5 Highest Yielding Dividend Aristocrat Stocks to Buy Now as Interest Rates Continue to Plunge

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We have covered the Dividend Aristocrats stocks for years here at 24/7 Wall St. So it was kind of a seismic shock back in the spring when AT&T, a long-time charter member of the list, announced it would be cutting its cherished dividend. While it probably should have happened years ago as the company loaded up on debt to acquire DirecTV and Warner Media, the inevitable has arrived and this will be the last year for the stock to be on the prestigious list.

Often when income investors look for companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 65 companies that made the cut for the 2021 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further, with the following attributes also mandatory for membership on the Dividend Aristocrats list:

  • Companies must be worth at least $3 billion at the time of each quarterly rebalancing.
  • Average daily volume of at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.

With the potential for a sizable correction looming, and interest rates at the lowest levels since February, we thought it would be a good idea to look for companies on the Dividend Aristocrats list that are in sectors poised to do well for the rest of 2021. Five stocks hit our screens that are Buy rated at top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

AbbVie

This is one of the top pharmaceutical stock picks across Wall Street, and 34% of fund managers own the shares. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.

One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.

AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.

Shareholders receive a rich 4.48% dividend. SVB Leerink has a Wall Street high price target of $144. The Wall Street consensus target is just $124.08 a share. AbbVie stock closed trading on Tuesday at $116.05.

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