Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like Abbott Laboratories (NYSE:ABT), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Abbott Laboratories with the means to add long-term value to shareholders.

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Abbott Laboratories' Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Abbott Laboratories' EPS has grown 21% each year, compound, over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note Abbott Laboratories achieved similar EBIT margins to last year, revenue grew by a solid 5.0% to US$42b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.NYSE:ABT Earnings and Revenue History May 21st 2025

Check out our latest analysis for Abbott Laboratories

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this freereport showing analyst forecasts for Abbott Laboratories' future profits.

Are Abbott Laboratories Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$236b company like Abbott Laboratories. But we do take comfort from the fact that they are investors in the company. We note that their impressive stake in the company is worth US$1.1b. We note that this amounts to 0.5% of the company, which may be small owing to the sheer size of Abbott Laboratories but it's still worth mentioning. This should still be a great incentive for management to maximise shareholder value.

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Does Abbott Laboratories Deserve A Spot On Your Watchlist?

For growth investors, Abbott Laboratories' raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Abbott Laboratories' continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. It's still necessary to consider the ever-present spectre of investment risk.  We've identified 1 warning sign  with Abbott Laboratories , and understanding it should be part of your investment process.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of companies which have demonstrated growth backed by significant insider holdings.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.