed a similar pattern, rising from $2,052,000,000 in 2025Q2 to $2,251,000,000 in 2025Q4 before dropping to $1,345,000,000 in 2026Q1, while net income also declined to $1,077,000,000 in 2026Q1 from $1,776,000,000 in 2025Q4.
The model captured a pattern of near-term deceleration: after several quarters of relative stability or modest improvement, both revenue and earnings weakened noticeably in the most recent quarter, limiting the momentum score to a below-average level.
Abbott's dividend payout ratio in FY2025 was 63.1% of net income.
A payout ratio of 63.1% in FY2025 indicates that Abbott returns a substantial portion of earnings to shareholders through dividends, which the model recognized as a meaningful income characteristic, though the elevated ratio relative to earnings also introduces some sustainability consideration that may temper the score.
Abbott is assigned to the macro themes of Aging Population and Diabetes / GLP-1 / Metabolic Health.
Although Abbott carries two actively tracked macro theme assignments, this alignment did not translate into score under the model's current methodology for this factor.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Abbott Laboratories posted modest top-line growth of 5.7% in FY2025, with revenue rising to $44.3 billion, but net income fell sharply by 51.3% to $6.5 billion, creating a significant divergence between revenue and earnings trajectories. On the positive side, Abbott maintains a conservatively leveraged balance sheet with a debt-to-equity ratio of just 0.25 and solid profitability metrics including an 18.2% operating margin and 14.7% net margin. Near-term momentum has softened, with both revenue and operating income pulling back in 2026Q1, while the dividend payout ratio of 63.1% signals meaningful income return to shareholders but raises some sustainability questions given the earnings decline. Overall, the company presents a mixed picture of financial strength offset by earnings pressure and decelerating momentum.
Plain English
Abbott is a large, financially stable company that grew its sales modestly in 2025, but its profits dropped by more than half, and its most recent quarter showed signs of slowing down — making it worth researching further before drawing conclusions.
Bull Case vs. Bear Case
Bull Case
- Abbott's balance sheet is conservatively leveraged, with a debt-to-equity ratio of just 0.25 against a total asset base of $86.7 billion, indicating low financial risk.
- The company maintains solid profitability with an 18.2% operating margin and a 14.7% net margin in FY2025, demonstrating meaningful conversion of revenue into income.
- Abbott is aligned with two high-relevance macro themes — Aging Population and Diabetes / GLP-1 / Metabolic Health — which represent significant long-term structural demand drivers.
Bear Case
- Net income fell sharply by 51.3% in FY2025, from $13.4 billion to $6.5 billion, and diluted EPS dropped from $7.64 to $3.72, signaling serious bottom-line pressure despite top-line growth.
- Quarterly momentum has deteriorated noticeably, with operating income dropping from $2.25 billion in 2025Q4 to $1.35 billion in 2026Q1 and net income falling to $1.08 billion in the same period.
- A dividend payout ratio of 63.1% of net income, combined with the steep earnings decline, raises questions about the long-term sustainability of Abbott's dividend at current levels.
What Could Change the Picture
Bullish Triggers
- A sustained recovery in net income and EPS back toward FY2024 levels would signal that the FY2025 earnings decline was transitory rather than structural.
- Stabilization or acceleration in quarterly operating income and revenue beyond the 2026Q1 pullback would improve the near-term momentum outlook significantly.
Bearish Triggers
- Further deterioration in quarterly earnings — particularly if operating income continues to decline from the already-weakened 2026Q1 level of $1.35 billion — would deepen concerns about profitability sustainability.
- If the dividend payout ratio rises further due to continued net income compression, dividend sustainability risk would become a more prominent concern.
Risk Profile
Low RiskAbbott's financial risk profile is low, supported by a conservative debt-to-equity ratio of 0.25 and a large asset base of $86.7 billion. However, near-term operational risk has increased as both revenue and earnings weakened in 2026Q1, with operating income falling to $1.35 billion from $2.25 billion in the prior quarter.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.