Want some quality income-generating investments you can put in your portfolio for the long term, and not worry about? The stocks listed below check off those boxes and can make for ideal investments to buy and hold. Not only do they offer high yields today, but they’ve also been growing their payouts for decades.
AbbVie (NYSE: ABBV), Home Depot (NYSE: HD), and ExxonMobil (NYSE: XOM) can diversify your portfolio while also setting you up to generate plenty of recurring cash flow for the long term. Here’s a closer look at them, and why they’re among the best dividend stocks you can buy today.
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Pharma stock AbbVie pays investors a yield of around 2.9% right now, which is more than double the S&P 500 average of 1.2%. The company spun off from Abbott Laboratories back in 2013, and when including its streak as part of that business, it spans more than 50 straight years, which means AbbVie is a Dividend King.
The company’s most recent increase is a 5.5% boost to its payout in light of its strong financial results. Since splitting off from Abbott Labs, AbbVie has increased its quarterly dividend payments by over 330%. AbbVie hasn’t simply been boosting the dividend to keep its streak going; it has been making meaningful rate hikes for its shareholders.
Through the first nine months of the year, the company has demonstrated strong growth with sales rising by 8%, to $44.5 billion. Humira is no longer its top-selling drug, but AbbVie has been able to pivot to other drugs, with Skyrizi and Rinvoq generating a combined $18.5 billion through the first three quarters, well above Humira’s current quarterly tally of $3.3 billion.
With a diverse mix of drugs treating various diseases and conditions, AbbVie is one of the most robust and safest dividend stocks you can find in the healthcare sector.
Home improvement giant Home Depot is another top dividend growth stock to buy and hold. While it may not have the impressive growth streak that AbbVie has going, it has been raising its dividend for 16 straight years. And since 2020, its quarterly dividend has grown by more than 50%.
It’s currently yielding 2.7%, which is a solid rate for the retailer. The business is facing challenges as discretionary spending has been down amid challenging economic conditions. But what’s encouraging is that the company still expects sales growth of 3% for its current fiscal year (it ends in January).
Shares of Home Depot are down 13% this year as investors worry about troubling results ahead. But the home improvement retailer should recover in the long run, as it’s a top name in home repair. Spending money on repairs and maintenance around the house can be put off temporarily, but it’s also an inevitability that comes with home ownership, which is why I’m confident it can bounce back from any downturn, as it has in the past.
From healthcare to retail to now oil and gas, ExxonMobil is a stock that can help balance out and diversify your portfolio. Its 3.5% yield is the highest one on this list. As a leading oil and gas producer, ExxonMobil has the strength to take on myriad challenges and still generate strong results and grow its dividend.
Its dividend has grown on an annual basis for 43 consecutive years, at an average rate of 5.8%. Despite volatility in commodity prices, for decades, the company has demonstrated some excellent financial strength. This year, there has been some volatility in its bottom line as ExxonMobil’s earnings have declined by $3.7 billion, to $22.3 billion thus far. But with earnings per share of $5.16 during that stretch, that’s already more than what the company pays in dividends for an entire year — $4.12.
ExxonMobil’s earnings may seem shaky and volatile, but the company can afford to handle the uncertainty and still provide investors with a growing dividend over the long term. The stock is up 8% this year, and it trades at an estimated 16 times its future earnings (based on analyst estimates), making it a good value option for income investors to buy and hold.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, and Home Depot. The Motley Fool has a disclosure policy.
