3 Dividend Stocks to Buy Hand Over Fist in March

Get paid to own a stock whether it moves higher or lower. What a concept! And it's one that any investor who buys dividend stocks can enjoy. Three Motley Fool contributors believe they've identified dividend stocks to buy hand over fist in March. Here's why they picked Gilead Sciences (GILD 0.23%), Novartis (NVS -1.64%), and Pfizer (PFE 0.55%).

Gilead Sciences: Trading near its lows and a great buy for income investors

David Jagielski (Gilead Sciences): HIV drugmaker Gilead Sciences has been struggling this year after disappointing results involving Trodelvy in a recent lung cancer trial sent the stock reeling. But the company is by no means in bad shape; Trodelvy is still a promising cancer drug; and the sell-off could prove to be temporary.

A key reason this is still an excellent buy is the growing diversification that Gilead's portfolio possesses. In addition to having a strong HIV business that generated more than $18 billion in revenue last year (growing at a rate of 6%), Gilead has also been expanding into other areas, such as oncology. Last month, it announced plans to acquire CymaBay Therapeutics in a move that would strengthen its portfolio of potential liver disease products.

Gilead's modest dividend-payout ratio of 66% means that the company's current dividend is well supported by its strong earnings. And with Gilead potentially getting bigger and becoming more diversified in the future, there's even less risk in the long run for investors. Its 4.2% yield provides investors with an above-average payout, and Gilead has also increased its dividend payments in recent years.

Given that the stock is trading near its 52-week low, I think there's plenty of incentive for investors to add Gilead to their portfolios right now. Investors can profit from both the recurring dividend income the stock offers as well as the potential gains it may generate in the future as its valuation is likely to bounce back.

Novartis: A new look won't change old habits

Prosper Junior Bakiny (Novartis): Last year, Switzerland-based pharma giant Novartis shook up its business. The company spun off its generic and biosimilar drug unit, Sandoz, into a stand-alone entity. With this new look, Novartis will be more focused on its core pharmaceutical operations, investing in research and development (R&D) and hopefully expanding its already deep lineup. Though this was a major change for the drugmaker, we can expect it to remain a top dividend stock, just as it has been for a while.

Novartis has raised its payouts for 27 consecutive years. The company's yield of 3.7% is competitive. Its cash-payout ratio is just under 62%, which is reasonable. Just as important, Novartis' underlying operations are more than strong enough to sustain its dividend program. The company had 13 blockbuster products in 2023. Most of them grew their sales at a good clip on a year-over-year basis.

The company's net sales in 2023 increased by 8% year over year to $45.4 billion, while its earnings per share (EPS) of $6.47 came in 18% higher than the previous fiscal year. Novartis' pipeline looks exciting too. The drugmaker is running over 100 programs. Even with a modest 20% success rate, Novartis should be able to earn plenty of brand-new approvals and label expansions regularly that will help drive its top and bottom lines even higher.

So, with a solid business, Novartis' dividend appears to be safe. And although it has lagged the market so far this year, I don't think that income-seeking investors can go wrong by adding shares of Novartis to their portfolios today.

Pfizer: A juicy dividend plus a better future than many think

Keith Speights (Pfizer): If you want an especially juicy dividend, Pfizer could be right up your alley. The big drugmaker's dividend yield currently tops 6.2%. Pfizer has increased its dividend every year since 2010 and seems likely to extend its streak of dividend hikes.

I admit there are some potential objections to buying Pfizer, though. The stock has lost more than half its value since late 2021. Pfizer's revenue and earnings have plunged due to the declining demand for its COVID-19 products. The company also faces the loss of patent exclusivity for several of its most successful drugs over the next few years. However, I think that Pfizer's future looks better than many might think.

2024 should be a trough year for Pfizer's COVID-19 sales, in my view. That should set up more favorable year-over-year comparisons going forward. Yes, Pfizer will feel the brunt of key patent expirations in the coming years. The good news, though, is that the company's new product launches plus label expansions for established products should more than offset the revenue decline from the impending patent cliff.

There's even better news for Pfizer, too. The biopharma giant's business development deals (notably including the recent acquisition of Seagen) should add roughly $25 billion in new annual revenue by 2030. I think that Pfizer will continue to be a reliable source of income for investors going forward. I also predict that the stock will rebound as the drugmaker's new growth drivers kick into full gear.