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Dividend stocks are a favorite among investors for good reason. They provide a steady income stream and offer a promising avenue for total return. Total return, a comprehensive measure of investment performance, encompasses interest, capital gains, dividends, and distributions realized over time.
For example, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.
When selecting stocks for their portfolios, one critical aspect for growth and income investors is the safety and security of a company's dividend and the prospect for a dividend that increases regularly. We decided to screen top blue-chip companies, looking for those that will be increasing their dividends not only this year but beyond.
Many of the companies we examined are proud members of the Dividend Aristocrats and the Dividend Kings , both of which we have covered for years here at 24/7 Wall St. The Dividend Aristocrats have raised their dividends for 25 consecutive years and are members of the S&P 500, while the Dividend Kings for 50 years or more. Dividend investors should grab this free report today.
Why do we cover dividend stocks?
Dividend stocks provide investors with reliable streams of passive income. Passive income is characterized by its ability to generate revenue without requiring the earner's continuous active effort, making it a desirable financial strategy for those seeking to diversify their income streams or achieve financial independence.
Drug Giant AbbVie is a spin off from Abbott Laboratories
AbbVie is ranked sixth on the list of largest biomedical companies by revenue.
Abbott Laboratories Inc. ( NYSE: ABT ) announced in October 2011 that it was separating into two independent companies as its businesses evolved into two different investment identities. AbbVie Inc. ( NYSE: ABBV ) is a research-based specialty biopharmaceutical company with a broad portfolio of medicines, including leadership in immunology and virology, and a pipeline of breakthrough therapies.
Abbott remains one of the largest science-based, diversified healthcare companies, with market-leading offerings in diagnostics, medical devices, nutritional, and branded generic pharmaceuticals.
The massive spin-off was completed in January of 2013. AbbVie has delivered very solid growth since the spin-off. With blockbuster drugs like Humira, the company grew revenue and adjusted EPS by 14% and 18%, respectively, from 2013 to 2022.
AbbVie is a Dividend Aristocrat and a Dividend King
AbbVie is one of a handful of companies that are in both categories.
The Dividend Aristocrats have raised their dividend each year for at least 25 years.
- Companies must be worth at least $3 billion each quarterly rebalancing
- Average daily volume of at least $5 million transactions for every trailing three-month period at every quarterly rebalancing date
- Be a member of the S&P 500
The Dividend Kings are 53 companies that have not just raised their dividends but have done so for 50 consecutive years or more, demonstrating a level of reliability and trust that investors can count on.
Since its inception in 2013, the company has increased its dividend by more than 285%.
We predict AbbVie's dividend payout will increase in 2025
AbbVie's current streak of consecutive dividend increases stands at 52 years.
We screened the dividend increase for AbbVie every year since the spin-off was completed in 2013. Invariably the company raises the dividend in January of each new year. In January of 2024, the company raised the dividend 4.72% from $1.48 per share to $1.55 per share. Assuming another increase of a similar size, the dividend should jump from $1.55 per share in January of 2025 to $1.62 per share.
The stock currently pays a very solid 3.35% dividend quarterly. The most recent dividend was declared on June 20 for shareholders of record on July 15, and it will be paid out on August 15.
The future looks bright for AbbVie shareholders
AbbVie's analyst rating consensus is a Strong Buy. This is based on the ratings of 15 Wall Street analysts.
The corporate mission hasn't wavered since the company's beginning over ten years ago. AbbVie's combined focus on innovation and commercial scale brings differentiated products to market that benefit patients, customers, and healthcare providers. One of the biggest concerns with AbbVie is what might eventually happen with the anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded.
The company was concerned , so in June 2019, it announced it had agreed to pay $63 billion to buy rival drugmaker Allergan. This was the latest merger in an industry where some of the biggest companies have been willing to pay a high price to resolve questions about their future growth.
With a robust pipeline, a clear vision for the future, and an outstanding and reliable dividend, the stock is a strong buy for growth and income investors, especially on any big pullback that lifts the dividend above the 4% level.
Six Dividend Kings That Offer Investors a Passive Income Home Run
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