If you're like most investors, 2022 has been a difficult year that you would rather forget. A war in Europe and the subsequent energy crisis it's causing would be enough to tank global stock markets in any given year. On top of Russia's invasion of Ukraine, markets are also reeling from rapidly rising interest rates intended to quell runaway inflation.
Once you consider all the challenges stock markets face, it's a little surprising that the benchmark S&P 500 index has only lost around 25% of its value this year. During difficult times like these, it makes sense to buy shares of businesses that have what it takes to survive external economic meltdowns.
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These three stocks are supported by highly reliable underlying businesses that have been making and raising their quarterly dividend payouts for a long time. Here's why putting them in your portfolio now could lead to heaps of passive income even if their share prices don't cooperate.
1. Abbott Laboratories
Abbott Laboratories (ABT 0.63%) has been advancing various healthcare businesses for over 130 years. The company has faced more than a few global economic challenges during its history, and its diversified healthcare operation has emerged stronger every time.
It's been 60 years since Abbott went more than a year without raising its dividend payout at least once. These days, the company's a leader among cardiovascular device makers. It also has a leading diagnostics business that jumped into action at the beginning of the COVID-19 pandemic.
Abbott shares offer a yield of 1.9% at recent prices. This may not seem very attractive now, but this reliable payout could jump higher in the years ahead. In May, the U.S. Food and Drug Administration cleared the company's 14-day continuous glucose monitor (CGM) for people living with diabetes. The FreeStyle Libre 3 system sends readings to patients' smartphones every minute from a tiny sensor the size of two stacked pennies that sticks to patients' upper arms.
Abbott Laboratories has been able to raise its dividend payout 77% higher over the past five years. The ongoing launch of its new CGM in the U.S. could make the next five years even more exciting.
2. CVS Health
CVS Health (CVS -0.22%) has only raised its dividend payout once over the past five years, but don't let this dissuade you from buying the stock. The company froze its dividend payout in 2018 to help pay for a $69 billion acquisition of Aetna, a leading provider of private and government-sponsored healthcare plans.
Aetna isn't the first acquisition that has transformed CVS Health from a simple retail pharmacy operation into a unique healthcare giant. The company also owns a pharmacy benefits management business that processed a whopping 1.15 billion claims in the first half of 2022.
In September, CVS took another step to stay ahead of the competition. The conglomerate agreed to acquire Signify Health for $8 billion. This is a network of more than 10,000 care providers expected to complete around 2.5 million home visits this year. The acquisition is expected to boost CVS Health's bottom line immediately, partly because the company can pull it off using cash from operations that reached a stunning $9.0 billion in the first half of 2022.
With a leading position in the rapidly evolving market for providing primary care services, I won't be surprised if this healthcare conglomerate triples its dividend payout over the next decade.
3. AbbVie
AbbVie (ABBV -4.58%) is a biopharmaceutical company that has only been making and increasing its dividend since 2013. That's because, before 2013, this was still Abbott Laboratories' biopharmaceutical segment.
AbbVie split to shield Abbott from the imminent collapse of the company's best-selling drug, Humira. This is an anti-inflammation injection first approved to treat arthritis in 2002. Subsequent approvals for psoriasis and related conditions pushed Humira sales past $20 billion annually in 2021.
The launch of biosimilar competition in Europe hammered international Humira sales in 2019. Beginning in 2023, U.S. Humira sales will begin falling in the face of biosimilar competition too. Fear of a post-Humira exclusivity future has pushed the stock low enough that its dividend offers a 4.2% yield at the moment.
AbbVie looks like a buy now because, in years past, it expertly funneled Humira profits into the development of new products that could more than offset impending Humira losses. Rinvoq and Skyrizi are treatments for arthritis and psoriasis, respectively, that both earned approvals for the first time in 2019. Skyrizi and Rinvoq are already on pace to generate a combined $7 billion in revenue annually, and AbbVie expects more than $15 billion from this pair of drugs in 2025.
AbbVie has raised its payout a stunning 120% over the past five years. With new growth drivers to offset Humira's impending losses, the dividend could continue rising rapidly for many years to come.
