Who doesn't like dividends? Whether you want to generate an extra source of income, expand your existing nest egg, or generate more liquidity to build your portfolio, dividend stocks can help you accomplish all of these goals.
If you're searching for top dividend stocks to lend long-term growth and returns to your portfolio but are short on time to separate the wheat from the chaff, you've come to the right place.
Today, we're going to look at two very different companies -- a rock-star retailer and a healthcare giant. Each of these household names has the competitive advantages and industry leadership needed to fuel long-term balance sheet and share growth, and can also boast an illustrious track record of paying and raising their dividends over many years.
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1. Target
Target (TGT 0.18%) is a Dividend Aristocrat that pays a yield of 1.2% based on current share prices, and is just a few years shy of being crowned a Dividend King. Many retail stocks have had their fair share of struggles throughout the market events of the last year, but Target wasn't one of them.
The company has several catalysts to thank for its continued resilience, not only during the pandemic but despite the broad headwinds that continue to afflict many brick-and-mortar brands in an increasingly digital age. For starters, Target was one of a handful of retail chains that had "essential" store status during the pandemic, which meant its operations continued uninterrupted at the height of lockdowns while other popular retailers faced lengthy closures.
In addition, the company has a wide slate of staple products that attract consistent demand from consumers, regardless of the state of the economy. And Target has also been one of a handful of brick-and-mortar retailers that has been able to amass an impressive e-commerce presence to expand balance-sheet growth beyond its robust in-store sales.
Target's 2020 sales of $92.4 billion represented a whopping $15 billion surge from its 2019 sales. Management said that this increase "was greater than the Company's total sales growth over the prior 11 years." Target reported that its total comparable sales surged 19% in 2020, while digital comparable sales alone increased by an eye-popping 145%.
Target's first-quarter 2021 financial performance was a continuation of this stellar streak of growth. Management said that its total comparable sales surged nearly 23% in the quarter, thanks to a 50% increase in its digital comparable sales and an 18% spike in store comparable sales from the year-ago period. In addition, Target reported earnings-per-share (EPS) growth to the tune of 643% on a year-over-year basis.
Shares of Target have risen 86% over the trailing 12 months, and the company grew its market share by a whopping $1 billion in the first quarter of 2021 alone. If you're searching for an unstoppable stock that pays a reliable dividend and can lend meaningful long-term growth to your portfolio, Target looks like a match made in heaven.
2. Pfizer
Pfizer (PFE 0.55%) pays a robust dividend with an above-average yield of 4%. For context, the average stock trading on the S&P 500 pays a dividend that yields below 2%. But Pfizer is so much more than just a great dividend stock.
The company's impressive lineup of top-selling products generates continued, sustainable balance-sheet growth that can translate to durable returns and portfolio value for long-term investors. Of course, one of these products is Pfizer's COVID-19 vaccine (now being marketed as Comirnaty) which it developed with its German partner, BioNTech.
Comirnaty is projected to bring in a whopping $26 billion in sales in the full-year 2021. Pfizer and BioNTech just announced a new landmark supply deal with the European Union on May 20. Under the terms of the agreement, the companies will provide up to 1.8 billion doses of Comirnaty to the EU between the end of 2021 into 2023. That's on top of the 600 million doses it's already supplying this year.
Beyond the storied success of Comirnaty, which added $3.5 billion to Pfizer's top line in the first quarter of 2021 alone, the company has an impressive stable of medicines that are also fueling remarkable sales growth. These include anticoagulant Eliquis, arthritic medication Xeljanz, prostate cancer treatment Xtandi, and chemotherapy drug Inlyta. First-quarter product revenues generated by these drugs alone grew by respective rates of 25%, 18%, 28%, and 34% on a year-over-year basis. Pfizer also reported that revenues from its lineup of biosimilars surged 79% year over year.
Pfizer reported total revenue for the first quarter of 2021 of nearly $15 billion, a 42% spike from the year-ago period. And if you don't count the revenues generated by Comirnaty, Pfizer's total revenues still increased by a respectable 8% year over year.
Shares of Pfizer haven't moved all that much in recent months, despite the company's continued balance-sheet growth and the success of its COVID-19 vaccine. This provides an excellent opportunity for investors to buy shares of this high-quality stock at an affordable price. Analysts think that Pfizer has an upside potential as high as 36%, so it's definitely not too late to scoop up this premium healthcare stock and bank on its long-term growth potential.
