3 Dividend Stocks to Double Up on Right Now

Globe and Mail

3 days ago

Buy, sell, or hold? That's the question investors must continually ask about each stock in their portfolio.
The correct answer might be to sell if your original investing thesis has changed. In many cases, the best course of action is to simply stay the course. Sometimes, though, adding more to your position makes sense.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Every now and then, the smartest strategy is to back up the truck and load up on more shares. Here are three dividend stocks to double up on right now.
1. AbbVie
If there were a dividend hall of fame, I think AbbVie (NYSE: ABBV) should be in it. The major drugmaker is a Dividend King with 53 consecutive years of dividend increases. Since spinning off from Abbott in 2013, AbbVie has more than quadrupled its dividend payout. Its forward dividend yield currently tops 3.5%.
Why double up on AbbVie now? Its dividend is one reason. However, an even more compelling motivation is that the company's growth should accelerate nicely over the next few years.
AbbVie continues to be somewhat weighed down by the early 2023 loss of exclusivity for its then-top-selling drug, Humira. But the more time passes, Humira will have less of a drag on growth. Meanwhile, sales for the company's two successors to Humira -- Rinvoq and Skyrizi -- are soaring. AbbVie's pipeline also features several potentially solid growth drivers.
The main argument against investing more heavily in AbbVie stock now is probably the Trump administration's threats of tariffs on pharmaceutical imports to the U.S. and the implementation of a most-favored-nation drug pricing plan. I suspect, though, that these won't derail AbbVie's growth much, if at all, over the near term and will likely be non-issues in the long term.
2. Enterprise Products Partners
Want especially juicy income? Take a look at Enterprise Products Partners (NYSE: EPD). This master limited partnership (MLP) offers a forward distribution yield of 6.96%. Here's more good news: Enterprise has increased its distribution for 26 consecutive years.
Yes, this sky-high distribution is a key factor behind my including Enterprise Products Partners on the list of dividend stocks to double up on right now. The stock won't have to deliver much in the way of appreciation to generate a double-digit percentage total return.
I expect this midstream energy stock will provide nice growth, though. The U.S. is experiencing an explosion in the number of data centers, largely due to the breakneck adoption of artificial intelligence (AI). Many of these data centers will be powered by natural gas. That's great news for Enterprise Products Partners.
Domestic demand isn't the only growth driver for Enterprise Products Partners, either. As co-CEO Jim Teague said in the MLP's first-quarter earnings call, "The bottom line is the world needs U.S. oil, natural gas, and natural gas liquids to provide for their people and to grow their economies." He's right -- and much of those hydrocarbons will flow through Enterprise's pipelines.
3. Realty Income
Realty Income (NYSE: O) is listed third among the dividend stocks to double up on now, but it's only because I've listed the stocks alphabetically. There's a lot to like about this real estate investment trust (REIT).
For starters, Realty Income's forward dividend yield is 5.66%. The company distributes its dividend monthly. It has also increased its dividend for 30 consecutive years, with a total of 131 dividend hikes during that period.
If that's not enough to impress you, consider that Realty Income has generated a positive total operational return every year since its initial public offering in 1994. The stock's average total return since then is roughly 11%.
Realty Income's growth prospects look good, too. The REIT targets a total addressable market of $14 trillion. Around $8.5 trillion of that market is in Europe, where the company has only two major rivals.
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