Title: Two Top-Notch Dividend Stocks Offering Yields Above 3%, Perfect for Long-Term Investors Through 2025 and Beyond
Investing in dividend-paying stocks could be your ticket to outperforming the benchmark S&P 500 index or generating a steady income stream. The allure of dividends lies in their potential to boost returns over time.
Once a company decides to share a portion of its earnings with shareholders, its actions tend to favor long-term growth. Analyzing the trend from 1973 to 2023, dividend-paying stocks in the S&P 500 index delivered an impressive 9.17% average annual return, trumping their non-dividend-paying counterparts by a significant margin. The latter posted a modest 4.27% average annual return for the same time frame, according to data from Ned Davis Research and Hartford Funds.
In recent times, shares of Coca-Cola (KO 1.43%) and Amgen (AMGN 0.82%) are open invitations to capitalize on this opportunity as both offer juicy dividend yields above 3%, making them strong contenders for most investment portfolios.
1. Coca-Cola
In September 2023, Coca-Cola's shares hit a peak, but the company continued to pay its quarterly dividend without faltering. This unwavering commitment extended its streak to a commendable 62 years with a recent 5.4% bump.
Coca-Cola remains at the forefront of the beverage industry, despite the decline in sugar soda popularity. The company has successfully leveraged this shift by expanding its product range to include water, sports, and tea categories, hosting thirteen billion-dollar brands.
Amid a 1% increase in unit case volume in the first nine months of 2024, Coca-Cola's strong brand recognition granted it extra pricing power. Organic revenue grew by an impressive 12% year over year, despite currency exchange rate fluctuations. For 2025, the company anticipates earnings growth of 14% to 15%, provided currency headwinds do not derail its progress.
2. Amgen
Amgen, with its longstanding presence in the American biotech sector, has delivered substantial returns for its shareholders. Since 1980, the company has consistently raised its dividend payout.
Over the past five years, Amgen's dividend has soared by an outstanding 40.6%, and analysts expect another payout bump soon. The stock currently offers a dividend yield of 3.3%.
The market's underestimation of Amgen's overlooked product portfolio has led to its stock price drop. However, several growth drivers such as an asthma drug marketed in partnership with AstraZeneca, Tezspire, and its potential approval for chronic nasal polyps treatment, promise to push Amgen's revenues and dividends higher.
Moreover, Amgen's 2024 acquisitions of rare-disease drugs from Horizon Therapeutics have bolstered the company's potential for long-term growth. Tepezza, Krystexxa, and Uplinza are FDA-approved treatments for thyroid eye disease, chronic gout, and progressive autoimmune diseases, respectively. Their combined sales have grown to an annualized $3.6 billion in the third quarter of 2023, providing ample ground for future dividend increases.
In conclusion, both Coca-Cola and Amgen present enticing opportunities for investors seeking reliable dividend income streams and potential for capital appreciation.
- For individuals interested in finance and seeking reliable income streams, investing in companies like Coca-Cola could be attractive. In 2024, Coca-Cola's stock continued to offer a dividend yield, further boosting the total return on investment for its shareholders.
- Amgen, with its impressive track record in the biotech sector, has consistently rewarded its investors by increasing its dividend payout. In the past five years, the dividend growth of Amgen has been significant, making it an appealing option for income-focused investors.
