Some investors think of dividend stocks as boring and stodgy. And there are certain stocks that fit that stereotype. The dividends for such stocks are pretty much their only attraction.
On the other hand, you can find dividend stocks that are anything but boring and stodgy. Some of them have even blown away many of the so-called growth stocks in recent months. Here are three dividend stocks that soared more than 50% in 2021 and are still great buys.
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1. Devon Energy
Devon Energy (DVN 0.44%) isn't just your run-of-the-mill dividend stock. It offers a dividend yield of more than 9%. That's more than seven times greater than the S&P 500's yield.
This high-yield stock also delivered exceptionally high growth in 2021. Devon's shares have skyrocketed more than 160% this year. A rebounding economy along with higher oil and gas prices have been just what the company needed.
Can Devon provide this kind of sizzling growth in the new year? Rising interest rates could limit how much the economy roars.
However, the stock isn't too expensive for the momentum to continue. Devon's shares trade at only 8.3 times expected earnings. The consensus Wall Street target reflects a 29% upside potential for the stock over the next 12 months.
Even if Devon doesn't achieve huge gains in 2022, though, there's still the fantastic dividend. The company pays a fixed dividend that yields only around 1%. But its variable dividend kicks in a lot more. Devon expects to continue generating strong free cash flow next year. It should be in a great position to sustain its market-leading dividend yield.
2. Pfizer
Pfizer (PFE +1.24%) has been known for its dividend for a long time. With a yield of more than 2.6%, it's still attractive for income-seeking investors. But Pfizer hasn't been associated with tremendous gains -- until this year.
The big-pharma stock soared nearly 60% in 2021. You can probably guess what the primary catalyst for Pfizer was -- its COVID-19 vaccine, Comirnaty. Pfizer expects that Comirnaty will rake in sales of $36 billion this year. Gross profits from the vaccine are split equally with BioNTech.
Pfizer's fortunes should improve in 2022. Governments across the world aren't likely to dial back their vaccination efforts, considering the rapid spread of the coronavirus omicron variant. Pfizer also anticipates winning authorizations for its COVID-19 pill, Paxlovid. One analyst projects that Paxlovid could make $24 billion next year.
Even with its big gain in 2021, Pfizer's shares trade at only 11 times expected earnings. There's some uncertainty about the demand for COVID-19 vaccines and therapies beyond the next couple of years. However, Pfizer still appears to be a solid pick for long-term investors.
3. Eli Lilly
Another big-pharma stock also stood as a massive winner this year. Shares of Eli Lilly (LLY 3.67%) have jumped more than 60% year to date. Lilly's dividend yield of nearly 1.5% isn't all that impressive, but investors probably don't mind very much with the gains the stock has delivered.
Lilly's COVID-19 antibody therapies have been a huge commercial success. The company expects revenue of $2.1 billion from them this year. With lower efficacy against the omicron variant, though, the total could be significantly lower.
However, Lilly has plenty of other growth drivers that could make it a top pharma stock again in 2022. At the top of the list are autoimmune disease drugs Olumiant and Taltz, cancer drugs Tyvyt and Verzenio, and diabetes drugs Jardiance and Trulicity.
Lilly's pipeline could also produce additional blockbusters. Many investors will especially watch what happens with Alzheimer's disease candidate donanemab. The company recently initiated a rolling submission to the U.S. Food and Drug Administration for accelerated approval of the drug.
