Want some safe stocks you can hold in your portfolio and not worry about, and that also provide high yields? Two companies which fit the bill and you should consider loading up on now are AbbVie (ABBV -1.03%) and Coca-Cola (KO 1.50%). These are among the best dividend stocks you can buy for the long haul.
1. Coca-Cola
One business that looks to be in rock-solid shape is one of Warren Buffett's favorites: Coca-Cola. The soft drink giant has been able to raise prices to battle inflation, and customers for the most part haven't wavered -- at least, not enough so that a lack of demand is hurting the company's sales. That's a good sign of the brand's strength.
What stands out to me is that its current growth rate, even amid inflation, is better than its 10-year average.
KO Revenue (Quarterly YoY Growth) data by YCharts
The biggest headwind for the business is foreign currency: Coca-Cola's business grew organically at a rate of 15% for the last three months of 2022, but its reported growth was just 7%. This was largely due to the company's broad geographic operations and the need to convert all those currencies.
Coca-Cola's business has been able to withstand inflation, recessions, wars, and all sorts of economic challenges over the years. And for decades the company has still been able to continue paying a dividend. Its streak of increasing dividend payments for 61 straight years is among the longest of the publicly traded stocks, and puts it on the very exclusive Dividend Kings list.
The stock's dividend yield is right around 3.1%, which is well above the S&P 500 average of 1.7%. And while its payout ratio of 80% might be a tad high, it's definitely sustainable given the company's strong results and continued growth. For investors looking for a safe place to invest in right now and collect a dividend, Coca-Cola's stock is a great option.
2. AbbVie
Another Dividend King stock is AbbVie. That includes the time when it was part of Abbott Laboratories' business, before it was spun off as its own entity in 2013. AbbVie pays a slightly higher dividend than Coca-Cola as its yield is 3.8%. Its payout ratio may appear concerning at 85%, but AbbVie generated more than $24 billion in free cash flow last year -- more than double the $10 billion it paid out in dividends.
AbbVie is more of a typical growth stock than Coca-Cola. While Coca-Cola is benefiting from higher prices, AbbVie may generate a better return for investors due to its growth opportunities. It acquired Botox maker Allergan in 2020 to bolster its portfolio and help diversify its offerings. While AbbVie's sales of $58.1 billion were up just 3% last year, its Botox therapeutic and Botox cosmetic products generated stronger growth, with their sales rising by 11% and 17%, respectively.
Over the past several years, AbbVie has done a phenomenal job of growing both its revenue and profits, thanks in part to acquisitions.
ABBV Net Income (Annual) data by YCharts
And there's more down the road. The company's pipeline is full of potential, with AbbVie working on more than 50 programs that are either in their mid or late stages of development.
Meanwhile, investors worried about losses of exclusivity in top-selling drug Humira should be at ease knowing that both Rinvoq and Skyrizi can make up for the inevitable declines in revenue. AbbVie has a plan to replace that revenue, plus it has some terrific growth prospects ahead, which make both its business and dividend look incredibly strong right now.
