3 Unstoppable Dividend Stocks to Buy in February

Will the stock market rise or fall in 2023? Income investors can win either way. Any time is a good time to buy solid dividend stocks.

We asked three Motley Fool contributors to identify unstoppable dividend stocks to buy in February. Here's why they chose Abbott Laboratories (ABT -0.03%), AbbVie (ABBV -0.30%), and Johnson & Johnson (JNJ -1.15%). 

Even a bad year in 2022 can't stop Abbott's dividend hikes

David Jagielski (Abbott Laboratories):  One dividend stock that should be attractive to long-term investors is Abbott Laboratories. The company's versatility and broad business make it a strong dividend investment to own. Abbott's most recent quarterly results are an excellent example of that.

For the period ending Dec. 31, 2022, the healthcare company's quarterly net sales totaled $10 billion and were down 12%. And that was with some significant declines in COVID-19 testing as diagnostic revenue was down 26% from the prior-year period, while nutritional revenue fell by 11%. But better performances in Abbott's medical-device and pharmaceutical segments helped offset some of those lackluster numbers.

Abbott's diluted earnings per share (EPS) plunged 47% year over year to $0.59. But when factoring out one-time items, the company's adjusted per-share profit was $1.03, suggesting there was plenty of noise on Abbott's most recent financials. Despite manufacturing disruptions impacting its baby formula sales, costs related to recalls, restructuring charges, and other nonrecurring expenses, the company is still coming off a profitable quarter. The great thing for dividend investors is that despite so much adversity, Abbott can still post a strong profit margin of over 10%.

Confident in its financials, the company also increased its quarterly dividend last year by 8.5%. That means Abbott has now raised its dividend for 51 straight years. Although its yield may look underwhelming at just 1.9%, for long-term investors, it's likely that the payouts will continue growing in the years ahead.

The past year was a brutal one for Abbott and yet the company's full-year EPS was still far above what it is paying out annually in dividends per share right now ($3.91 vs $2.04). The company's payout ratio is relatively low. With a robust and diversified business, Abbott makes for an unstoppable income investment to buy and hold for the long haul.

Five decades of dividend increases and counting 

Prosper Junior Bakiny (AbbVie): In October, pharmaceutical giant AbbVie announced a 5% dividend increase that would kick in during the first quarter of this year, pushing its dividend yield to over 4%. And thus, AbbVie entered year 51 in its streak of consecutive years of dividend hikes when including its time as a division of the company previously mentioned -- Abbott. This stellar record makes AbbVie a Dividend King. Investors have every reason to think its future could look much like its past. 

AbbVie markets a long list of medicines in various therapeutic areas. The company generates consistent revenue and earnings thanks to its lineup. With a rich pipeline that boasts dozens of products, AbbVie routinely adds brand-new products or earns label expansions for existing ones.

It is true that the company now faces the impact of the loss of exclusivity of its longtime best-selling product, rheumatoid arthritis medicine Humira. But AbbVie planned ahead and seems more than capable of eventually putting this issue in the rearview mirror.

The company's other immunology products, Skyrizi and Rinvoq, its Botox franchise, migraine treatment Qulipta, and cancer medicine Venclexta will help smooth out the losses caused by biosimilar competition to Humira. And although AbbVie expects a relatively short period of declining revenue, growth should pick up once its business adjusts.

In the meantime, AbbVie will likely continue to reward shareholders with dividend increases. The company has prioritized dividend payments since it became a stand-alone company in 2013, increasing its payouts by 270% since then. AbbVie won't risk losing its status as a Dividend King. That's why AbbVie remains a top pick for dividend investors to buy this month and beyond. 

Add another king to your hand

Keith Speights (Johnson & Johnson): Like Abbott and AbbVie, Johnson & Johnson belongs to the elite group of stocks known as Dividend Kings. The healthcare giant has increased its dividend for an impressive 60 consecutive years. 

After beating the S&P 500 last year, Johnson & Johnson is off to a relatively bad start in 2023. The company's shares have tumbled around 6% despite reporting better-than-expected fourth-quarter results in late January. 

I think, though, that J&J has what it takes to rebound over the near term. Year-over-year comparisons due to declining sales of the company's COVID-19 vaccine should become less problematic as time goes by. Johnson & Johnson's business could also be helped if inflation moderates further.

The biggest milestone to look forward to this year, however, is J&J's upcoming spin-off of its consumer health unit. This divestiture will leave the company with its faster-growing pharmaceutical and medtech businesses.

Over the long term, I expect that Johnson & Johnson will continue to be what it's been for decades -- a reliable winner. Look for the company to keep its streak of dividend increases going for years to come as well.