Abbott Laboratories (ABT -0.45%) is seen as a solid safe-harbor stock because of the company's 135-year history, its diversified healthcare business, and its reliable dividend.

The company is known for innovation, with two of its biggest breakthroughs being the first licensed test for the HIV virus and Humira, the first fully human monoclonal antibody drug. In July, it came out with the Aveir, which it says is the first dual-chamber pacemaker without leads and is smaller than a AAA battery. Last year, it debuted the world's smallest mechanical heart valve.

There's considerable disagreement over whether the stock is a good investment at the moment. Here's a look at Abbott from the bull and bear perspectives:

The bull case: Revenue diversity and a steady dividend

Abbott is a global company with a huge reach in products and geography. It has around 113,000 employees with 31 manufacturing sites and 12 development centers across the world, and it sells its products in more than 160 countries.

The scope of the business gives it a balance that allows it to take advantage of market trends even while other sectors are faltering. Its segments are diagnostic products, medical devices, nutritional products, and established pharmaceutical products (branded generic medicines).

Abbott's products include COVID tests, the nutritional products Similac and Pedialyte, the FreeStyle line of continuous glucose monitors (CGMs) for diabetics, a heart valve repair system, the cholesterol-lowering drug Tricor, and the thyroid hormone therapy Synthroid.

Through the first six months of this year, revenue from diagnostics products experienced a 47.3% drop year over year demand for COVID tests ebbs. However, the other divisions all grew, led by an 11% revenue increase for medical devices. If you take COVID tests out of the mix, the company's overall first-half revenue was up 10.7%, instead of being down 14.8%.

A dependable dividend allows you to buy the stock and hold on to it, all the while earning income. Instead of worrying about the usual ups and downs of the market, the dividend allows investors to make money while waiting for the stock's price to rise. Over the past decade, the share price has risen 182%, and if you factor in its dividend, the total return was an enviable 242%.

The company raised its quarterly dividend, effective in the first quarter this year, by 8.5% to $0.51 per share, the 51st consecutive annual raise. The yield is around 2.03%, compared to the S&P 500 average of 1.54%, and the payout ratio has increased in recent years, but at 62%, there's still room for continued increases.

That 51-year history of annual dividend hikes attracts long-term investors with its dependability, especially during economic downturns. At the beginning of the Great Recession in 2007, shares traded for around $27. By the end of the recession in June 2009, they had fallen 18.1% to $23.52. By contrast, the S&P 500 fell 37.93% in that same period.

The bear case: Slow growth for now and a pricey valuation

During the pandemic, sales of the company's medical devices fell as elective procedures were delayed, but sales of COVID tests more than made up for that. Abbott has increased revenue each year for a decade, but that streak is likely about to end. Through the first six months of this year, revenue of $19.7 billion was down 14.8% compared to the same period last year.

While the medical devices division has shown 48.5% growth over the past five years, if you compare this year's second quarter to the same period in 2018, the other divisions are showing much slower growth. Diagnostic revenue is up 23.7% over the same period five years ago, but it has been falling lately. Nutrition is up only 11.7%, and established pharmaceuticals are up only 13.9% over the same period five years ago. Outside of the company's diabetes products, which have done well, it's hard to see where Abbott will find additional growth in the near future.

BDX PE Ratio Chart

BDX PE ratio data by YCharts,

The company's stock is down 8% so far this year, but even with that drop, it could fall further. It's trading at a price-to-earnings (P/E) ratio of around 34, compared to the S&P 500 average of 25. The chart above shows that among the other three healthcare companies with at least 50 consecutive years of dividend hikes, only Becton, Dickinson has a higher P/E.

By most any measure, Abbott Labs remains a solid company, but investors may want to wait for a further pullback before starting a position.