Healthcare Stocks Offer Solid Dividend Growth Opportunities

Investors are increasingly looking into dividend-paying stocks to combat inflation. Medtronic, Bristol Myers Squibb, and AbbVie are highlighted for their reliable dividend growth, attracting attention in a strained economy with a focus on healthcare spending.

Date: 04-01-2025

AI Rating: 7

Dividend Growth Potential
The report discusses the importance of dividend-paying stocks in maintaining passive income streams, especially in the face of inflation. Specifically, it mentions three well-established companies: Medtronic, Bristol Myers Squibb, and AbbVie, all of which have a history of increasing their dividends over time.

Free Cash Flow (FCF)
Medtronic generated a significant $5.5 billion in free cash flow last year, utilizing only 66% of this amount to meet dividend obligations. This healthy cash flow allows for future dividend increases, making it an attractive option for income-focused investors.

Revenue Growth
Despite challenges, Bristol Myers Squibb reported a growth of 18% year-over-year in its recently launched drug portfolio, contributing 49% of total sales. AbbVie also achieved a 3% overall revenue increase despite Humira's sales declining by 34% year over year.

Dividend Yields
Currently, Medtronic offers an appealing 3.5% yield, Bristol Myers Squibb a 4.3% yield, and AbbVie a 3.7% yield, all of which are factors that could contribute positively to stock price appreciation, especially for investors seeking income.

Outlook
The article suggests that the healthcare sector is relatively resilient against macroeconomic fluctuations, as medical needs remain constant. With the aging population driving up healthcare expenditures, the prospects for companies like Medtronic and Bristol Myers Squibb appear promising, especially considering their recent achievements in revenue growth and consistent dividend payments.

Stocks: MDT BMY ABBV