3 Dividend Stocks to Double Right Now

Many people think that dividend-paying stocks are great for retirees, and that’s certainly true. If you’re a retiree with a stock portfolio totaling $500,000 and it has a total dividend yield of, say, 4%, you’ll collect about $20,000 in income annually — without having to sell any stocks! Better yet, healthy and growing dividend payers tend to increase their payouts over time, so the income may even keep pace with inflation.

But dividend-paying stocks are also great for people who are far from retirement. Let’s say your $300,000 portfolio has a total return of 4% — that’s $12,000 in annual income that just shows up in your investment account. You may not need it to pay for living expenses, but you can reinvest those dividends — using them to buy additional shares. So while you may only add $10,000 to your investment accounts this year, your dividends will contribute $12,000. Dividends can be powerful portfolio boosters.

So here are three solid dividend payers to consider.

1. Pfizer

Pfizer (NYSE: PFE) is being unfairly ignored by some investors because they assume its glory days of providing highly sought-after COVID-19 vaccines are over. That’s partially true, but Pfizer has more work to do. First, the low share price (recently down about 51% since the end of 2021) has increased its dividend yield to a recent 5.7%. Even better, CEO Albert Bourla said that “I want to reinforce our commitment to maintain and grow the dividend over time.”

Pfizer’s future is promising as it has a large number of drugs in development, including an anti-obesity drug. Its 2023 acquisition of Seagen for $43 billion adds more cancer drugs to its portfolio and pipeline.

2. Medtronic

Medtronic (NYSE: MDT) is a giant in the medical device arena with a recent market value exceeding $100 billion. In the fourth quarter, the company announced revenue up 5.6% year over year and “a strategic collaboration with Nvidia to accelerate AI innovation for healthcare.”

The stock’s dividend has recently yielded a solid 3.5% — though it may not grow as quickly as other dividends. However, the stock itself appears undervalued and is therefore likely to appreciate in value over the coming years. For example, its forward price-to-earnings (P/E) ratio of 14.9 is well below the five-year average of 17.9.

However, you need to consider the whole deal, not just the price. Medtronic boasts more than 46,000 active patents and more than 214 active clinical trials. Its offerings address more than 70 health conditions and it specializes in products such as cardiac devices, surgical robotics, insulin pumps, surgical instruments and patient monitoring systems. Medtronic is cutting costs, and CFO Karen Parkhill says, “We’re encouraged by the recovery we’re seeing in many of our markets, our product availability is improving, we like our competitive positions within our businesses, and we have a lot of new, innovative. products coming to market”.

The story continues

3. Comcast

Comcasthis (NASDAQ: CMCSA) the investment proposition may be a little less compelling as the company faces some headwinds. But its valuation takes much of that into account, with the company’s recent price-to-earnings (P/E) ratio of 9.3 well below its five-year average of 12.5.

The company’s second quarter reported top-line earnings of $1.21 per share, up 7% year-over-year. That’s promising, but the company’s top line, its revenue, fell 2.7 percent to $29.7 billion. Comcast faces a sizable debt load and tough competition in wireless and streaming.

However, Comcast’s dividend recently yielded 3.2%, and its payout ratio (the percentage of earnings paid out in dividends) was recently a reasonable 32%. If you are bullish on and invested in this company that spans residential connectivity, theme parks, NBCUniversal TV, Universal Pictures and more, plan to keep an eye on it.

Take a closer look at any of these companies that interest you and know that there are many other solid dividend-focused investments out there.

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Selena Maranjian has positions in Medtronic, Nvidia and Pfizer. The Motley Fool has positions in and recommends Nvidia and Pfizer. The Motley Fool recommends Comcast and 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.

3 Dividend Stocks to Double Right Now was originally published by The Motley Fool