3 Dividend Stocks That Are No-Brainer Buys Right Now, Starting With This Healthcare Giant

When it comes to long-term success with dividend investing, you need to focus on criteria beyond just yield. While some high yield dividend stocks can be worth the risk, there are plenty that are trading at a high yield for a good reason.

That is, either they are at risk of cutting or suspending their payouts, and/or other risks may lead to stock price declines that outweigh the returns generated by their large payouts. So, instead of focusing on yield alone, consider criteria such as dividend coverage and dividend growth, along with metrics like valuation.

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Taking all of these into account, three blue chip dividend stocks stand out as strong, dare I say, "no brainer," buys right now: AbbVie (NYSE: ABBV), Realty Income (NYSE: O), and Procter & Gamble (NYSE: PG).

Several years ago, uncertainty ran high about AbbVie, mostly due to concerns about the impact of losing patent exclusivity for its flagship drug product, the rheumatoid arthritis treatment Humira. Yet while this did hurt AbbVie's revenue and earnings after exclusivity ended in 2023, the company has staged a comeback, largely thanks to the success of the anti-inflammatory drugs Skyrizi and Rinvoq.

Last quarter, for instance, Skyrizi sales topped $5.5 billion, a 24% jump from the prior year's quarter. For Rinvoq, sales came in at $2.5 billion, a 25% year-over-year increase. Alongside success with new drug products, AbbVie continues to soften the blow by further building its immunology pipeline through acquisitions. A strong example is the company's recently completed acquisition of Apogee Therapeutics for 11 billion.

Although one-time in-progress research and development (IPR&D) charges from these acquisitions are impacting GAAP earnings, based on 2027 earnings forecasts, AbbVie's 2.7% dividend appears well covered. The stock has a forward payout ratio of around 42.3%. AbbVie has also raised its dividend each year since its spin-off from Abbott Laboratories in 2013.

Dividend growth has averaged 6.8% over the past five years. Trading for around 16 times forward earnings, AbbVie is in the middle of the pack when it comes to the valuation of pharmaceutical stocks. Still, while there's uncertainty over whether Apogee and other deals ultimately add more blockbuster drugs to its pipeline, the stock could continue to bounce back. Coupled with the dividend, this could lead to solid returns for AbbVie investors.