Here at the Fool, we prefer to be long-term investors. But when you are, keeping track of what your companies do is a necessity. If they change what they do, their competition and risk levels shift, too. That's exactly what's happened to Abbott Labs (NYSE: ABT) in recent years.

In 2004, the company got 96% of its revenue from just three segments: pharmaceutical, nutritional products (such as baby formula), and diagnostics (such as the Freestyle blood sugar tester). Last year, those three segments had dropped to 83% of revenue.

Abt

Source: Capital IQ, a division of Standard & Poor's.

While the nutritional segment stayed fairly constant, the once-insignificant vascular segment expanded a lot between 2004 and 2009. This primarily came from Abbott's April 2006 acquisition of Guidant's vascular business, in connection with Boston Scientific's (NYSE: BSX) purchase of Guidant, as well as Abbott's launch of the Xience line of stents.

This expansion into a new area has been good for Abbott. While overall sales have grown by 56% between 2004 and 2009, pharmaceutical sales grew by only 38%. A big part of that extra growth came from the vascular segment. If that growth continues, it will also help offset the future loss of revenue from the company's anti-inflammatory drug Humira when it goes off patent in late 2016. Humira brought in $5.5 billion in sales last year.

On the other hand, Abbott's moves have also increased the field of competition. For stents alone, Abbott now competes against Boston Scientific, Johnson & Johnson (NYSE: JNJ), and Medtronic (NYSE: MDT). It competed against J&J before in its pharmaceutical segment, but it's also added or increased the competition from the other two just by entering this new area.

So what should you take away from this? First, companies are not static. They either adapt to changes, such as upcoming patent expiration, or they wither. Second, diversification into new areas is not necessarily a bad thing. In Abbott's case, the acquisition of the Guidant segment, and entering the dog-eat-dog competitive environment of stents, has definitely not been a case of Peter Lynch's deworsification.

Would I be interested in purchasing shares? The move and result above certainly give me confidence that management is looking to the future. In addition, the P/E multiple is down at the lower end of its historical range. It's certainly worth a deeper look.

Fool editor Jim Mueller owns shares of J&J, but nothing of any other company mentioned. Motley Fool Options has recommended buying calls on Johnson & Johnson, which is a Motley Fool Income Investor recommendation. The Fool owns shares of Medtronic. The Motley Fool has a disclosure policy.