It's always a good time to buy solid dividend stocks, but considering the challenging economic environment, now might be a particularly opportune time. Dividend-paying companies tend to have strong underlying operations and are generally more resilient than their non-dividend-paying counterparts. With a volatile equity market and a potential recession looming due to the impact of tariffs, dividend stocks can help strengthen any portfolio.
With that as a backdrop, let's consider four excellent income stocks that investors can buy amid the current sell-off: AbbVie(NYSE: ABBV), Amgen(NASDAQ: AMGN), Bristol Myers Squibb(NYSE: BMY), and Zoetis(NYSE: ZTS).
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1. AbbVie
AbbVie is a leading drugmaker best known for its work in immunology. The company has encountered some issues in recent years, including a major patent cliff and a clinical setback for a product many thought looked promising. However, AbbVie's financial results remain solid. Thanks to medicines such as Skyrizi and Rinvoq, which treat a range of autoimmune conditions, AbbVie's revenue is moving in the right direction.
AbbVie's management has long predicted that Skyrizi and Rinvoq will help drive top-line growth well into the 2030s. As evidence of these medicines' incredible performance, AbbVie recently increased its 2027 guidance for the duo by $4 billion to more than $31 billion. The company does have other weapons in its arsenal.
Newer products, like migraine treatment Qulipta, should have a meaningful impact, while older franchises, such as Botox, continue to make solid contributions. AbbVie also has a deep pipeline of candidates.
Lastly, the company's dividend program looks impressive, considering it has had 53 consecutive years of payout increases (including its time as part of Abbott Laboratories) -- and there's no reason to think that won't continue. AbbVie's forward yield of 3.9% is well above the S&P 500's average of 1.3%.
2. Amgen
Amgen's shares fell late last year when its leading weight loss candidate, MariTide, did not perform as well as expected in a phase 2 clinical trial. However, MariTide still looks likely to be a somewhat successful weight management medicine, and Amgen has much more than just that going its way. The company's lineup features many prominent products, including over 10 blockbuster drugs. Several of its medicines are expected to be key growth drivers for the foreseeable future.
The drugmaker's asthma medicine, Tezspire, which it shares the rights to with AstraZeneca, is a good example. The company also markets the only U.S. Food and Drug Administration (FDA)-approved medicine for thyroid eye disease, Tepezza. Amgen's revenue and earnings are moving in the right direction and look more than strong enough to support its dividend program. Since initiating a dividend in 2011, the company has increased its payouts by 750%. Its forward yield tops 3.5%.
Amgen should continue rewarding shareholders with dividend increases for a long time.
3. Bristol Myers Squibb
Bristol Myers has also encountered significant patent cliffs in recent years, and more are on the way. Two of the company's best-selling medicines, Opdivo and Eliquis, will lose patent exclusivity by the end of the decade. Bristol Myers will give up billions in sales to biosimilars for these two drugs, but the company should still be fine. It survived its latest one thanks to a slew of new approvals.
Many of Bristol Myers' newer medicines have yet to reach their peak and are expected to continue growing their sales for a long time. That's the case with Reblozyl, a medication for anemia in patients with beta thalassemia (a blood-related disease), and Opdualag, a cancer medicine; both should be meaningful growth drivers. The company will continue to launch others as well. While the stock has not performed well in the past three years, it still looks like a top pick for long-term, income-seeking investors.
Bristol Myers has increased its dividend by just under 68% over the past decade and offers a juicy yield of 5.1%. Patience will be rewarded for those who hold onto the stock.
4. Zoetis
Zoetis is the world's leading animal health company. It did not start the year on a strong note due to disappointing guidance and mounting competition for one of its key growth drivers, Apoquel, a medicine used to treat allergic itch in dogs. However, Zoetis' track record is quite impressive. The company boasts 15 products that generate over $100 million in annual sales, and has a portfolio with about 300 product lines across several therapeutic areas. It has consistently increased its revenue and earnings at a rate faster than the industry average.
The past might not guarantee future success, but it does say something about Zoetis' underlying business. Further, the company should be able to overcome its current obstacle. Apoquel still has plenty of room to grow its market share, despite competition, and Zoetis will rely on other new approvals to drive top-line growth. These include Solensia and Librela, which treat osteoarthritis pain in cats and dogs, respectively.
Zoetis will also continue to launch new medicines. Its business looks more than robust enough to support its dividend. Zoetis has increased its payouts by about 500% in the past 10 years. Though its 1.4% yield isn't impressive, Zoetis won't disappoint dividend seekers with payout cuts or suspensions.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Amgen, Bristol Myers Squibb, and Zoetis. The Motley Fool has a disclosure policy.
