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3 Top Dividend Stocks to Buy Right Now

By Keith Speights - Oct 6, 2019 at 7:00AM

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With high yields and solid growth prospects, these companies deserve income investors' attention.

There's just something satisfying about a stock that pays you to own it. And that's exactly what dividend stocks do. Of course, some of them are better than others.

Three top dividend stocks that investors can buy right now are AbbVie (ABBV -0.11%), AT&T (T 0.05%), and Brookfield Infrastructure Partners (BIP 1.35%). Here's why they stand out.

Hand holding blue marker with blue line sloping upward next to the word "Dividends"

Image source: Getty Images.

1. AbbVie

AbbVie pays a dividend that currently yields 5.72%. The big pharma company also has an impressive track record when it comes to dividend hikes. It has increased its payout by nearly 168% since it was spun off by Abbott Laboratories in 2013.

Should you worry about AbbVie's continued ability to sustain its dividend, given that its top-selling drug Humira faces competition from biosimilars and that the company is taking on debt to fund its planned acquisition of Allergan? I don't think so. The buyout of Allergan shouldn't hider AbbVie's ability to continue paying solid dividends, and the purchase will help reduce its reliance on Humira.

Further, AbbVie isn't a one-trick pony. Its blood cancer drugs Imbruvica and Venclexta continue to deliver impressive sales growth, and management expects that Orilissa will be a blockbuster success in treating endometriosis and uterine fibroids.

Its big rising stars are immunology drugs Rinvoq and Skyrizi. Both received U.S. Food and Drug Administration approval this year, and are ranked as two of EvaluatePharma's top three new drug launches of 2019. They could combine for annual sales of more than $10 billion. Thanks to growing sales for Rinvoq and Skyrizi, along with sustained momentum for its other current drugs and the expected contribution from Allergan's products, AbbVie should be able to keep its juicy dividend payouts flowing for a long time to come. 

2. AT&T

Not only does AT&T offer a high dividend yield, but its shares have also delivered a terrific performance so far in 2019, soaring more than 30%. The telecommunications and media giant's yield stands at 5.5%, and it has increased its payout for 35 years in a row.

Sure, AT&T faces some challenges. Its TV business continues to struggle. DirecTV has been an albatross around the company's neck, and its HBO unit lost a lot of subscribers after Game of Thrones wrapped up. 

But the company thinks it may have a winner with its new HBO Max streaming service, which will bring together HBO's deep content catalog, new programs, and other hit shows, notably including the still-popular series Friends.

AT&T should also profit from the coming high-speed 5G wireless boom. This drastically faster service is just beginning to roll out in some parts of the U.S.; AT&T has deployed 5G infrastructure in about 20 major markets so far. As more new smartphones hit the market that can take advantage, look for AT&T to reap the rewards from those investments.

3. Brookfield Infrastructure Partners

Brookfield Infrastructure Partners' dividend currently yields 4.4%. What's even better is that the company has consistently increased its dividend by between 7% and 9% each year, and should be able to keep doing so. 

You can think of Brookfield Infrastructure Partners as a utility stock that's turbocharged. The company operates several utilities, including regulated natural gas pipelines in Brazil, electricity transmission in North and South America, and a natural gas and electricity distribution business in the U.S. But it also owns non-utility assets including data centers, cell towers, natural gas storage facilities, railroads, ports, and toll roads.

The really great thing about its business model is that it generates a steady revenue stream. Its assets are diversified across industries and geographical regions. And with the exception of its transport businesses, those revenue sources are highly recession-resistant.

Most utility stocks don't come with significant growth prospects. But Brookfield Infrastructure does. The company's strategy is to rotate assets, selling the less profitable ones and reinvesting in more profitable businesses. As a result of this approach, Brookfield Infrastructure Partners has been able to grow its funds from operations by 6% to 9% annually. Solid dividends plus solid growth prospects make this stock a solid pick for income investors.

Keith Speights owns shares of AbbVie. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
T
$18.43 (0.05%) $0.01
Brookfield Infrastructure Partners L.P. Stock Quote
Brookfield Infrastructure Partners L.P.
BIP
$41.88 (1.35%) $0.56
AbbVie Inc. Stock Quote
AbbVie Inc.
ABBV
$141.29 (-0.11%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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