Inflation isn't soaring as much as expected. More interest rate cuts could be on the way from the Federal Reserve. The S&P 500 just hit an all-time high.
What should investors do? One good answer: Buy dividend stocks. Dividends boost total returns and will pay you to wait for a rebound if the stock market sizzle fizzles. But don't just buy any dividend stock. Here are three dividend stocks to double up on right now.
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1. AbbVie
You won't find many stocks with more impressive dividend track records than AbbVie (ABBV 1.64%). The drugmaker is a Dividend King with 53 consecutive years of dividend increases. Since spinning off from Abbott Laboratories in 2013, AbbVie has increased its dividend by a whopping 310%. And its forward dividend yield is a solid 3.27%.
AbbVie isn't just a good pick because of its dividend, though. The big pharma stock has more than doubled over the last five years. This performance is especially noteworthy considering that sales for the company's former top-selling drug, Humira, began to plunge in 2023 due to biosimilar competition.
I view AbbVie's ability to navigate the loss of exclusivity for Humira as a major feather in its cap. The drugmaker has demonstrated its ability to quickly adapt. Today, AbbVie has a strong product lineup and a promising pipeline that will enable it to grow without depending on Humira as it did in the past.
Even better, the stock's valuation remains attractive. AbbVie's forward price-to-earnings ratio is 16.6, well below the S&P 500's forward earnings multiple of 22.7. Its price-to-earnings-to-growth (PEG) ratio based on five-year earnings growth projections of analysts surveyed by LSEG is a super-low 0.42.
2. Enbridge
If you want even higher dividends, check out Enbridge (ENB 1.05%). This energy stock pays a forward dividend yield of 5.72%. It has also increased the dividend for 30 consecutive years.
Aside from this juicy dividend, what I like most about Enbridge is its stability. The company has achieved its financial guidance for 19 consecutive years. Its business is relatively low risk and largely protected from the impact of inflation. Even though Enbridge is based in Canada, oil and gas delivered from Canada to the U.S. through the company's pipelines hasn't been targeted for steep tariffs by the Trump administration.
Stability doesn't mean low-growth, though. Enbridge estimates that it has roughly $50 billion of growth opportunities through 2030. Nearly half of that total is related to gas transmission. The demand for natural gas in North America should grow significantly in the coming years as new data centers are built that require massive amounts of electricity and coal-based power plants switch to gas.
Enbridge is preparing to seize these opportunities. It plans on deploying around $23 billion worth of new capital projects by 2027.
3. Realty Income
Realty Income's (O -0.09%) forward dividend yield of 5.61% is slightly lower than Enbridge's. However, this top real estate investment trust (REIT) pays its dividend monthly. Like Enbridge, Realty Income has increased its dividend for 30 consecutive years.
I like that Realty Income has delivered positive operational returns (the sum of its adjusted funds from operations per share growth and dividend yield) in every year it's been in business. This makes the REIT one of the most attractive stocks on the market for downside volatility.
Realty Income's diversified portfolio is the main reason behind its success. The company currently owns over 15,600 properties leased to 1,630 clients representing 91 industries. It focuses on non-discretionary, low price point, service-oriented retailers, including convenience stores, grocery stores, and dollar stores.
The total addressable market for net lease real estate is estimated to be around $14 billion, with $8.5 billion of the total in Europe. Realty Income should have a tremendous growth opportunity in Europe, where it faces limited competition.
