Are you looking for the best of both worlds from your stock picks? That is to say, do you want strong dividend yields as well as growth? Such names are few and far between. In many cases, you get one or the other.
There are some stocks, however, that offer above-average dividend payouts as well as above-average growth potential. Not all of them are considered mainstream names, mind you. But, that doesn't necessarily mean these companies are completely off-limits to interested investors.
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1. AbbVie
AbbVie (ABBV -1.03%) is probably the most recognizable name you'll find on this list of stocks. AbbVie is perhaps most noteworthy for making arthritis, psoriasis, and Crohn's disease treatment, Humira, which is not only the company's best-selling drug (accounting for nearly 50% of the company's top line), but the world's, too.
That won't be the case for much longer, as Humira has lost the crux of its patent protection. In fact, AbbVie concedes it's seeing international sales of the drug slow down as biosimilar versions of the drug are launched by competitors. The drug is set to lose the bulk of its U.S. patent protection in 2023, one of the key reasons AbbVie shares have underperformed for years, allowing the dividend yield to inch up to its current 4.1%. Investors are understandably worried about the company's future.
It's a worry, however, that's far from merited. While would-be shareholders have every reason to expect worldwide sales of Humira to start contracting soon, the company expects its immunology drugs Skyrizi and Rinvoq to collectively generate more than $15 billion worth of annual revenue by 2025, versus around $4 billion per year now. Meanwhile, its cancer-fighting Imbruvica is on pace to eventually do on the order of $10 billion worth of annual sales, compared to about half that figure now. No single drug can replace Humira, and fiscal 2021's projected top-line growth of 23% will slow going forward. AbbVie has more in its pipeline than is being recognized, though, and what it doesn't have right now, it can use its $12 billion war chest and/or borrowing capacity to acquire. That's how it got the drug that would eventually become Humira, after all.
2. Global Ship Lease
While AbbVie may be a household name, Global Ship Lease (GSL 0.31%) is anything but. However, there's a good chance you or someone in your household benefits from its services.
As the name implies, Global Ship Lease rents boats to organizations looking to make maritime deliveries. Namely, it leases mid-sized and smaller containerships used to ferry the big 20-foot and 40-foot metal containers you see stacked on boats, trains, and even truck beds.
For the foreseeable future, the need for container-based shipping will be high, as the world plays catch-up from pandemic shutdowns. Indeed, for the first time ever, retailer Walmart has opted to lease its own containerships despite the fact that the of leasing a containership still stands at record highs hit late last year. And Walmart isn't alone. A myriad of companies are locking in long-term access to containerships at sky-high rental rates, underscoring the current level of demand and lack of supply.
This backdrop explains why Global Ship Lease's revenue is expected to report fiscal 2021 sales growth of 42%, followed by another 42% improvement in the next fiscal year. The thing is, in that it could be years before the supply of cargo ships catches up with demand, Global Ship Lease investors have good reason to expect strong profits for a long time. In the meantime, Global Ship Lease is paying a well-funded annual dividend with 4.2% yield.
3. Vici Properties
Finally, add Vici Properties (VICI -0.53%) to your watch list of high-yield, high-growth stocks. Vici Properties is a real estate investment trust, or REIT. That means it acts as a landlord and passes along most of its rental income to shareholders in a tax-efficient manner. Vici Properties is a very unique REIT, however, in that it owns the land on which 27 different U.S. casinos currently sit, in addition to the property that's home to four different golf courses, all within the U.S.
Like Global Ship Lease's business, Vici's is subject to above-average volatility. The amateur golfing industry is wobbly at best, and gambling is a highly cyclical business.
As it turns out, however, both leisure industries are experiencing an upswing. Prompted by the impact of the pandemic, a record number of first-timers played a round in 2020, according to the National Golf Foundation, and the total number of people visiting a course in 2020 grew at its best pace in the prior 17 years. Golfing's growth in the U.S. slowed last year, but there was growth nonetheless. As for gambling, the business reached record-breaking revenue of $48.3 billion as of November last year, reported by the American Gaming Association, presumably on pace to a record-breaking year.
Both rising tides bode well for Vici Properties, which is expected to report a 22% uptick in sales for fiscal 2021, and then accelerate its top line growth to 44% this year. This growth will of course help buoy the cash behind the current dividend yield of just over 5%.
