Fortune 40: The best stocks to retire on

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Ticker: ABT
Market Cap: $69.5 billion
P/E Ratio: 13
Earnings Growth: 11%
Dividend Yield: 3.6%

Abbott Laboratories is nothing if not consistent. The pharmaceuticals and medical technologies giant has steadily increased dividends for more than a decade. Abbott achieved 16% earnings growth last quarter and boosted its dividend by 11%, but it's now trading at just 13 times earnings, compared with 19 times earnings one year ago. That's still a slight premium to its industry, but Abbott deserves it -- the stock has returned 4% over the last five years, vs. an average of 0.2%.

Investors balked when Abbott announced slowing sales of its blockbuster anti-inflammatory drug, Humira, but prescriptions have since rebounded. "We continue to have a high degree of confidence in management's ability to achieve the recently revised 2009 guidance of 15-20% growth for the drug," noted Cowen & Co. analyst Sara Michelmore in a recent report. "With the shares discounting a significant slowdown for Humira, we believe the risk/reward is attractive at these levels."

--Mina Kimes


Criteria include long-term earnings growth of 7% or more, dividend yield greater than the S&P's 3.1%, and P/E ratios below 27. All data related to stock price as of June 1, 2009. P/E ratios based on the previous 12 months' reported earnings. Earnings growth based on Wall Street estimates for the next three to five years.
By Katie Benner, Mina Kimes and Eugenia Levenson - Last updated November 04 2011: 11:59 AM ET