3 High-Yield Dividend Stocks That Still Look Like Bargains

The broader stock market benchmarks keep reaching new heights, but the S&P 500 index's ongoing bull run has been driven heavily by its largest components. That means there are still plenty of reliable dividend-paying stocks that look like bargains.

Shares of Johnson & Johnson (NYSE: JNJ) , Agree Realty (NYSE: ADC) , and AbbVie (NYSE: ABBV) offer enticing dividend yields at recent prices -- and they could raise their payouts much higher by the time you're ready to retire.

1. Johnson & Johnson

Last year, Johnson & Johnson spun off its consumer goods division, which housed many of the legendary brands that most people associate with the company. These days, J&J is focused on its more lucrative pharmaceutical and medical technology businesses.

The company reports second-quarter results on Wednesday, but we can already see the separation working as intended. In the first quarter, its medical technology unit's sales rose 6.5% year over year after adjusting for unfavorable changes in currency exchange rates.

By some measures, pharmaceutical sales were even stronger -- though with an important caveat. Excluding its COVID-19 vaccine sales, first-quarter pharmaceutical sales rose 8.3% year over year.

Dividend programs are rarely more reliable than Johnson & Johnson's. In April, the company raised its quarterly payout for the 62nd consecutive year.

At recent share prices, it offers a 3.3% yield, and rising pharma sales could help it raise its payout rapidly in the years ahead. Two of the company's recently launched cancer drugs, Tecvayli and Carvykti, produced first-quarter sales that more than doubled year over year.

2. Agree Realty

Agree Realty is a real estate investment trust ( REIT ) with tenants that largely operate in recession-resistant industries. It generally insists those tenants sign long-term net leases that make them responsible for the variable costs associated with building ownership, such as taxes and maintenance.

With rent escalators built into those long-term leases, Agree Realty produces highly reliable cash flows. It switched from quarterly to monthly dividend payouts in 2021. Its annualized payout, though, has risen steadily since 2011.

At recent share prices, Agree Realty offers a 4.7% dividend yield. The stock has been beaten down because higher interest rates make it more expensive to grow its portfolio of properties, but it looks like a smart buy now because the REIT is well-positioned to grow despite the challenge.

In the first quarter, it acquired 31 properties spread across 22 states. In May, it expanded its liquidity position to more than $1.3 billion so it can keep on expanding its footprint.

3. AbbVie

AbbVie began as the pharmaceutical division of Abbott Laboratories , but was spun off in 2013. Investors who have held on to AbbVie shares since their inception have seen their dividend payouts soar by 287%. At recent prices, the shares offer a 3.6% yield.

Despite rapid payout hikes in the recent past, AbbVie's share price has been under pressure due to declining sales of its former lead drug, Humira. After it lost patent-protected market exclusivity in 2023, its sales plunged. In 2024's first quarter, U.S. Humira sales fell 39.9% year over year to $1.8 billion.

Now that domestic Humira sales are responsible for just 14% of total revenue, offsetting further declines should be easier to manage. For years, AbbVie reinvested its Humira profits with a great deal of success.

In 2019, AbbVie launched two new treatments -- Skyrizi and Rinvoq -- that between them target most of the conditions that Humira is prescribed for, and their sales alone are offsetting the older drug's decline. Combined sales of Rinvoq and Skyrizi reached $3.1 billion in the first quarter.

In 2027, AbbVie expects combined Rinvoq and Skyrizi sales to exceed $27 billion -- but they're not the company's only growth drivers. Adding some shares of this reliable dividend grower to your portfolio could lead to huge returns on your investment down the road.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy .