2 High-Yield Dividend Stocks to Buy Now for a Lifetime of Passive Income

Investors looking for a way to pump up their passive income streams want to turn their attention toward the pharmaceutical industry. From the end of 2022 through Nov. 22, the benchmark S&P 500 index rose by a stunning 55.5%, but many of its drug-selling components haven't participated in the rally.

Shares of Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) have underperformed over the past couple of years, but these dividend payers kept raising their payouts.

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With dividend payouts that have risen much faster than their stock prices, shares of these three drugmakers offer yields that are way above average. Read on to see why there's a good chance they'll keep raising your passive income stream throughout retirement.

Pfizer

Shares of Pfizer have lost about half their value since the end of 2022, but its dividend payout has been moving in the opposite direction. Last December, the pharmaceutical giant raised its quarterly payout for the 15th consecutive year.

At recent prices, Pfizer offers a huge 6.5% yield and investors can reasonably expect more dividend payout bumps in the years ahead. Sales of the company's COVID-19 products probably won't return to their former glory, but its oncology division is having a terrific year.

Third-quarter sales of cancer therapies shot 31% higher year over year thanks in part to soaring sales of its prostate cancer drug, Xtandi. Xtandi sales will likely continue expanding along with Talzenna. In October, the company announced a significant survival benefit for patients who received Talzenna in combination with Xtandi, versus Xtandi monotherapy, during the Talapro-2 study.

In 2022, Pfizer also used some of its COVID-19 cash to acquire Biohaven and its migraine drug, Nurtec. There have been several new migraine drugs launched over the past five years, but Nurtec is the only one approved for both acute treatment and prevention of migraine headaches.

Nurtec's unique position is a big advantage for Pfizer. According to management, 85% of primary care clinicians who prescribe new migraine drugs are choosing Nurtec.

This year, Pfizer expects $2.85 per share in adjusted earnings this year at the midpoint of management's guided range. That's more than enough to support a dividend payout currently set at an annualized $1.68 per share. With Nurtec, Talzena, and Xtandi driving growth, the drugmaker's payout could rise steadily for another 15 years.

AbbVie

AbbVie is another big pharmaceutical company that's been underperforming in a bull market. Shares of the stock are up by just 9.5% since the end of 2022 because of a huge patent cliff regarding its lead drug.

Humira is an anti-inflammation injection that racked up $21.2 billion in sales during 2022. It lost patent-protected market exclusivity in 2023 and sales fell to an annualized $8.9 billion in the third quarter.

Even though the bottom has fallen out from under the company's top-selling product, AbbVie is still raising its dividend payout. The payment scheduled for February will be 5.8% higher than the payouts investors received this year. At recent prices, it offers a 3.7% yield, and there could be plenty of big payout bumps in its future.

Third quarter Humira sales collapsed by 37% year over year. Those losses were more than offset by soaring sales of Skyrizi, a psoriasis injection, and Rinvoq, an arthritis tablet. Both of these drugs launched in 2019, and they're already generating a combined $19.3 billion in annualized sales.

Skyrizi and Rinvoq aren't the only growth drivers that will help AbbVie continue raising its dividend rapidly. The Food and Drug Administration approved Vyalev, a new treatment for Parkinson's disease, in October. There are over 10 million people living with the progressively debilitating disease. As the first and only injectable levodopa treatment that lasts for 24 hours, advanced-stage patients and their physicians could start beating a path to AbbVie's door.

AbbVie's raised its dividend more than fourfold since spinning off from Abbott Laboratories in 2013. With several blockbusters driving growth and new ones entering the market, income-seeking investors can look forward to at least another decade of steady dividend raises from this stock.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie and Pfizer. The Motley Fool has a disclosure policy.