Three Exceptional Dividend- generative Shares to Purchase in November
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Is a high dividend yield a cause for concern for investors in some instances? Indeed, but not always. There are certain stocks out there that offer relatively secure dividends with exceptionally high yields, either temporarily or due to the nature of their business operations. Identifying which ones are risky and which present opportunities is the challenge.
For your consideration, three Fool.com contributors have curated reports on some promising prospects. They believe that AbbVie (ABBV, 2.37%), Gilead Sciences (GILD, 1.62%), and Pfizer (PFE, 2.29%) are outstanding high-yield dividend stocks to consider purchasing in November.
A versatile dividend and growth investment
David Jagielski (AbbVie): AbbVie, a prominent drugmaker, is a strong pick for any investor looking for a high dividend yield. Its dividend yield of 3.2% surpasses the average, and it has consistently increased its dividend payouts over the years.
Last week, AbbVie reported robust earnings, and it announced an additional increase in its dividend. The new quarterly dividend of $1.64 per share marks a 5.8% boost in the payout. Since its spin-off from Abbott Laboratories in 2013, AbbVie's quarterly dividend has increased an astounding 310%.
Beyond the dividend, there's plenty of value for investors in AbbVie. Not only is its dividend likely to continue growing in the coming years, but so too will its top and bottom lines.
Over the past nine months, the company has achieved $41.2 billion in sales, up 3% from the same period a year ago. This growth might seem unremarkable given the challenges AbbVie has faced with Humira, one of its top-selling drugs, losing patent protection and seeing a 34% dip in sales this year. However, AbbVie's robust diversification has enabled it to weather these storms and achieve positive growth.
Through acquisitions in recent years, AbbVie has bolstered its portfolio. The stock currently trades at a reasonable forward price-to-earnings multiple of 17, making it a tempting option for both growth and dividend investors.
A durable high-yield dividend opportunity
Prosper Junior Bakiny (Gilead Sciences): While a high yield may not carry much weight if the company behind it is likely to cut its payouts, Gilead Sciences investors need not worry on that front.
Although the past few years have not been smooth sailing for the drugmaker, with unexpected regulatory challenges and pandemic-related disruptions, it has continued to raise its dividends. Gilead Sciences' dividend payouts have surged by 22.2% since late 2019, and its forward yield stands at 3.4%, well above the S&P 500's average of 1.3%.
A company's ability to boost its dividends amid significant issues is a testament to its operational strength. Even in the face of difficulties, Gilead Sciences has managed to maintain its revenue, thanks in part to Veklury, a COVID-19 therapy medicine it developed.
Elsewhere, Gilead Sciences continues to lead the HIV drug market with therapies like Biktarvy, the top-prescribed HIV regimen in the U.S., holding a market share of more than 49%.
In oncology, Gilead Sciences remains a trailblazer. Its long-term strategy is to significantly advance into the oncology field. More than half of its 52 clinical programs are new cancer drugs in development or existing ones seeking label expansions.
Of course, Gilead Sciences has many promising initiatives in other areas, including HIV. The company is demonstrating its commitment to inventing innovative drugs, delivering strong financial results, and rewarding shareholders with dividend hikes, which is why Gilead Sciences is a robust, high-yield income stock to buy this month.
A generous dividend with compelling value
Keith Speights (Pfizer): Investors seeking an especially generous dividend should consider Pfizer, a leading drugmaker with an impressive yield of 6.1%. Pfizer prioritizes maintaining and growing its dividend, with a strong likelihood of achieving that goal.
While Pfizer's dividend is attractive, it's not the only reason to consider investing in the pharmaceutical giant. The stock trades at a modest forward price-to-earnings multiple of 9.2, far less than the S&P 500 healthcare sector's forward earnings multiple of 18.3. Pfizer's PEG ratio, according to LSEG, stands at a low 0.72.
Growth might seem challenging given Pfizer's approaching loss of patent exclusivity for several top drugs within the next few years. However, the situation isn't as dire as it may seem.
Pfizer's portfolio includes numerous rising stars, such as migraine therapy Nurtec ODT, eczema drug Cibinqo, and alopecia areata pill Litfulo. Even COVID-19 antiviral therapy Paxlovid has once again emerged as a significant winner for the company. Pfizer also sees significant potential growth in its respiratory syncytial virus (RSV) vaccine Abrysvo.
In conclusion, while a high dividend yield can sometimes raise concerns, it's not always the case for select stocks. AbbVie, Gilead Sciences, and Pfizer are three such stocks with high yields but are solid choices for investors.
Don't disregard Pfizer's work pipeline, either. The organization boasts 108 projects undergoing clinical trials, with 30 of them in the advanced stages of testing.
After identifying the promising high-yield dividend stocks, investors might consider allocating some of their finance to diversify their portfolio. For instance, AbbVie's robust performance and consistent dividend growth make it an appealing choice for those seeking a versatile dividend and growth investment.
Moreover, Gilead Sciences, with its durable high-yield dividend, has demonstrated its ability to maintain payouts even during challenging times, offering potential investors a reliable income source.
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