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There's at least one positive result from the stock market correction over the past few months. Great dividend stocks can be bought at great discounts. Even better, dividend yields are higher because share prices fell.
But what are the best bargains? I like AbbVie (NYSE: ABBV), Bristol-Myers Squibb (NYSE: BMY), and Enterprise Products Partners (NYSE: EPD). Here's what makes these three top discounted dividend stocks look especially attractive.
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1. AbbVie
AbbVie claims one of the best dividends in healthcare. Its yield currently stands at 4.8%. The drugmaker has increased its dividend by 168% since being spun off from parent Abbott Labs in 2013. And AbbVie's executives reiterated the company's commitment to maintaining a strong dividend at the recent J.P. Morgan Healthcare Conference.
You won't find too many healthcare stocks more attractively priced than AbbVie, either. Shares trade at only 10 times expected earnings. This low valuation is even more appealing because of AbbVie's solid growth prospects.
Although the company faces biosimilar competition in Europe for its top-selling drug, Humira, AbbVie isn't worried about hitting its growth targets. The drugmaker's current lineup includes a fast-growing hematology franchise featuring Imbruvica and Venclexta, as well as a rising star with endometriosis drug Orilissa.
In addition, AbbVie expects to launch a couple of new blockbuster immunology drugs later this year. Risankizumab could win FDA approval for treating psoriasis in April, while AbbVie thinks upadacitinib will win approval later in 2019. The two drugs could combine for annual sales of more than $10 billion by 2025.
2. Bristol-Myers Squibb
Bristol-Myers Squibb (BMS) is another big pharma with a big dividend. Its dividend yields nearly 3.3%. Although BMS's track record of dividend increases isn't as impressive as AbbVie's is, the company has still boosted its dividend in each of the past 10 years.
The overall market correction took a toll on BMS, contributing a 25% decline in its share price since October. However, the stock looks like a bargain now, with a forward earnings multiple of 11.4.
BMS should be able to generate solid earnings growth thanks to powerhouse cancer drug Opdivo and blockbuster blood thinner Eliquis, both of which are projected to rank in the top five best-selling drugs in the world by 2024. These drugs, along with immunology drug Orencia, chemotherapy Sprycel, and immunotherapy Yervoy, should more than offset headwinds from declining sales of the company's older drugs.