Dividend stocks can face challenges in high-interest-rate environments as investors have more options for low-risk, high-yield income. On the flip side, fund managers often turn to top-tier dividend stocks when interest rates are low, expecting these stocks to outperform risk-free assets like U.S. T-bills.
Two dividend stocks to consider before the Federal Reserve cuts rates are Abbott Laboratories (ABT) and Medtronic (MDT). These companies have a history of providing reliable dividend payments that increase annually. Abbott Laboratories is a healthcare company with a strong presence in growing markets like metabolic diseases and cardiac devices. It offers a dividend yield of 2.12% and has consistently paid dividends for 399 consecutive quarters since 1924.
Medtronic, a global medical device company, has raised its dividend for 46 straight years, providing shareholders with a yield of 3.27%. While its dividend growth rate is slightly below its peers, Medtronic’s shares are attractively priced and poised for growth in the cardiac device market.
Investors looking for dependable dividend stocks may find value in Abbott Laboratories and Medtronic. These companies have a track record of increasing dividend payments and may be attractive investments as interest rates decline.