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Abbott's on Sale

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Attention all health-care investors: There's a blue-light special in aisle three. That's where you'll find Abbott Labs (NYSE: ABT  ) trading at less than 12 times this year's expected earnings. This is a company that expects to increase earnings per share by at least 10% this year and pays out a nice healthy 3.7% dividend, as I write.

Sure, Abbott isn't firing on all cylinders the way it was last year, but things still look fine. Sales fell less than 1%, but were up 5.4%, excluding the impact of the strengthening dollar. The rate of growth from top seller Humira, has begun to slow, but still increased nearly 17% year over year thanks to international expansion. That's better than the 3% global increase in sales Johnson & Johnson (NYSE: JNJ  ) reported for its competing anti-inflammatory Remicade and will likely beat any sales increases that Amgen (Nasdaq: AMGN  ) and Wyeth (NYSE: WYE  ) will report for Enbrel. Humira may have been last to the party, but it's still got plenty of boogie in it.

The company's new drug-eluting stent, Xience V, has continued to perform well. Sales of stents -- the plain-vanilla and the drug-oozing kind -- more than doubled, as Xience V and its twin brother, Boston Scientific's (NYSE: BSX  ) Promus, which Abbott gets royalties from, continued to compete well against the other drug-eluting stents from Boston Scientific, Johnson & Johnson, and Medtronic (NYSE: MDT  ) . An uptick in the usage of the more expensive drug-eluting stents also helped sales.

Even with the overall decrease in sales, Abbott was able to increase earnings per share by 16% after adjusting for one-time items like its gain this quarter from the dissolution of TAP Pharmaceutical, its joint venture with Takeda that's all tapped out. As long as Abbott can continue to meet its guidance, investors should eventually be rewarded with the kinds of share prices and multiples that the stock was able to garner last year.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a Motley Fool Income Investor selection. The Fool has a disclosure policy.

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