When it comes to investing in stocks for the long term, one key factor that many investors look for is a company’s ability to pay regular dividends over an extended period. This is a sign of a stable and resilient business that can weather economic storms and continue to generate profits year after year. Two companies that fit this profile are Merck and Abbott Laboratories, both leaders in the healthcare industry with a track record of paying dividends for decades.
Merck, one of the largest pharmaceutical companies in the world, has a diverse lineup of drugs, including the best-selling cancer medicine Keytruda. With a current annual dividend per share of $3.24 and a forward yield of about 3.3%, Merck has a solid dividend program that is attractive to income-seeking investors. The company has a long history of developing novel medicines and has managed to maintain decent revenue and earnings growth over the years, allowing it to grow its payouts consistently.
However, Merck is not without its challenges. Keytruda, its star drug, will face a patent cliff in 2028. To address this, the company has developed a subcutaneous formulation of the medicine that will extend its patent life. Additionally, Merck is actively working on developing new drugs through partnerships and licensing deals, such as the potential GLP-1 weight loss therapy with Hansoh Pharma and the cancer medicine LM-299 with LaNova Medicines. These initiatives demonstrate Merck’s commitment to innovation and its ability to adapt to changing market conditions.
On the other hand, Abbott Laboratories operates in several segments of the healthcare sector, including medical devices, nutrition, diagnostics, and pharmaceuticals. The company’s products, such as the FreeStyle Libre continuous glucose monitoring system and the Similac baby formula brand, are market leaders in their respective niches. Abbott Laboratories is a Dividend King with 52 consecutive payout increases, reflecting its strong financial performance and commitment to rewarding shareholders.
One of Abbott Laboratories’ key growth drivers is its diabetes care business, particularly the FreeStyle Libre franchise. With only 1% of diabetes patients worldwide using CGM technology, there is a significant opportunity for Abbott to expand its market share and drive revenue growth. The company’s focus on innovation and product development positions it well for long-term success and continued dividend growth.
In conclusion, both Merck and Abbott Laboratories are solid choices for long-term investors seeking reliable dividend income. These companies have proven track records of financial stability, innovation, and growth, making them attractive investments in the healthcare sector. By carefully evaluating their business strategies, product pipelines, and market opportunities, investors can make informed decisions about adding these forever dividend stocks to their portfolios.
