Three Unwavering Dividend-Increase Stocks Offering Over 3% Yield, Which Income-Oriented Investors Prefer to Acquire in 2025 and Maintain Permanently
Investors seeking a steady, dependable source of passive income ought to ponder the healthcare sector, where spending patterns remain consistent, even amid economic fluctuations. In 2023, national health expenditures surged by an impressive 7.5% to a whopping $4.9 trillion.
Three companies riding this positive trend are making headlines: AbbVie (ABBV 0.61%), Johnson & Johnson (JNJ 0.76%), and Medtronic (MDT 0.34%). These firms boast substantial positions in the pharmaceutical and medical technology sectors, as well as dividend yields that outperform the typical stock in the S&P 500 index. Plus, each has a robust history of dividend increases.
1. AbbVie
Existing as a separate entity since its spin-off from Abbott Laboratories in 2013, AbbVie has carried on Abbott's tradition of raising dividends over the decades. In fact, its dividend growth spiked by an astounding 310% since then. At present, it offers shareholders a 3.8% yield.
Although AbbVie's dividend growth pace slowed due to the expiration of Humira's patent protection, two treatments that debuted in 2019 are filling the gap. Collective sales for Skyrizi, a psoriasis cure, and Rinvoq, an arthritis treatment, skyrocketed to an annualized $19.3 billion in the third quarter.
Furthermore, two other up-and-coming drugs in AbbVie's portfolio - Elahere, an ovarian cancer therapy - are rapidly gaining traction, driving sales close to $2 billion annually. With the worst Humira-related losses now behind it, AbbVie expects a sustained growth rate in the high-single digits through 2029.
2. Johnson & Johnson
At the helm of cutting-edge medical technology and pharmaceutical products, Johnson & Johnson (JNJ) has distanced itself from traditional consumer goods. Apart from a less-than-blazing pace of dividend increases compared to AbbVie, it's managed to deliver a 77% dividend boost across the past ten years. At present, the yield stands at 3.4%.
The recent approval of a lung cancer therapy - Lazcluze, in combination with Rybrevant - has sparked investor optimism about additional dividend raises. Data shows this therapy outperforming existing treatments, prompting a projected median overall survival improvement of over one year.
3. Medtronic
Medtronic stock doesn’t just satisfy dividend hunters; it’s the dream come true for long-term investors. With a 3.2% yield, Medtronic shares have seen their payouts grow for 47 straight years. The medical technology specialist delivers top-notch devices like replacement heart valves, nervous system stimulators, and pacemakers.
A recent approval of a first-in-class pulsed field and radiofrequency ablation catheter from Medtronic has opened doors for enhanced growth prospects. In contrast, J&J had to halt this device's sales due to complications.
Notably, Medtronic recently received European approval for the world's only closed-loop deep brain stimulation device for patients with Parkinson's disease, further bolstering its standing within the industry.
These three prominent players in the healthcare sector not only show potential for growth but also maintain steady or increasing dividends. By carefully considering which stock piques your interest, you can make an informed choice that meets your overall investment objectives and appetite for risk.
After observing the impressive growth in national health expenditures, investors interested in dividend-focused investments might consider AbbVie. The company, with a 3.8% yield, has a robust history of dividend increases and expects a sustained growth rate in the high-single digits. (AbbVie)
Johnson & Johnson, known for its medical technology and pharmaceutical products, offers a 3.4% yield and has delivered a significant 77% dividend boost over the last decade. The recent approval of a lung cancer therapy has sparked optimism about additional dividend raises in the future. (Johnson & Johnson)