Which income investors want to buy stocks whose earnings are likely to decline and whose business is questionable? No one. Instead, income investors want dividend stocks that are virtually unstoppable.
Three Motley Fool contributors believe they have identified Healthcare Stocks That fits the bill. That’s why they chose it. Abbott Laboratories (NYSE: ABT), Amgen (NASDAQ: AMGN)and AbbVie Inc. (NYSE: ABBV).
Dividend king with diversified businesses to buy and hold for years.
David Gagielski (Abbott Laboratories): Want a high-dividend stock that you can safely buy and hold for years? Check out Abbott Laboratories. Not only does the company have a solid track record of paying and increasing dividends, but its broad and diverse business makes it very likely that its payout increases will continue for the foreseeable future.
You might dismiss Abbott as a middling dividend stock because of its modest 2% dividend yield. There are plenty of other high-yielding stocks out there. But the real rewards of owning the stock come over the long haul. The stock is the dividend king, having increased its dividend for 52 straight years. It has also been paying a dividend for a century.
Not only does the company have a proven track record, but its future is bright as Abbott has many different ways to grow its business. It has pharmaceuticals, nutrition, medical devices and diagnostics businesses that provide it with differentiated growth opportunities. In its most recent quarter (ended in June), the company reported positive organic growth, excluding the impact of COVID-19 testing, of more than 9% across its entire operations. Each of its segments achieved positive organic growth year-over-year.
The stock’s modest payout ratio of 67% suggests that there is still plenty of room for the company to grow its dividend, especially when you consider the strength and diversity that comes with Abbott Laboratories’ operations. This is one of the best dividend stocks that buy-and-hold investors can own today.
Strong business, strong profits
Prosper Junior Pacini (Amgen): What is the most important thing for dividend investors to consider? A high yield is attractive, as are competitive dividends per share. One could mention several other metrics that focus on dividends, but the company’s core business remains the most important factor to consider. A company’s earnings are only as good as the business that supports them.
This is what makes Amgen an attractive option. Amgen is a leading biotechnology company with a proven track record of innovation and a long list of approved products, many of which generate more than $1 billion in annual sales.
Its pipeline looks just as exciting, especially since it may have been One of the promising candidatesIn the hot weight-loss market, Amgen’s Maritide has produced strong results in Phase 2 studies. There’s still a long way to go before the drug wins approval, if it ever does. But it’s already got some analysts excited. According to market research firm Evaluate Pharma, Maritide could generate $2.1 billion in sales by 2030.
While Amgen’s organic revenue growth has been unimpressive over the past three years, candidates like Mary Tide and others will help move things in the right direction. Amgen’s dividend program has remained strong throughout. The company’s payout has increased by 55% over the past five years. Its forward yield is 2.74%, which is higher than the company’s average annual yield. Standard & Poor’s 500The company’s average dividend yield is 1.32%. With the company’s strong fundamentals, investors can be confident that Amgen will continue to grow its dividend.
Another great member of the dividend distribution team.
Keith Spates (AbbVie): I didn’t know that our three picks would start with the letter “A.” However, I think it’s fitting because AbbVie truly deserves to be on the “A” dividend team.
The big drugmaker was spun off from Abbott in 2013. AbbVie inherited Abbott’s impressive track record of increasing dividends, and is a dividend king like its parent company. However, income investors should love AbbVie’s future dividend yield of about 3.2%, which is higher than Abbott’s.
AbbVie has a reasonable valuation with its forward earnings multiple of 18.2. The stock’s valuation looks even more attractive considering the company’s growth prospects.
AbbVie’s revenue and earnings have certainly been down since its best-selling drug Humira lost its U.S. patent exclusivity in early 2023. However, the company is expected to see a strong rebound. Sales of AbbVie’s latest autoimmune drugs, Rinvoq and Skyrizi, are soaring. The drugmaker also has big growth drivers in its antipsychotic Vraylar and migraine treatments Qulipta and Ubrelvy.
AbbVie’s pipeline provides further reason for optimism. The company has more than 90 programs in development. These include promising drugs for cancer, immunology and neurological diseases, many in late-stage testing.
Should you invest $1,000 in AbbVie now?
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David Gagielski He has no position in any of the stocks mentioned. Keith Spits He holds positions at AbbVie. Prosper Junior Pacini The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Abbott Laboratories. The Motley Fool recommends Amgen. The Motley Fool has Disclosure Policy.
3 Unstoppable Dividend Stocks to Buy Now Originally posted by The Motley Fool
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