Abbott Labs is a dividend stock you can buy, almost (almost) forgetting.
Abbvie proves its toughness after losing patent exclusivity due to its heavy explosive humira.
Johnson & Johnson is an experienced dividend payer for all seasons.
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Make money without even trying: That's all about passive income. However, good investment alternatives are needed to make this "simple" money.
Three Motley Fool contributors believe they have found some huge dividend stocks that fit the bill. That's why they think Abbott Laboratory (NYSE: ABT),,,,, Abbvie (NYSE: ABBV)and Johnson and Johnson (NYSE: JNJ) It is a magnificent stock of passive income machines.
David Jagielski (Abbott Laboratory): When choosing the highest dividend stock to hold your portfolio, you want to consider a company that not only has a solid revenue record, but also has solid fundamentals. The former helps demonstrate its commitment to reward shareholders, while the latter ensures that it has the ability to continue doing so.
Abbott Labs has paid dividends for more than 100 years until 1924. Moreover, it has also increased its dividend every year for more than 50 consecutive years. Investors are not only accustomed to getting dividends from the stock every quarter, but also seeing their dividend income rise over the years.
The diversified healthcare company currently pays its shareholders a quarterly dividend of $0.59, with shareholder dividends growing 146% over the past decade. The average annual growth rate is 9.4%. The stock's 1.8% dividend yield may seem modest, but the possibility of further rate hikes is why it can make long-term purchases.
Abbott's business is also attractive because it has multiple operations, which reduces it to any particular business unit. It has market segments related to nutrition, diagnostics, medications and medical devices.
The company has achieved steady and steady results, with revenues of over $40 billion in its highest product line over the past four years. With strong free cash flow of $6.7 billion in the 12 months behind (more than $3.9 billion paid in dividends during the period), it is a good place to continue to increase dividends in the foreseeable future.
Keith Speights (abbvie): Abbott Labs separated Abbvie from a separate entity in 2013. It inherits a good record of dividend growth in its parent company and maintains that status. The big production guy has increased his dividend for 53 consecutive years.
Even better, Abbvie's dividend plan is very generous. The company's forward dividend yield is 3.64%.
But what I like most about Abbvie is its elasticity. After the spin-off, it was only a matter of time before management knew that the key patents of its autoimmune drug Humira were known. The company depends largely on Humira's sales.
However, Abbvie has invested heavily in R&D. It has made strategic acquisitions, including the purchase of Allergan in 2020. These efforts paid off.
Today, the company’s lineup has several growth drivers that far offset the decline in sales that Humira began after losing exclusive U.S. patents in 2023.
Abbvie's biggest new success story is its two successors, rinvoq and Skyrizi. Total sales of the two autoimmune disease drugs should be $31 billion by 2027, more than Humira's peak sales.
Prosper Junior Bakiny (Johnson & Johnson): Over the past few years, Johnson and Johnson's stable performance has been overshadowed by their legal and regulatory issues. Recently, the threat of tariffs has caused new challenges to overcome. Despite these issues, Johnson and Johnson are still a good passive income inventory. Here are three reasons:
First, it is a leading healthcare company that has also contributed a lot to its contributions due to its medical device division, but it earns most of its money due to its pharmaceutical business. Healthcare is a defensive industry that performs relatively well even in challenging economic times. So even if the recession finally hits the attack, some investors are concerned that well-achieved and consistently profitable healthcare players like Johnson and Johnson will be more resilient than most other industries.
Second, it has a rock-fixed financial foundation. As evidence of its balance sheet strength, the drugmaker's AAA rating is S&P Global. This is the highest available, even higher than the U.S. government.
Third, Johnson and Johnson have an impeccable dividend track record. The company has increased spending for 62 consecutive years, making it part of the Dividend King Elite Group. It may face some headwinds, but its solid business and expertise in healthcare, coupled with a lot of financial flexibility, makes it possible to overcome these obstacles. Meanwhile, the company should continue to increase its dividend for many years. That's why this stock is a great choice for investors looking for income.
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David Jagielski has no position in any of the stocks mentioned. Keith Speights has a position in Abbvie. Prosper Junior Bakiny owns a position at Johnson & Johnson. Motley Fool has a position and recommends Abbvie, Abbott Laboratories and S&P Global. Motley Fool recommends Johnson & Johnson. Motley Fool has a disclosure policy.
33 Passive Income Machines Magnificent Stocks Originally Published by Motley Fool