3 Stocks with Mouthwatering Dividends You Can Buy Right Now

Not all dividend stocks are created equal. Some are safer than others. Some have much higher dividend yields than others. If a stock offers the best of both worlds, it is usually a custodian.

Three Motley Fool contributors have found stocks with mouth-watering dividends you can buy right now. Here’s why they chose it: Gilead Sciences (Guild 1.33%), organ (OGN 0.39%)and Pfizer (PFE -0.76%).

Safe and reliable dividend payer

Prosper Jr. Barkini (Gilead Sciences): When looking for solid dividend stocks, high yields aren’t everything, but they’re certainly a good thing. Gilead Sciences, a leading biotechnology company, is currently offering a yield of 4.80%. S&P 500The average is 1.35%. Gilead Sciences’ attractive yield is partly due to its underperformance in recent years, but investors shouldn’t fear a dividend cut.

Despite appearances, the pharmaceutical company’s underlying business remains fairly strong. Gilead Sciences is one of the leaders in the HIV medicines market thanks to medicines such as Biktarvy, Descovy for pre-exposure prophylaxis (PrEP), Sunlenca, and others. The company’s pipeline in this space includes many programs, including new products and potential label expansions.

Translation: Gilead Sciences should remain a leader in HIV for some time. Those franchises are the company’s biggest growth drivers, so it’s essential for Gilead Sciences to continue innovating here. In that respect, there is little to worry about. But Gilead Sciences is more than just an HIV company. The company’s recent oncology research is making significant progress. We are also developing vaccines and medicines for hepatitis B virus and various inflammatory diseases.

Gilead Sciences’ greatest strength lies in its ability to develop newer and better medicines, including life-saving medicines. The need for this isn’t going away anytime soon. Gilead Sciences is therefore well positioned to deliver strong results over the long term. The company’s payouts have grown 79% over the past decade. Investors should expect the biotech to maintain this momentum.

High-yield stocks that quietly soared this year

David Jagielski (organ): It has been three years since the healthcare giant was born. Merck It spun off Organon, which focuses on medicines targeting women’s health. Organon has been paying dividends ever since and has slowly become a reliable income stock today. And now it’s yielding 5.4%. The same goes for the stock price, which has surged more than 40% this year.

Organon hasn’t raised its dividend, but given its low payout ratio of around 30%, that’s likely. In its most recent quarter, covering the first three months of the year, the company reported that earnings per share rose 11% to $0.78. This is significantly higher than the $0.28 it pays to shareholders per quarter.

This year, the company expects sales to be between $6.2 billion and $6.5 billion, which would imply a modest 1% sales growth at the midpoint. Merck spun off Organon to focus on growing its core business. Organon is not a fast-growing business, but it is a solid dividend stock. And with Organon proving over the years that it can generate consistent free cash flow and profits, investors are taking notice. So, so far in 2024, stocks are rallying.

If your main goal is good dividend stocks, Organon looks like a great choice. It also trades for just 5 times earnings, with a price-to-sales multiple of less than 1.

Dividends aren’t the only attraction of this stock

Keith Speights (Pfizer): Income investors will probably be immediately attracted to Pfizer’s forward dividend yield of over 5.8%. They’ll even like that big pharma is making efforts to maintain and grow its dividend. But the dividend isn’t the only attraction to this stock.

Believe it or not, Pfizer can deliver solid growth in the coming years. This may be surprising, considering the challenges the company faces. Sales of Pfizer’s COVID-19 products are decreasing. Some of the best-selling drugs will lose patent exclusivity in the next few years. This is clearly not an ideal formula for growth.

But I think the worst is over for Pfizer’s COVID-19 franchise. The possible launch of the company’s combination COVID-flu vaccine next year could help turn things around somewhat. Don’t expect Pfizer to return to the huge sales numbers it saw in 2021 and 2022. But any improvement would be helpful.

Unfortunately, Pfizer likely won’t be able to do much to stem the decline in sales of its products as the patent cliff approaches. But the good news is that the company has planned for this inevitable scenario. It has invested in research and development and has used its corona-filled coffers to make several acquisitions in recent years.

As a result, Pfizer expects to generate $20 billion in additional revenue from new products and new indications by 2030. By then, Pfizer expects to generate about $25 billion in new revenue through business development (mainly acquisitions).

Is this improved outlook reflected in Pfizer’s stock price? no. The stock trades at just 12.8 times forward earnings. Pfizer’s dividend is certainly attractive. But the same goes for growth potential and valuation.