More stimulus checks are on the way. After months of political wrangling and plenty of twists and turns, most Americans will soon receive $600 stimulus checks.
For many, this money will be critical in helping make ends meet. For others who aren't struggling financially, it will be a nice bonus they could use in lots of different ways. The most important priorities for using your stimulus money are to pay all your bills and shore up your emergency fund.
If you've got those bases covered, though, investing in stocks with great long-term prospects is a really smart way to use the funds. But which stocks should you consider buying? Here are three stocks that'll turn your $600 stimulus check into a money machine by paying consistent and solid dividends.
AbbVie (ABBV 1.89%) qualifies as a Dividend Aristocrat (an S&P 500 member that has increased its dividends for at least 25 consecutive years) because it was part of Abbott Labs for 125 years before being spun off as a separate entity in 2013. AbbVie has increased its dividend by 225% since the spin-off, with its yield currently topping 5%.
I think that AbbVie's dividend program should remain strong for a long time to come. Sure, the company's top-selling drug Humira will face increased competition when biosimilar rivals hit the U.S. market in 2023. However, past experience with other blockbuster autoimmune disease drugs showed that while sales will fall off significantly, they won't evaporate.
Importantly, AbbVie has been preparing for the challenges to Humira for years. It has two products already on the market to take the baton from Humira: Rinvoq and Skyrizi. AbbVie thinks these two autoimmune disease drugs will generate combined sales of around $15 billion by 2025. That should offset much of the anticipated sales decline for Humira.
AbbVie also has several other growth drivers. In particular, blood cancer drugs Imbruvica and Venclexta enjoy solid momentum. Sales also continue to climb for Ubrelvy and Vraylar, two neuroscience drugs AbbVie picked up with its acquisition of Allergan earlier this year.
2. Brookfield Renewable
There's a strong case to be made that Brookfield Renewable Partners (BEP -1.74%) is the top energy dividend stock on the market today. You might find that claim a little surprising, considering that the company's dividend yield is around 2% -- not bad, but not necessarily mouthwatering.
Brookfield Renewable is so attractive, though, for its long-term growth prospects. Renewable energy is the future of energy production. Solar and wind are already the most cost-effective bulk sources of electric power. Countries and large companies around the world have committed to reducing carbon emissions, which will boost the demand for renewable energy.
Brookfield Renewable is ready to meet the increased demand. The company's capacity currently stands at more than 19,000 megawatts, with renewable energy facilities across four continents. It has a development pipeline of 18,000 megawatts.
The company expects to deliver total returns over the long term of between 12% and 15%. With the strong outlook for renewable energy, Brookfield Renewable should reach and perhaps beat its goal.
3. Innovative Industrial Properties
I think that Innovative Industrial Properties (IIPR 0.29%) is the dividend stock most likely to double in 2021. If I'm right, that makes IIP's dividend yield of around 2.6% a lot more attractive than it would otherwise be.
IIP is the leading real estate investment trust (REIT) focused on the medical cannabis market. As a REIT, it must return at least 90% of its taxable income to shareholders in the form of dividends. Since paying its first dividend in late 2017, IIP's dividend has soared nearly 727%. And its stock has skyrocketed even more.
Can IIP really double in the new year? It's quite possible. The company currently owns 66 medical cannabis properties in 17 states. The medical cannabis markets in many of these states are still only in their early stages, giving IIP plenty of opportunities to grow. And there are more states that have legalized medical cannabis where IIP doesn't own properties right now than those where it does.
My view is that IIP's real estate capital alternative for medical cannabis operators will remain very attractive throughout 2021 and beyond. As IIP adds more properties, its revenue and earnings will increase. That will drive its dividend even higher. Buying this stock really should turn your stimulus check into a money machine.