Many investors buy dividend stocks for one reason: They want a reliable income stream.
Some stocks generate larger income streams, while others provide more reliability. If you're looking for both, check out these three dividend stocks.
1. AbbVie
You just might drool over AbbVie's (ABBV 0.34%) dividend yield of close to 5.2%. You'll also almost certainly love the drugmaker's dividend track record. AbbVie is a Dividend Aristocrat -- a term for S&P 500 members that have increased their dividends for at least 25 consecutive years.
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Could the looming entrance of biosimilar rivals to AbbVie's top-selling drug Humira in the U.S. market threaten the company's dividend? I don't think so. First, Humira's sales won't totally evaporate overnight when biosimilars hit the U.S. market in 2023. More importantly, AbbVie has plenty of other products to generate revenue.
Rinvoq and Skyrizi appear to be worthy successors to Humira. AbbVie's blood cancer drugs Imbruvica and Venclexta will continue to be huge winners. The company's acquisition of Allergan earlier this year gave it several blockbuster franchises, notably including Botox. In addition, AbbVie's pipeline features several promising candidates that could boost its fortunes down the road.
It isn't likely that AbbVie will deliver jaw-dropping revenue and earnings growth with the coming challenges for Humira. However, investors should still be able to count on solid dividends from the company.
2. Brookfield Renewable Partners
Brookfield Renewable Partners (BEP 0.26%), on the other hand, is the kind of stock that should provide great dividends along with solid revenue and earnings growth. The company's dividend yield currently stands north of 3.4%. Brookfield Renewable has increased its distribution by an average of 6% annually over the last two decades.
Growth shouldn't be a problem for the company. Brookfield Renewable Partners is one of the world's top providers of renewable power. It owns hydroelectric, solar, and wind facilities across four continents. The company currently can generate 18 gigawatts of renewable power but has a development pipeline that could double its capacity.
Many countries have established aggressive goals for carbon reduction, benefitting renewable power companies like Brookfield Renewable. It also helps that wind and solar are now the cheapest sources of bulk power generation, with costs even lower than natural gas.
There's an alternative to Brookfield Renewable Partners that you might want to consider as well. Brookfield Renewable Corporation (NYSE: BEPC) is the same underlying business but is organized as a traditional corporation rather than a limited partnership (LP). This corporate structure eliminates some tax issues related to investing in an LP.
3. Innovative Industrial Properties
If you want a great dividend plus fantastic growth, Innovative Industrial Properties (IIPR +1.83%) could be just the ticket. The medical cannabis real estate investment trust (REIT) boasts a dividend yield of over 3%. Its stock has nearly doubled so far in 2020.
IIP has a solid revenue stream generated from more than 60 medical cannabis properties. It typically buys a property from a medical cannabis operator and then leases the property back to the operator. As a REIT, IIP must return at least 90% of its taxable income to shareholders in the form of dividends.
The company should be able to easily keep up its solid growth by conducting more sale-leaseback transactions. IIP's tenants include several of the largest U.S. multistate cannabis operators. It won't be surprising if the company expands its relationships with some of these big customers in the near future.
IIP also has opportunities to expand into additional markets. The company currently owns properties in 16 states, but with the recent U.S. elections, 35 states have now voted to legalize medical cannabis. IIP could be positioned to deliver even greater total returns than both AbbVie and Brookfield Renewable over the next few years.
