Popular Robinhood stocks and dividends might seem to go together like orange juice and toothpaste. Robinhood investors tend to like growth stocks that don't pay dividends and might never do so.
However, there are probably more dividend stocks among the 100 most popular stocks on Robinhood than you might think. And several of them offer not only solid dividends, but decent growth prospects as well. Here are three popular Robinhood dividend stocks you can buy right now.
Bank of America
With so many fintech stocks to choose from, it could be a little surprising that Bank of America (BAC 2.30%) ranks as the most widely held financial stock for Robinhood investors. Bank of America isn't a stodgy bank stock, though. Its shares have soared nearly 60% over the last 12 months and are up close to 40% so far this year.
The company offers a solid dividend that currently yields around 2%. Although BofA didn't increase its dividend in 2020 because of the effects of COVID-19, it has boosted the dividend payout by an impressive 180% over the last five years.
Some investors might be worried that Bank of America missed revenue estimates in the second quarter of 2021. This rare miss was due primarily to lower-than-expected trading revenue in the company's investment banking unit. The good news is that BofA's core banking business performed quite well.
Bank of America should benefit as the global economy recovers from the COVID-19 pandemic. The company's investments in technology differentiate BofA from its peers. Robinhood investors like this bank stock for a good reason.
Johnson & Johnson
No other stock on Robinhood's 100 most popular list comes with the dividend pedigree of Johnson & Johnson (JNJ 1.08%). The healthcare giant is a Dividend King -- an elite group of S&P 500 stocks that have increased their dividends for at least 50 consecutive years. J&J's streak of dividend hikes stands at 59 years in a row. Its dividend yields north of 2.4%.
Johnson & Johnson provides stability that's nearly unmatched. The company's diversification across healthcare certainly helps. J&J is a leader in consumer health, medical devices, and pharmaceuticals. It has 28 different platforms or products that generated more than $1 billion in sales last year. Roughly 70% of its total revenue comes from products that are either No. 1 or No. 2 based on global market share.
To be sure, Johnson & Johnson faces some challenges. The company has been embroiled in high-profile litigation on multiple fronts. Sales are falling for its former top-selling drug, Remicade, due to biosimilar competition.
However, J&J has survived and thrived through more difficult times over the last 135 years. Its overall business continues to deliver solid growth. There are few dividend stocks -- including those that aren't widely held by Robinhood investors -- that are better choices to buy and hold over the long term than Johnson & Johnson.
Johnson & Johnson isn't the only big pharma stock that Robinhood investors like. Pfizer (PFE 1.29%) is even more popular, currently ranking No. 14 on the trading platform's top 100 stocks list.
Although Pfizer isn't a member of dividend royalty like J&J is, the company offers an attractive dividend yield of 3.3%. That yield topped 4% throughout the first several months of 2020. However, Pfizer's shares have soared over 30% year to date, causing its dividend yield to decline.
You can probably guess why Pfizer stock has performed so well. The company's COVID-19 vaccine has become a massive commercial success. Pfizer expects the vaccine will generate sales of $33.5 billion this year, with its partner BioNTech receiving half of the profits. That total will make the vaccine the biggest-selling drug or vaccine in the world.
There are some uncertainties about how long the COVID-19 vaccine gravy train will last. Some key patents for several of Pfizer's drugs also expire later this decade. However, Pfizer has other drugs that should generate strong growth. It also has a huge and growing cash stockpile that it could (and probably will) use to make acquisitions.