3 High-Yield Dividend Stocks You Can Buy for $200 Now and Hold for at Least a Decade

The S&P 500 the index is up about 16% this year. Many of the index’s dividend payers have increased their payouts, but not as much as share prices have risen. As a result, the average dividend-paying stock in the benchmark yields a paltry 1.3% at recent prices.

Fortunately, there are still a handful of top dividend payers that trade at low enough prices to offer high yields. Here’s why they could be great buys for most income-seeking investors right now, and look like they’ll be a no-brainer for at least a decade.

1. Bristol Myers Squibb (~$50 per share)

Bristol Myers Squibb (NYSE: BMY) is a large pharmaceutical company that does not sell weight management drugs. A lack of popular obesity treatments is partly responsible for the stock’s decline of about 4% this year.

Bristol Myers Squibb shares are yielding a juicy 4.9% at recent prices. With total sales up 9% in the second quarter, there’s an excellent chance the company can maintain its 15-year streak of dividend growth for at least another decade.

In the plus column, Bristol Myers Squibb may soon begin marketing a new treatment for patients with schizophrenia and other forms of psychosis. In 2023, it acquired KarXT, a still-experimental treatment that could become the first antipsychotic drug that does not block dopamine receptors. Clinical trial results suggest that this new mode of action leads to fewer side effects.

Today’s antipsychotic drugs generate blockbuster sales, even though they have side effects that include drowsiness and weight gain. However, these side effects decrease compliance, and doctors are asking for a solution that is easier for patients to live with. The FDA is currently reviewing an application for KarXT and is expected to issue an approval decision next month.

2. Dow Inc. (~$54 per share)

Dow Inc. (NYSE: DOW) offers a dividend yield of 5.2% at recent prices, but there’s a catch. The leading chemicals company has not raised its payout since it was spun off from DuPont de Nemours in 2019.

While the Dow hasn’t raised its dividend lately, investors can at least count on steady payouts. The company recently announced its 452nd consecutive quarterly dividend payment.

Macroeconomic conditions haven’t been ideal for the basic materials company, but it looks like the worst may be over. In the second quarter, Dow reported net sales that were down year-over-year but up slightly from first-quarter results.

Downstream Asian plastic prices have been a problem, but Dow’s ability to manufacture chemicals at a lower cost than smaller competitors is a sustainable advantage. It may not happen in 2024, but patient investors can reasonably expect significant dividend increases down the road.

The story continues

3. CVS Health (~$59 per share)

CVS Health (NYSE: CVS) is famous for its chain of retail pharmacies, but this is a relatively small part of its vertically integrated business. In 2018, it acquired Aetna, an insurer that collects health care premiums from about 39 million people.

In addition to Aetna, CVS Health benefits from the integration of its pharmacy benefit management (PBM) business. 34% of all prescriptions filled last year were handled by PBM CVS Health.

After falling about 19% so far in 2024, CVS Health stock offers a nice dividend yield of 4.6%. The stock is under pressure as management has cut its 2024 earnings expectations twice this year. The new rule changes cut star ratings for its Medicare Advantage plans, and the company will lose billions in rating bonuses it used to receive from the government. While it probably won’t happen in 2024, it’s only a matter of time before the company’s Medicare Advantage plans are eligible for bonuses again.

CVS has doubled its dividend payout over the past 10 years. With a unique collection of integrated healthcare businesses giving it an edge over competitors, another decade of big payout increases looks likely.

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Cory Renauer has positions in CVS Health. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.

3 High-Yield Dividend Stocks You Can Buy for $200 Now and Hold for At Least a Decade was originally published by The Motley Fool