2 Unstoppable Dividend Stocks to Buy Right Now for Under $200

Investing in the stock market, regardless of the economic context, can help you achieve your long-term financial goals. While the recent volatility in stocks challenges some investors, simple methods like dollar cost averaging can prove incredibly effective in a wide range of market environments. Another great way to navigate uncertain times is to invest in dividend stocks.

Dividend stocks can be a great way to increase your portfolio’s yield by generating additional income beyond just stock price appreciation. However, the beauty of dividends is their flexibility: you can use your dividend income however you see fit — you can save it, use it to fund your monthly expenses, or simply reinvest as you see fit.

So if you’re looking for great dividend stocks to buy for under $200 per share, here are two names to consider.

1. Medtronic

Medtronic (NYSE: MDT) is a leading manufacturer of medical devices globally. Its products include pacemakers, insulin pumps, insulin pens and continuous glucose monitoring devices to name a few of the medical devices it manufactures.

The company has a storied history of honoring dividend payments and has increased its dividend every year for 46 years — and counting. Medtronic currently pays out about 93% of its earnings as dividends. The stock boasts a forward annual dividend rate of $2.80 per share, yielding roughly 3% at current share price levels.

In the past 12 months, the company has made profits of about $4 billion on revenue of about $33 billion, with operating cash flow of nearly $7 billion. As a result, cash on hand remains close to $8 billion at the end of the most recent quarter.

Looking at Medtronic’s most recent quarter, which also happens to be its first quarter for fiscal 2025, the peak growth was 3% year-over-year. However, its net profit rose 32% from a year ago to just over $1 billion. A 6% increase in revenue in the cardiovascular product portfolio and a 12% increase in the diabetes product portfolio drove these growth numbers.

While medical device businesses might not be the most exciting portfolio additions, companies like Medtronic are mainstays in industries that tend to be much more resilient to economic changes than companies in more cyclical spaces. Medtronic has struggled with growth in recent years, which is reflected in its modest share price, although its dividend has been consistent. This could present an opportunity to buy shares in a potentially undervalued business with a price-to-sales (P/S) ratio of less than 4 that not only offers a strong value proposition to its broad customer base, but can provide consistent income for your portfolio over the long term.

The story continues

2. Target

Aim (NYSE: TGT) has an even more impressive dividend history than the top pick on today’s list. Not only will the retail giant’s third-quarter dividend mark its 228th consecutive dividend paid since 1967, when it went public, but it’s also on track for its 53rd consecutive year of dividend increases. Target returns of approximately 3% for investors based on current share prices, with a forward annual dividend of $4.48 per share. The company currently pays out just 46% of earnings to investors as dividends.

Target has had its share of challenges in recent years. During the height of pandemic shopping, the well-known brick-and-mortar retailer thrived with successive expansion into e-commerce, easy pickup and delivery options, and a diverse range of products that addressed the full range of consumer needs. The considerable variety of products that Target offers is still a healthy value proposition for consumers.

However, a slowdown in growth compared to pandemic levels, changing consumer shopping patterns, supply chain issues and increased retail theft have all had a negative impact on growth. The company was also left with excess inventory levels after inflation lowered the rate of consumer spending, forcing it to cut back heavily, another move that squeezed margins and profitability.

The good news is that Target seems to be slowly but surely getting back on track. In its recent financial report for the second quarter, the company reported that total revenue of about $26 billion rose 2.7% from a year ago, while comparable sales rose 2% year-over-year per year. Digital sales are a robust growth segment for the company, with year-over-year growth in this business coming in at 8.7% for the quarter.

Target is still profitable, and its underlying growth is significantly outpacing its top-line earnings. It reported operating income of $1.6 billion in the three-month period, up 36.6 percent from a year ago. Net income rose 43% year over year to $1.2 billion. In the short term, Target will likely have to deal with volatile consumer spending patterns and normalizing growth rates from its steep rise and fall during the pandemic. Regardless, the company still looks like a solid choice for income investors making a long-term buy-and-hold investment.

Should you invest $1,000 in Medtronic right now?

Before buying stock in Medtronic, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Medtronic was not 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 would have $729,857!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

See the 10 stocks »

*The stock advisor returns starting September 9, 2024

Rachel Warren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool recommends Medtronic and recommends the following options: Long January 2026 $75 calls on Medtronic and Short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.

2 Unstoppable Dividend Stocks to Buy Right Now for Under $200 was originally published by The Motley Fool