Which income investors want to buy stocks with dividends likely to decline and iffy businesses? None. Instead, income investors want practically unstoppable dividend stocks.
Three Motley Fool contributors think they’ve identified healthcare stocks that fit the bill. Here’s why they picked Abbott Laboratories (NYSE: ABT), Amgen (NASDAQ: AMGN), and AbbVie (NYSE: ABBV).
A Dividend King with a diverse business to buy and hold for years
David Jagielski (Abbott Laboratories): Want a top dividend stock that you can safely buy and hold for years? Check out Abbott Laboratories. The company not only has a solid track record for paying and increasing dividends, but its broad and diverse business makes it highly probable that the hikes to its payout will continue for the foreseeable future.
You might dismiss Abbott as a mediocre income stock due to its modest dividend yield of 2%. There are many other high-yielding stocks out there. But the real payoff from owning the stock is over the long haul. The stock is a Dividend King that has increased its dividends for 52 consecutive years. It has also been paying dividends for a century.
The company doesn’t just have a solid track record, either. Its future remains promising as Abbott has a lot of different ways it can grow its business. It has pharmaceutical, nutritional, medical device, and diagnostics business units that provide it with varying growth opportunities. In its most recent quarter (which ended in June), the company reported positive organic growth, excluding the impact of COVID-19 tests, of more than 9% across its entire operations. Each one of its segments generated positive organic growth compared to the previous year.
The stock’s modest payout ratio of 67% suggests there’s still plenty of room ahead for the business to raise its dividend, especially when you consider the strength and diversity which comes with Abbott Laboratories’ operations. This is one of the better dividend stocks that buy-and-hold investors can own today.
A solid business, a solid dividend
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