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With equity markets in shambles due to President Donald Trump's trade policies, now might be as good a time as any to invest in excellent dividend stocks.
For one, dividend-paying companies tend to be more resilient than their non-dividend-paying peers. They are more likely to emerge from challenging economic periods in one piece. Second, their regular payouts can help smooth out losses during a downturn. That's precisely what some investors are looking for in this uncertain environment.
With that said, let's consider two top dividend stocks that should navigate the current storm relatively well and continue performing long after: AbbVie (NYSE: ABBV) and Gilead Sciences (NASDAQ: GILD).
1. AbbVie
AbbVie went public in 2013, splitting from its former parent company, Abbott Laboratories. Since then, the drugmaker has produced market-beating returns.
More importantly, the stock has the qualities of a forever investment. AbbVie consistently develops newer medicines to replace older, off-patent ones. It recently successfully navigated the most significant patent cliff in the history of the pharmaceutical industry. The company's rheumatoid arthritis drug Humira, the most lucrative therapy ever, lost U.S. patent exclusivity in early 2023. AbbVie returned to top-line growth last year, and investors can expect it to maintain that momentum.
The drugmaker expects its two immunology superstars, Skyrizi and Rinvoq, to generate about $31 billion in sales by 2027 (they should rack up about $24 billion this year). Humira's sales peaked at $21.2 billion. Further, Skyrizi and Rinvoq should continue their northbound trajectory well into the next decade. These two medicines are more than filling Humira's shoes.
They will eventually run out of patent protection, but AbbVie can handle the most serious patent cliffs as it did with Humira. The company does have other growth drivers -- including its Botox franchise -- not to mention a deep pipeline.
What about its dividend? When counting the time it spent under Abbott Laboratories, AbbVie has increased its payouts for 53 consecutive years. It's not like the drugmaker has been slacking off since 2013, either; its payouts have grown by 310% since its IPO. The stock offers a juicy forward yield of 3.5% and a reasonable cash payout ratio of just under 62%.
AbbVie looks like a fantastic dividend stock to buy and hold for a long time.
2. Gilead Sciences
Gilead Sciences is a leading biotech company that develops products across several therapeutic areas. The company is best known for its work in the HIV drug market, where it is arguably the leader. Last year, Gilead's Biktarvy -- the top-selling HIV regimen in the U.S. -- generated $13.4 billion in sales, 13% higher than the previous fiscal year. Descovy, used for the treatment and prevention of HIV (a leader in the PrEP niche) racked up $2.1 billion in sales, an increase of 6%.