As most investors well know, there is no sure thing in the markets. But promising investments still abound. Three to consider now are AbbVie (ABBV -0.56%), Parker-Hannifin (PH -2.26%), and Carlisle Companies (CSL 2.57%). All three stocks have outpaced the S&P 500 in terms of total return over the past five years and each has raised its dividend for 40 or more consecutive years.
Another key similarity they have is a dedication to diversity of products. While pharmaceutical company AbbVie has been heavily reliant on immuno-oncology drug Humira, it has a huge pipeline of future drugs. Parker-Hannifin's products affect nearly every industrial sector, and Carlisle Companies' products touch on every facet of the construction industry.
Here's why these three are the ultimate set-it-and-forget-it stocks.
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AbbVie: Buy it now and watch it climb
This is the first year that AbbVie's lead therapy, immuno-oncology drug Humira, is facing biosimilar competition in the United States. It's a foregone conclusion the drug will see declining revenue this year -- the company is forecasting it to drop 37%. The company's shares are up only slightly to start the year. However, AbbVie has been preparing for the Humira patent cliff for a long time and the money the company has put into its huge pipeline should pay off for years to come.
AbbVie spent $6.4 billion on research and development in 2022 and is expecting four drug approvals from the Food and Drug Administration (FDA) this year and seven more next year. It has more than 90 programs in its pipeline and more than half of those are in late-stage trials.
The first approval that could come is bispecific antibody Epcoritamab to treat relapsed or refractory large B-cell lymphoma (DLBCL), which affects an average of 5.6 in every 100,000 people. AbbVie is partnering with Genmab on the drug and they expect to have a decision from the FDA by May 21.
The company also has hopes for additional indications this year for immune-mediated inflammatory therapy Rinvoq. The drug, which brought in $2.5 billion in revenue last year, just began its phase 3 clinical trial to treat lupus. It's already approved to treat rheumatoid arthritis, psoriatic arthritis, and eczema. It also is awaiting word from the FDA regarding its approval to treat Crohn's disease.
The company said Rinvoq and another immunology drug, Skyrizi, which had $5.2 billion in sales last year, will combine for more than $15 billion in annual sales by 2025.
The next few years may be bumpy for AbbVie, but the long-term view is solid. In the meantime, investors can benefit from the company's dividend, which it raised by 5% this year to $1.48 a share, delivering a yield of around 3.65%, more than twice the S&P 500 average. The company has increased its dividend by 270% since it split off from Abbott Laboratories in 2013. Counting its time as part of Abbott Labs, it has raised its dividend for 51 consecutive years.
Parker-Hannifin has all the parts for success
Parker-Hannifin is a leader in motion and control technologies, from adhesive coatings to anti-vibration mounts. You probably don't know all the products that Parker-Hannifin makes, but you don't need to if you're looking for a solid company to invest in. All you need to do is look at some key financials.
For starters, the stock has doubled in value over the past five years and is up nearly 12% so far this year.
The company has increased revenue for five consecutive quarters. Parker-Hannifin is coming off a strong second quarter. It reported record quarterly revenue of $4.7 billion, up 22% year over year. Net income was $395 million, up 1.9% over the same period last year, and earnings per share (EPS) were $3.04, up 2.3% year over year. The company also upgraded full-year guidance for EPS between $13.50 to $14, compared to $10.09 last year.
The company operates in two segments, diversified industrial and aerospace systems. The latter is coming back strong. The company is the leading supplier for Boeing. Now that the airplane manufacturer is seeing improved orders, with pandemic slowdowns and 737 Max problems in its rearview mirror, Parker-Hannifin is benefiting. Its aerospace systems sales were up 84% year over year in the second quarter, to $1.14 billion.
The company's dividend yield, at 1.63%, is below the S&P 500 average of 1.74%, but it is as dependable as you're going to see. It has paid out the dividend for 291 consecutive months, and raised it for 66 consecutive years. That includes a 29% bump last April to $1.33 a share, so another increase is likely on the way, particularly since the dividend's payout ratio is a low 30%.
Carlisle keeps building on its base
Carlisle's family of companies produces everything you need in a building, from weatherproofing technologies, wire and cable technologies, and a variety of applied materials. The company's stock is down 10% so far this year, but its finances show a different story.
The company reported fourth-quarter and yearly earnings on Feb. 7 and nearly everything about the report was positive. In the quarter, the company reported revenue of $1.5 billion, up 5.7% year over year. Yearly revenue was $6.6 billion, up 37%. Quarterly EPS from continuing operations was $3.44, up 40% over the same period last year, and yearly EPS from continuing operations was $17.58, up 142%.
The company operates in four segments: construction materials, weatherproofing technologies, interconnect technologies, and fluid technologies. All four saw sales increase in the fourth quarter year over year, led by interconnect technologies, which saw revenue rise 21.5% to $224 million in the quarter. It's worth noting that the last two segments are predicting high-single-digit sales increases this year.
Carlisle increased its quarterly dividend by 39% to $0.75 last August, the 46th consecutive year the company has increased its dividend. The yield is only 1.33%, but with a payout ratio of just 15%, it's possible the company could give the dividend another double-digit increase this year. Over the past five years, Carlisle has increased its dividend by 103%.
