If you’re looking for attractive dividend-paying stocks, that’s a smart move. If you’re not, perhaps reconsider — because:
Healthy and growing dividend-paying stocks tend to send you cash regularly, whether the market or economy is doing well or not.
They tend to increase their payouts over time, too — often annually and often by enough to beat inflation.
Dividend-paying stocks have greatly outperformed non-payers over the past 50 years or so.
Here are three dividend stocks to consider for your long-term portfolio.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
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If you’re about to yawn at the thought of a huge telecommunications company, stop — and check out AT&T‘s (NYSE: T) recent dividend yield: 4.9%. That’s pretty good, and the picture gets better. AT&T has recently sold off its 70% stake in DirecTV, generating a lot of cash that can be used to pay down debt and to reward shareholders. That dividend is one solid reward for shareholders, but the company is also planning to buy back around $20 billion worth of its shares, which also rewards shareholders. (Imagine a pizza. If it’s divided into seven equal slices instead of eight, each piece will be bigger. It’s the same with companies that reduce their number of shares.) AT&T is also raising prices, which should boost revenue.
AbbVie (NYSE: ABBV) is a drug company with a recent dividend yield of 3.5%. That’s quite respectable, and the stock also offers a history of impressive price gains. Over the past five years, for example, it grew at an average annual clip of 14.9%, and 10.5% over the past decade.
As a drug company, AbbVie faces the loss of patent protection for various drugs over time, and the loss for its big seller Humira is tough. But major pharmaceutical companies tend to have a lot of drugs in development, some or many of which might end up as blockbuster sellers. AbbVie recently had more than 90 drugs in its pipeline, 50 of which were in mid- or late-stage development. The company plowed nearly $8 billion into research and development in 2023.
Shares don’t seem bargain-priced at recent levels, so consider building a position in it incrementally. Shares also don’t seem wildly overvalued, so anyone buying now can enjoy dividend income while waiting for AbbVie’s revenue, earnings, and valuation to grow over time.
Johnson & Johnson (NYSE: JNJ) is a super familiar name for most people, and it’s a compelling stock as well. Its dividend recently yielded 3.4%, and that payout has been increased by about 5%, on average, annually over the past five years. Johnson & Johnson has been increasing its payout for 62 consecutive years!
The company was long known for being in three big businesses: pharmaceuticals, medical devices (think catheters, artificial joints, and more), and consumer products such as Band-Aid and Tylenol. It spun off that slower-growing consumer product business in 2023, though, creating a new company, called KenVue (NYSE: KVUE). That leaves two faster-growing divisions, and a lot of potential.
In its facts for investors, the company points out that about 25% of its revenue comes from products launched within the past five years and more than 65% of revenue comes from items that have a global market share of No. 1 or No. 2. Johnson & Johnson’s impressive third quarter featured revenue up 5% year over year. With its recent forward-looking price-to-earnings (P/E) ratio of 13.6 well below its five-year average of 16.0, the stock seems appealingly valued.
These are just a few of many appealing dividend-paying stocks. Whether you invest in these, some others, or a powerful dividend-focused ETF, you can be positioning your portfolio for long-term growth.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $363,593!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $48,899!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $502,684!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 23, 2024
Selena Maranjian has positions in AT&T and AbbVie. The Motley Fool has positions in and recommends AbbVie and Kenvue. The Motley Fool recommends Johnson & Johnson and recommends the following options: long January 2026 $13 calls on Kenvue. The Motley Fool has a disclosure policy.
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