Dividend stocks are rarely the lightning-growth companies that many investors seem to gravitate toward, but these types of investments certainly have an allure of their own. Whether providing additional capital that you can put back into your portfolio again and again, or increasing your total returns with time, the best dividend stocks are compelling investments that you can buy and hold for decades or even a lifetime.
Here are two such winning dividend stocks to consider adding to your portfolio ASAP.
1. Bristol-Myers Squibb
Bristol-Myers Squibb (BMY 0.14%) may not come to mind as a first-tier pharmaceutical maker, but that doesn't mean you should overlook this top dividend payer.
Bristol-Myers Squibb currently yields about 2.7%, above the 2% average for stocks on the S&P 500. Over the trailing-five-year period, the company has increased its dividend by 35%, while its yield has risen by nearly 9%. It's also worth noting that the stock has delivered a total return of 48% in the trailing-five-year period, behind the S&P 500's trailing-five-year return of about 60%.
The company has built a strong track record of revenue growth and profits on the foundation of a diverse portfolio of products including treatments in immunology, oncology, cardiology, and neurology. Many of these have been developed in-house.
Other medicines have been obtained through a series of well-chosen moves, including its 2019 acquisition of cancer and immunology drugmaker Celgene and a deal for the clinical-stage precision oncology company Turning Point earlier this year. Bristol-Myers Squibb's pipeline contains a robust lineup of more than 50 treatments targeting more than 35 diseases.
Mature businesses like Bristol-Myers aren't known for quarterly reports supercharged with dazzling levels of growth. Instead, it's one of the companies making the medicines that are constantly in demand. Such businesses are noncyclical, which translates into stable balance sheets and more-moderate shareholder gains.
NYSE: BMY
Key Data Points
In the most recent quarter, the strength of the U.S. dollar and loss of patent exclusivity for a few core products meant that Bristol-Myers's total revenue of $11.2 billion (nothing to sneeze at by any means) represented a decline of 3% from a year earlier. But on a currency-neutral basis, revenue from its in-line and new products actually increased 8%.
Moreover, revenue generated in the U.S. jumped 9% year over year. The company also reported net income of $1.6 billion, a 7% increase from one year ago.
Over the past decade, the company has increased its annual revenue and net income by 163% and 257%, respectively. The healthcare giant's incredible dividend history -- and highly profitable portfolio of products -- make it a no-brainer contender that long-term investors should consider for their list of potential buys to hold for many years to come.
At its current share price of about $79, a $1,000 investment in Bristol-Myers Squibb would give you about 13 shares.
2. AbbVie
AbbVie (ABBV 0.85%) is a member of the esteemed group of companies known as Dividend Kings, meaning it has increased its dividend annually for at least 50 consecutive years. Even though the company was formed in 2013, its spinoff from long-standing dividend payer Abbott Laboratories meant that it inherited that company's dividend history.
Since AbbVie was formed, the stock has not only raised its dividend by 270%, but its yield has also increased by more than 20%. The stock yields 4.1% for investors based on current share prices, roughly twice that of the average stock in the S&P 500.
It also has delivered a total return of more than 540% since its spinoff, compared to the S&P 500's total return of 220% in the same period.
Like Bristol-Myers, AbbVie has an extensive portfolio of drugs in many different disciplines, including virology, oncology, and immunology. Its 2020 acquisition of Allergan also added Botox to its portfolio, as well as eye medications like Lumigan for glaucoma and the dry-eye treatment Restastis.
Since AbbVie became a stand-alone company in 2013, it has increased annual revenue by nearly 206% and its net income by almost 119%.
NYSE: ABBV
Key Data Points
In the most recent quarter, the company reported total revenue of $14.8 billion, a 3% increase year over year. This was driven by revenue increases of 15%, 7%, and 4%, respectively, from its immunology, neuroscience, and aesthetics portfolios. Meanwhile, AbbVie's net earnings of about $4 billion represented a jump of 24% from the same quarter last year.
Income-seeking investors will also be glad to learn that management just announced a 5% increase for AbbVie's 2023 dividend, beginning with its payout in February.
At its current share price of $148, a $1,000 investment in AbbVie would give you about seven shares.
