What will the world look like five years from now? How you answer the question should help you determine how you invest now.
I expect that healthcare and energy will remain critical in 2031. That's why I think holding the following two dividend stocks for the next five years is a smart move for income investors.
1. AbbVie
AbbVie (ABBV 1.03%) ranks as the world's third-largest healthcare company based on market cap. The company markets 12 blockbuster drugs, plus several others that generate hundreds of millions in annual sales.
I predict that the three most important markets for AbbVie -- immunology, neuroscience, and oncology -- will expand significantly going forward. Populations in the U.S. and many other major countries are aging. As people age, they're more susceptible to developing autoimmune and neurological disorders as well as cancer.
NYSE: ABBV
Key Data Points
AbbVie has clearly demonstrated its ability to innovate internally and find outstanding acquisition targets in each of these areas. The company's prowess on these fronts enabled it to quickly return to growth after losing patent exclusivity for its longtime best-selling drug, Humira.
Income investors should love AbbVie's dividend. The drugmaker is a member of the Dividend Kings, a group of stocks that have increased their dividends for at least 50 consecutive years. Its forward dividend yield of roughly 3% is also attractive.
Image source: Getty Images.
2. Enbridge
Would you bet more money that the U.S. will consume more oil and gas five years from now or that it will use less? The wise choice is to take the former bet rather than the latter.
Enbridge (ENB 0.02%) is one of the best-positioned companies to profit from increased oil and gas usage. The company's pipelines transport roughly 30% of the crude oil produced in North America and 20% of the natural gas consumed in the U.S. It also ranks as the largest natural gas utility in the U.S. based on volume.
NYSE: ENB
Key Data Points
Management has identified around $50 billion of growth opportunities through 2030. In particular, Enbridge projects strong natural gas demand in North America from industrial expansion and data centers. Those projections are trustworthy, in my view, especially considering that Enbridge's executive team has led the company to meet or beat financial guidance for 20 consecutive years.
This stock is also an income investor's dream. Enbridge's forward dividend yield is 5.4%. The company has increased its dividend for 31 consecutive years. That streak is likely to continue well into the future, with Enbridge projecting average annual earnings and distributable cash flow growth of around 5% beyond 2026.
