With the market tumbling and dividend yields rising, now is a great time to be loading up on great, cash-yielding stocks. If you can find the right businesses to invest in today, you stand to gain a considerable amount on your purchase in the long run, when the current turbulence is just a distant memory.
In this vein, there are three stocks that are particularly attractive at the moment thanks to their evergreen business models, strong financial performance, and perpetually rising dividend payouts. All three of these stocks have outperformed the market in the last 12 months, and they also have a history of hiking their dividends over time, including recently.
And to sweeten the pot even more, one of the trio even distributes special dividends once in a while, so let's take a look at each in detail.
NYSE: ABT
Key Data Points
1. Abbott Laboratories
Abbott Laboratories (ABT 0.10%) makes everything from baby formula to coronavirus tests and even medical devices, and it's one of the most reliable companies around when it comes to paying out dividends.
Its forward dividend yield is nearly 1.8%, but more importantly, Abbott has raised its dividend every year without fail for the last 50 years, making it a member of the elite Dividend King club of stocks. Its massive and diverse catalog of products means that its base of revenue is nearly impermeable to sharp drops, and it's also a consistent grower over time.
In the last five years, Abbott's quarterly net income exploded by 764%, and management is always looking for new growth opportunities. What's more, it's making steady progress to reduce its debt load over time, which only solidifies its long-term appeal.
2. AbbVie
As a spinoff of Abbott Labs, AbbVie (ABBV 2.52%) is dedicated to developing and commercializing new prescription medicines. It's also a Dividend King, and its forward yield is currently nearly 4.1%, which is worlds above the market's average yield of around 1.7%.
Part of the reason its yield is so high is that revenue from its best-selling drug Humira is starting to ebb as a result of competition from generics, which might be keeping its share price depressed. But the company has a pair of replacement drugs that it thinks should be able to make up for the revenue it expects to lose, so its future is still bright.
NYSE: ABBV
Key Data Points
And it isn't as though AbbVie is struggling despite falling income from Humira; its quarterly revenue is up by more than 49% over the last three years, and its quarterly free cash flow (FCF) has gained 195% in the same period. Beyond that, its pipeline of drugs in development is among the largest in the world, and it's not uncommon for the company to have multiple regulatory submissions waiting for action from regulators at once.
Even if one of its candidates fails to make it to commercialization, many more will be in line for their chance at bat, and that's just one more reason it's a company with a lot of staying power in the long term.
3. Costco
In case you aren't familiar, Costco Wholesale (COST +0.50%) is a discount warehouse that sells everything from groceries to gasoline, and it's also the world's third-largest retailer.
Its forward dividend yield of close to 0.8% isn't about to make anyone rich, but management consistently increases its payout while also issuing special dividends from time to time. Over the last 10 years, Costco issued four special dividends while also growing its yearly dividend by more than 277%, which is quite a feat.
NASDAQ: COST
Key Data Points
To accomplish that, Costco simply executed its business model at a larger and larger scale over time. It collects membership fees from people, and then sells them vast quantities of household products at a low price and a narrow margin. Each year, 92.3% of people who buy memberships choose to renew their subscription, which yielded the company trailing 12-month (TTM) revenue of more than $4.1 billion. But even that sum pales in comparison to its total TTM sales of more than $217.5 billion.
With so many consumers flocking to Costco and spending so much, it's hard to see how shareholders will come up short.
