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Monday August 23, 2010
Blue chip trio: IBM, Abbott and Automated Data
by Kelley Wright, editor IQ Trends  We believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation. Here we look at three blue chip stocks that have earned our top designation for outstanding dividend growth: IBM (IBM), Automatic Data Processing (ADP) and Abbott Laboratories (ABT). International Business Machines is the world’s top provider of computer products and services with over $96 billion in revenues for 2009. In 2009, IBM was awarded 4,914 US Patents in its 17th consecutive year as the recipient of the most patents of any American company. IBM operates in 170 countries and has increased both its earnings per share and profit margin for 7 consecutive years. 
Earnings per share have grown at an average rate of 18.4% per year over that period. IBM has consistently grown its return on equity for the past 5 years and the current ROE is over 74%. Founded in 1911, IBM has paid an uninterrupted cash dividend since 1916. Automatic Data Processing is the largest global provider of payroll out sourcing services based on revenue ($8.9 billion in 2009). ADP provides combined human resource, payroll, tax, and benefits administration services from a single source. ADP has had an average Return on Equity of 23.16% over the last 10 years and its current ROE is over 25%. Founded in 1949, ADP has paid an uninterrupted cash divided since 1974 and has earned the IQ Trends “growth designation for outstanding dividend growth. ADP is a member of the 2010 S&P 500 Dividend Aristocrats and has increased its dividend for 34 consecutive years. Abbott Laboratories is in the business of discovering, developing, manufacturing, and selling health care products worldwide. ABT does business in 130 countries worldwide and 54% of revenues are earned internationally. ABT has had an average return on equity of 23.16% over the last 10 years and its current ROE is over 28%. Founded in 1888, Abbott Laboratories has paid an uninterrupted cash divided since 1926. ABT is a member of the 2010 S&P 500 Dividend Aristocrats and has increased its dividend for 38 consecutive years. Learn more about this financial newsletter at Kelley Wright's Investment Quality Trends. |
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