Death Of An Aristocrat

Abbott Labs (NYSE: ABT ) announced Friday that it was raising its dividend for the 40th consecutive time. Adjusting for splits, the quarterly dividend has gone from less than a penny per share in 1973 to $0.51 per share today. Not too shabby. Unfortunately, there won't be a 41st consecutive dividend raise, at least not in the strictest sense.

Last year, Abbott announced that it was splitting its prescription drugs away from the rest of its health-care business. The pharmaceuticals segment will take with it about $18 billion in revenue, preventing the rest from maintaining the dividend at the current level. But Abbott knows investors love their dividends, so in a Solomon-like move the company said the dividend will be split between both entities. Investors that hold onto shares in both companies after the spinoff won't see their dividend payments go down.

Source: Motley Fool

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