3 Spectacular High-Yield Dividend Stocks to Buy in November

Should a high dividend yield raise a yellow flag for investors? In some cases, yes. But not always. There are select stocks out there with relatively safe dividends that also happen to have exceptionally high yields for temporary reasons or just because of the nature of the business they operate. The trick is being able to distinguish which ones are traps and which offer opportunities.

To help you in your search, three Fool.com contributors have pulled together reports on a few opportunities they think are worth consideration. Here's why they think AbbVie (NYSE: ABBV), Gilead Sciences (NASDAQ: GILD), and Pfizer (NYSE: PFE) are spectacular high-yield dividend stocks to buy in November.

An ideal stock for dividend and growth investors

David Jagielski (AbbVie): Drugmaker AbbVie is a solid all-around dividend stock, suitable for any type of investor. Its 3.2% dividend yield is above average, and the company has increased it for years.

Last week, AbbVie released its latest earnings numbers, and on top of delivering strong results, it announced it would be increasing its dividend yet again. The new quarterly dividend of $1.64 per share represents a 5.8% increase in the payout. Since it spun off from Abbott Laboratories in 2013, AbbVie has raised its quarterly dividend by an incredible 310%.

There's a lot of value for investors here beyond just the dividend, which is what makes AbbVie a spectacular investment to hold on to. Not only will its dividend likely continue to grow in the years ahead, but so too should its top and bottom lines.

Over the past nine months, the company has generated $41.2 billion in sales, up 3% from the same period last year. While that may seem unimpressive, it comes as the company has been facing some significant headwinds as Humira, one of its top-selling drugs for years, has lost patent protection, and its sales have declined by 34% this year. AbbVie's robust diversification has allowed it to weather the storm and still come out with positive growth.

AbbVie has bolstered its portfolio through acquisitions in recent years, and with the stock trading at a modest forward price-to-earnings multiple of 17, it's an attractive option for growth investors to hang on to as well as dividend investors.

A durable high-yield dividend play

Prosper Junior Bakiny (Gilead Sciences): A high yield means little if the company backing it is likely to cut its payouts eventually. With Gilead Sciences, investors shouldn't have that problem.

Though the past five years haven't been easy for the drugmaker, with unforeseen regulatory setbacks and pandemic-related disruptions to its business, it has continued to hike its dividends. Gilead Sciences' payouts are up by 22.2% since late 2019. The company's forward yield tops 3.4%, compared to the S&P 500's (SNPINDEX: ^GSPC) average of 1.3%.

A company's ability to increase its dividends despite significant issues is a testament to the underlying strength of its operations. Meanwhile, the company managed to keep its revenue afloat partly thanks to Veklury, a medicine for COVID-19 therapy that it developed.

Elsewhere, Gilead Sciences remains a leader in the HIV drug market thanks to therapies like Biktarvy, the top-prescribed HIV regimen in the U.S., with a more than 49% share of the market.

The company's oncology segment continues to make progress, too. Gilead Sciences' long-term plan has been to make significant strides into oncology. More than half of the company's 52 clinical programs are new cancer drugs in development or existing ones seeking label expansion.

Of course, Gilead Sciences has many exciting programs in other areas, including in HIV. The company should continue doing what it has done for a while: develop innovative drugs, deliver strong financial results, and reward investors with dividend hikes. That's why Gilead Sciences is a solid, high-yield income stock to buy this month.

A juicy dividend and compelling valuation

Keith Speights (Pfizer): Investors seeking an especially juicy dividend should definitely check out Pfizer. The big drugmaker's forward dividend yield currently stands at 6.1%. Pfizer's top capital allocation priority is to maintain and grow its dividend. I think the company will be able to deliver on that goal.

As great as Pfizer's dividend is, though, it's not the only reason to consider investing in the pharmaceutical giant. The stock trades at around 9.2 times forward earnings, roughly half the S&P 500 healthcare sector's forward earnings multiple of 18.3. Pfizer's price-to-earnings-to-growth (PEG) ratio is a low 0.72, according to LSEG.

Growth might seem to be a huge challenge for Pfizer, considering its looming loss of patent exclusivity for several top drugs over the next few years. However, the outlook is better than it looks at first glance.

Pfizer's lineup includes multiple rising stars such as migraine therapy Nurtec ODT, eczema drug Cibinqo, and alopecia areata pill Litfulo. Perhaps surprisingly, COVID-19 antiviral therapy Paxlovid has again become a big winner for the company. There's also significant upside potential for respiratory syncytial virus (RSV) vaccine Abrysvo.

Don't overlook Pfizer's pipeline, either. The company has 108 programs in clinical development, 30 of which are in late-stage testing.

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*Stock Advisor returns as of November 4, 2024

David Jagielski has no position in any of the stocks mentioned. Keith Speights has positions in AbbVie and Pfizer. Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, Gilead Sciences, and Pfizer. The Motley Fool has a disclosure policy.