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3 High-Yield Dividend Aristocrats You Can Buy Right Now

By Eric Volkman – Updated Nov 5, 2018 at 3:31PM

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Procter & Gamble, AbbVie, and AT&T will put generous payouts into your pocket regularly, and the odds are excellent that those payouts will grow.

Are you on the hunt for a generous and reliable dividend stock? If so, the list of Dividend Aristocrats -- comprised of those few companies that have raised their payouts annually for at least 25 consecutive years -- is a fine place to start.

These companies have a vested interest in holding onto their hard-won spots on that elite roster, and thanks to the pounding the market has taken recently, the yields of several have risen above the 3% level. Here's a look at three of these powerful dividend plays.

Three crowns

Image source: Getty Images.

Procter & Gamble

Consumer goods behemoth Procter & Gamble (PG 0.00%) is the Dividend Aristocrats' aristocrat -- it has lifted its payout at least once per year for more than six decades.

There's no sign that this streak is coming to an end any time soon, either. P&G's business has started to pick up recently after several years of anemic results, with notable improvements in sales volumes and the opening rounds of a set of price increases. In its most recently reported quarter, net income grew 12% year over year, on organic net sales that improved by 4%.

Meanwhile, Procter & Gamble remains a mighty cash-generating machine, and its free cash flow is more than sufficient to support increases to the dividend. It's current quarterly payout is just under $0.72 per share, which yields nearly 3.3% at the moment.

AbbVie

In the healthcare sector, dividends don't come much bigger than AbbVie's (ABBV 2.03%) nearly 5% yield. That juicy figure is the result of a company that is brimming with cash, but that has been punished by the market this year -- some would say unfairly.

Wall Street appears concerned that its key products will be affected by drug-pricing proposals espoused by President Trump. And some investors worry that its anti-inflammatory treatment, Humira -- the highest-selling drug on the planet -- is coming to the end of its patent exclusivity in Europe, and will lose it in the U.S. in just a few more years as well.

Yet Humira is popular enough that it could handle a legislative hit or a new competitor abroad, and it still has room to run before it vaults off the U.S. patent cliff in 2023. Besides, although it accounted for 65% of AbbVie's sales last year, Humira isn't the company's blockbuster. (Cancer drug Imbruvica is also a multibillion-dollar seller, for example). On top of that, its pipeline holds a number of treatments that have excellent potential

AbbVie pays a quarterly dividend of $0.96 per share for a current yield of around 4.6%. The drugmaker has a lot going for it, and looks well positioned to maintain its Dividend Aristocrat status well into the future.

AT&T

I've saved the best payout for last: AT&T (T 0.64%), with a quarterly dividend of $0.50 per share, is currently yielding a handsome 6.6%.

AT&T is, of course, one of America's telecom incumbents, and a busy provider of the cellphone service that nearly everyone uses when they have a free moment these days. Not only that, the company is also the No. 1 provider of pay TV services in this country, thanks to its 2015 acquisition of DirecTV. (It has since, of course, added content monster Time Warner to its portfolio.)

AT&T benefits from numerous revenue streams. Lately, it has been achieving a high net profit margin, while its free cash flow -- which approached $18 billion in 2017 -- has been robust, providing fuel for its frequent dividend raises. 

Americans aren't going on a smartphone diet any time soon, nor are they going to quit watching their favorite TV shows and movies. AT&T's key businesses will be around for a long time to come.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
T
$15.83 (0.64%) $0.10
The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
PG
$131.98 (0.00%) $0.00
AbbVie Inc. Stock Quote
AbbVie Inc.
ABBV
$144.60 (2.03%) $2.88

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