Investors seeking consistent income and long-term growth should consider dividend stocks, which offer a unique opportunity to amplify returns over time. However, not all dividend stocks are created equal, and it’s crucial to evaluate the underlying business to ensure it aligns with your portfolio objectives. The best dividend stocks boast a history of paying and increasing dividends, backed by strong businesses that can sustain these payouts.
Two top dividend stocks worth considering are AbbVie (NYSE: ABBV) and Kraft Heinz (NASDAQ: KHC). AbbVie, a spin-off from healthcare giant Abbott Laboratories, has inherited its parent company’s 52-year history of consecutive dividend increases. With a current yield of around 3.1%, AbbVie’s annual dividend stands at approximately $6.20 per share. Over the past five years, the company’s dividend has risen by around 45%. Despite facing challenges from the loss of patent exclusivity on Humira, AbbVie’s diverse portfolio and robust pipeline position it for continued growth.
In the second quarter of 2024, AbbVie reported net revenue of $14.5 billion, up 4.3% from the prior year. Top-selling products like Skyrizi, Rinvoq, and Venclexta drove revenue growth, with Elahere, a newly acquired drug, expected to contribute $500 million in sales in 2024 and potentially reaching peak annual sales of $2 billion by the end of the decade. With a strong track record of profitability and a commitment to its dividend, AbbVie is an attractive option for income investors and those seeking long-term growth.
Kraft Heinz, formed through the merger of H.J. Heinz Company and Kraft Foods in 2015, boasts a rich history of iconic brands like Kraft, Heinz, Velveeta, and Jell-O. Although the company has faced challenges, including a dividend cut and accounting scandals, it has made significant progress in recent years. With a generous dividend yield of 4.6%, Kraft Heinz offers a attractive income stream for long-term shareholders. The company’s forward annual dividend stands at $1.60 per share, and its modest valuation of 1.7 on a price-to-sales basis makes it an appealing option.
Despite facing headwinds from consumer spending patterns, Kraft Heinz remains profitable, reporting net income of nearly $2 billion on revenue of $26 billion over the trailing 12 months. The company’s efforts to rework and rebrand its portfolio of well-known brands position it for future growth. With Warren Buffett’s Berkshire Hathaway holding a significant stake in the business, Kraft Heinz is a dividend stock worth considering for its storied brand lineup and attractive income yield.
Leave a Reply