Some investors might have been worried only a few weeks ago that the bull market was screeching to a halt. Those concerns should now be largely alleviated.
When you plan to hold stocks long-term, nearly any time is a good time to buy. I think that's especially true with stocks with great dividends since you get paid regardless of any short-term volatility. Here are three dividend stocks to own for the long run.
1. AbbVie
AbbVie (NYSE: ABBV) is one of the most successful biopharmaceutical companies on the planet. Its market cap hovers around $350 billion. AbbVie markets nine blockbuster drugs, including Humira, which ranked as the world's top-selling drug for years.
Of the thousands of publicly traded stocks, only 53 have increased their dividends for 50 or more years and therefore qualify as Dividend Kings. AbbVie is in this exclusive club with its track record of 52 consecutive dividend hikes. The drugmaker's forward dividend yield stands at 3.14%.
Humira's sales began to decline last year as biosimilar rivals entered the U.S. market. However, I think the way AbbVie has handled the loss of patent exclusivity for its top drug underscores why this stock is a great one to own over the long term.
AbbVie invested heavily in research and development and made strategic acquisitions in preparation for Humira's eventual patent expiration. It now has two autoimmune disease drugs that should together eclipse Humira's peak annual sales. The company also has a solid lineup of other winners and a promising pipeline.
Like all drugmakers, AbbVie will face patent cliffs from time to time. However, the company has shown that it can successfully navigate these challenges.
2. Lowe's Companies
Lowe's Companies (NYSE: LOW) runs over 1,700 home improvement stores in the U.S. It's the world's second-largest home improvement retailer trailing behind only The Home Depot.
Like AbbVie, Lowe's is a member of the Dividend Kings. The company has increased its dividend by 51 consecutive years and has paid a dividend every quarter since going public in 1961. Its forward dividend yield is 1.85%.
I think an interest rate cut by the Federal Reserve (which seems increasingly likely) will provide a catalyst for Lowe's stock. Lower interest rates will make it less costly for homeowners to borrow to fix up their houses and motivate more people to buy new homes (and have to make improvements to their existing houses).
Lowe's should be a great stock to own over the long term for one simple reason: Homes will always need to be fixed up. That's especially true considering the median age of a house in the U.S. is over 40 years old.
3. United Parcel Service
United Parcel Service (NYSE: UPS) is the world's largest package delivery company. Last year, it delivered 22.3 million packages per day on average. UPS is also a leader in the supply chain management market.
No, UPS isn't a Dividend King like AbbVie and Lowe's. However, the company has never cut its dividend since going public in 1999. It also offers a high forward dividend yield of nearly 5.1%.
I like UPS over the near term because it's poised for a turnaround. U.S. volume growth returned in Q2 for the first time in nine quarters. The company expects earnings to increase in the second half of 2024.
More importantly, though, I like UPS as a stock to buy and hold over the long term. There will always be a need for delivering packages. UPS has a solid moat with the scale of its operations that would be difficult and highly expensive for a rival to replicate.
Should you invest $1,000 in AbbVie right now?
Before you buy stock in AbbVie, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AbbVie wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $786,169!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of August 26, 2024
Keith Speights has positions in AbbVie, Lowe's Companies, and United Parcel Service. The Motley Fool has positions in and recommends Home Depot. The Motley Fool recommends Lowe's Companies and United Parcel Service. The Motley Fool has a disclosure policy.
Bull Market Buys: 3 Dividend Stocks to Own for the Long Run was originally published by The Motley Fool