There’s just something comforting about a stock that pays you to own it. That’s especially the case amid the current overall stock market volatility.
I’m talking, of course, about dividend stocks. Well over 4,000 stocks traded on U.S. exchanges offer dividends. But some are better than others. Here are three dividend stocks to buy hand over fist in November.
Perhaps the most important thing to know about AbbVie (ABBV -0.82%) is that it’s a Dividend King. This distinction applies only to S&P 500 members that have increased their dividends annually for at least 50 consecutive years. AbbVie’s streak of dividend hikes now stands at 51 years in a row after the company’s latest dividend increase was announced last week.
The dividend yield of over 4% isn’t the only thing to like. The big pharma stock has handily outperformed the broader market so far this year as well.
But sales for AbbVie’s top-selling drug, Humira, are about to decline with biosimilars hitting the U.S. market in 2023. Why buy the stock now with this bad news right around the corner?
For one thing, the market has already largely baked Humira’s loss of exclusivity into AbbVie’s share price. Also, the company’s two successors to Humira (Rinvoq and Skyrizi) are beating sales expectations. Management believes these two autoimmune-disease drugs will top Humira’s peak annual sales within a few years.
Next year will likely be the trough year for AbbVie’s earnings. The company should be able to deliver solid revenue and earnings growth throughout the rest of the decade. Long-term investors should enjoy solid returns from this resilient stock.
2. Brookfield Renewable
The company currently operates hydroelectric, wind, solar, and distributed energy facilities that generate around 23 gigawatts of power for roughly 30 markets in 20 countries. It has a near-term development capacity of an additional 11.8 gigawatts, with much larger long-term development capacity.
Brookfield Renewable’s growth prospects are outstanding. Governments and corporations across the world have established ambitious goals to reduce carbon emissions. The demand for renewable energy will almost certainly increase significantly for years to come as a result.
The future for Brookfield Renewable is getting even brighter thanks to key acquisitions. In September, the company announced its acquisition of Scout Clean Energy for $1 billion. In October, Brookfield Renewable and Cameco teamed up to acquire nuclear power provider Westinghouse Electric.
3. Devon Energy
Devon Energy (DVN 1.76%) is listed third alphabetically here, but there’s a strong case to be made that it’s the most appealing of these three dividend stocks right now. It has certainly been the biggest winner so far this year, with shares skyrocketing more than 70% as of Oct. 31.
In addition, Devon offers an especially juicy dividend yield of close to 8.2%. The oil and gas producer has a unique fixed-plus-variable dividend program with a payout that has more than tripled since the second quarter of 2021.
Devon also continues to use its growing fortunes to reward shareholders in other ways. The company has a $2 billion stock buyback program in place. It’s also paying down debt.
Even though Devon has delivered a huge gain this year, the stock is arguably wildly undervalued. Its shares currently trade at only 7.7 times the estimated 2022 free cash flow. This valuation is much more attractive than that of the S&P 500. Devon is a bargain high-yield dividend stock that should have more room to run.
Keith Speights has positions in AbbVie, Brookfield Renewable Corporation Inc., Brookfield Renewable Partners L.P., and Devon Energy. The Motley Fool has positions in and recommends Brookfield Renewable Corporation Inc. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.