There's a lot to like about consistency. That's true for people. And it's true for stocks -- especially dividend stocks. Investors want to be able to count on dividend payments that are like clockwork.
It's even better when that consistency isn't just related to paying dividends but also includes dividend increases. Dividend Aristocrats include only S&P 500 members that have boosted their dividends for at least 25 consecutive years. Some of these great dividend stocks are better than others. Here are three Dividend Aristocrats that you can buy right now.
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1. Abbott Labs
Abbott Labs (ABT 1.11%) increased its dividend in December 2020 by 25%. This marked the 49th year in a row of dividend hikes for the big healthcare company. Abbott's dividend now yields over 1.6%.
Unlike many Dividend Aristocrats, Abbott's dividend isn't the main reason to like the stock. Abbott boasts an impressive growth story. Its shares soared 26% last year, fueled by strong revenue and earnings growth. The consensus among Wall Street analysts is for the company to deliver average annual earnings growth of over 13% during the next five years.
A large part of Abbott's recent success stemmed from its COVID-19 tests. The company quickly emerged as the leader in the new market in early 2020. Abbott now markets eight COVID-19 tests under the U.S. emergency use authorization (EUA) program. Its COVID testing sales totaled $881 million in the company's latest reported quarter.
Abbott has other growth drivers, though. The most important of these is the company's FreeStyle Libre continuous glucose monitoring (CGM) device. Look for continued strong sales momentum for the CGM, especially with the third-generation version of the device securing a European CE Mark in September.
2. AbbVie
If you like Abbott Labs' dividend, you'll probably love the company's spin-off -- AbbVie (ABBV 1.03%). Because it was part of Abbott until 2013 and has continued to increase its dividend every year, AbbVie's track record of dividend increases mirrors its parent company. But AbbVie's dividend yield of nearly 4.8% is much more appealing.
AbbVie's growth prospects aren't on par with Abbott's. Still, though, analysts expect the big drugmaker to deliver average annual earnings growth of close to 11% over the next five years.
That level would be even higher, except AbbVie faces intense biosimilar competition in the U.S. for its top-selling product Humira beginning in 2023. But AbbVie already has two autoimmune disease drugs ready to take the baton from Humira. The company projects that Rinvoq and Skyrizi will generate combined sales of $15 billion by 2024.
AbbVie's lineup also includes other products with solid sales growth. Blood cancer drugs Imbruvica and Venclexta top the list. In addition, the company's acquisition of Allergan last year allowed it to pick up rising stars such as antipsychotic drug Vraylar and migraine drug Ubrelvy.
3. Johnson & Johnson
Johnson & Johnson (JNJ -1.82%) isn't just a Dividend Aristocrat. The healthcare giant's 58 consecutive years of dividend increases qualify it as a Dividend King. J&J's dividend currently yields more than 2.5%.
The company's stellar dividend record has made J&J a longtime favorite among income-seeking investors. These investors also understandably appreciate the stability that J&J offers. It's arguably the most diversified healthcare stock on the market, with multibillion-dollar businesses in the consumer health, medical devices, and pharmaceutical industries.
But what about growth? Johnson & Johnson might not be the most attractive choice on that front. Analysts look for the company to generate average annual earnings growth of only a little over 4% over the next five years. J&J's consumer and medical device segments haven't produced impressive growth recently, while sales for blockbuster autoimmune disease drug Remicade continue to fall due to biosimilar competition.
Don't dismiss J&J's long-term growth prospects, though. The company's single-dose COVID-19 vaccine could be a huge winner. Johnson & Johnson also has the financial strength to make strategic acquisitions to fuel growth. I doubt that J&J's growth lull will linger for too much longer.
