How would you like to have a portfolio of income-generating stocks that pay you a steadily growing wage? Contrary to popular belief, you don't need to be rich to get started.
To show just how accessible building wealth through dividend stock investing can be, I've pulled out three names that everyday investors can rely on to make regular dividend payments that rise year after year. Just $600 is more than enough to buy multiple shares of all three.
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There are heaps of dividend-paying stocks out there that you could choose from, but they won't be able to fuel your retirement dreams if they can't maintain and raise their payouts over time. Read on to see why these three rise to the top.
Medtronic
Medtronic (MDT -1.06%) is the world's largest manufacturer of medical devices. You can't open your eyes in a modern hospital room without seeing at least a handful of its products. It's also one of the most reliable dividend growth stocks you could ask for. The company's raised its payout for 45 consecutive years.
Despite being a giant company with more than $30 billion in annual sales, Medtronic has raised its payout by 8% annually over the past five years. At this pace, the 3.4% yield that the stock offers at the moment will double in about nine years.
Many of Medtronic's high-margin products, like heart replacement valves, require multiple in-person doctor visits before patients go under the knife. With fewer pandemic-related hurdles to cross, Medtronic's payout growth rate could return to double digits.
Medtronic leverages thousands of customer relationships that it's built over the years to ensure the strongest possible launch for innovative new devices. For example, the company's robotic-assisted surgery system, called Hugo, began performing urologic procedures in Europe last year.
Abbott Laboratories
Abbott Laboratories (ABT -0.81%) is a healthcare conglomerate with a collection of businesses that include medical devices. It also has such a strong nutrition business that the temporary closure of one of its plants in Michigan last year led to a national baby formula shortage.
At recent prices, the stock offers a 1.8% dividend yield that investors can rely on to continue growing. A winning combination of well-positioned healthcare businesses has allowed Abbott to raise its payout for 50 consecutive years.
Abbott's present dividend yield isn't too inspiring at the moment, but it's growing fast. The company raised its payout by 82% over the past five years despite challenges to its medical device segment that are similar to those Medtronic experienced.
Last May, the FDA cleared Abbott's next-generation constant blood glucose monitor (CGM) for diabetic patients called FreesSyle Libre 3. At the size of two stacked pennies, this is the smallest CGM on the market. With less pandemic disruption and a product that healthcare plan sponsors don't want their diabetic members to live without, it looks as if Abbott's best days are ahead.
CVS Health
Shares of CVS Health (CVS -0.74%) pay a dividend that has grown 169% over the past decade. This rapid pace is even more impressive when you consider the company held its payout steady for a few years to help pay for a transformative merger with Aetna in 2018. At the moment, the stock offers a 2.6% yield.
Aetna's a major U.S. health insurer that collects insurance premiums from around 35 million people. With more than 1,100 private medical clinics and 9,000 pharmacies, CVS Health has a lot of opportunities to provide the various health benefits it also gets paid to manage.
Pharmaceutical companies get a lot of attention, but savvy healthcare investors know that primary care was responsible for a much larger portion of the roughly $4.3 trillion Americans spent on healthcare in 2021. To realize an enormous opportunity for business synergies, CVS Health agreed to acquire Signify Health for around $8 billion last September.
CVS Health expects to close the Signify Health acquisition in the first half of 2022. Once it does, Signify's network of more than 10,000 clinicians throughout all 50 states could help this company's bottom line soar at its fastest pace to date.
