3 High-Yield Dividend Growth Stocks to Buy in December and Hold for a Decade or Longer

It's been a great couple of years for the stock market. From the end of 2022 through Nov. 29, the benchmark S&P 500 (SNPINDEX: ^GSPC) index rose a whopping 57.1% higher.

During this bull run, stock prices have bounded forward much further than earnings from their underlying businesses. As a result, the average dividend payer in the benchmark index offers a paltry 1.2% yield at recent prices.

It's a lot harder for income-seeking investors to find high-yield dividend stocks to buy these days, but it's not impossible. Shares of Brookfield Infrastructure (NYSE: BIP)(NYSE: BIPC), AbbVie (NYSE: ABBV), and Royalty Pharma (NASDAQ: RPRX) offer yields above 3% at recent prices. In addition to high yields at the moment, there's a good chance these dividend payers can crank up their payouts a lot further before you're ready to retire.

1. Brookfield Infrastructure

The overall economy tends to grow over time, but predicting which industries will grow fastest is risky. That said, just about all industries need infrastructure. With this in mind, we can reasonably assume the amount of energy, data, water, and freight that Brookfield Infrastructure transports and stores will continue rising along with its dividend payout.

There are two ways to invest in this high-yield dividend payer. Brookfield Infrastructure Corp. (BIPC) shares offer an attractive 3.6% dividend yield. If you're prepared for the complex tax implications that come with owning shares of a master limited partnership, Brookfield Infrastructure Partners (BIP) trades at a lower price and offers a much larger 4.6% yield.

This February, Brookfield Infrastructure increased its quarterly dividend payout for the 15th consecutive year. The company raised its payout by 6% this year, and investors can reasonably look forward to at least another decade of significant payout raises.

Brookfield Infrastructure reported funds from operations, a proxy for earnings, that rose to $2.31 per share during the first nine months of 2024. That's heaps more than it needs to support a payout currently set at $1.62 per share annually.

2. AbbVie

Did you know Americans spent $405.9 billion on prescription drugs in 2022? That was 8.4% higher than the previous year, and it wasn't an anomaly. Steadily rising prescription drug sales are a reliable trend that income-seeking investors can follow all the way to the bank.

AbbVie is one of the more attractive dividend-paying stocks in the pharmaceutical industry, with a 3.6% yield at recent prices. It's also one of its industry's fastest dividend raisers. Since splitting from Abbott Laboratories in 2013, it's more than quadrupled its payout.

Shares of AbbVie have been under an unusual amount of pressure due to the loss of U.S. patent-protected market exclusivity for its former lead drug, Humira. Sales of the anti-inflammatory injection sank 34% year over year to $7.3 billion during the first nine months of 2024.

AbbVie's a smart stock to buy now because it has several, more recently launched blockbusters that are offsetting Humira losses and driving earnings growth. The company's new top revenue stream, Skyrizi, is a psoriasis injection that launched in 2019. Sales of the new blockbuster soared 48% year over year to $7.9 billion in the first nine months of 2024.

Skyrizi is offsetting Humira losses single-handedly, and it isn't the only young blockbuster with soaring sales in AbbVie's lineup. Rinvoq, an oral arthritis drug that also launched in 2019, produced nine-month sales that grew 52% year over year to $4.1 billion.

With many years of exclusivity in front of Rinvoq and Skyrizi, another decade of rapid dividend growth seems likely.

3. Royalty Pharma

Investing in big pharmaceutical companies is one way to ride the prescription drug wave, but it isn't the only way. Royalty Pharma is a specialty financier that lends money to drugmakers in return for a royalty stake in their products. At recent prices, the stock offers a 3.6% yield.

Royalty Pharma's assets include Trikafta and the rest of Vertex Pharmaceuticals' cystic fibrosis franchise. Trikafta is just one of 15 blockbuster drugs in the portfolio that generate over $1 billion in annual sales.

Royalty Pharma raised its dividend payout by 5% in January, supported by rising sales of the drugs it has a stake in. Investors can look forward to many more years of dividend growth. The company expects to invest between $10 billion and $12 billion during the four years ended in 2026.

Royalty Pharma's role in the pharmaceutical industry is significant, but it still has plenty of room to grow. The industry is expected to need more than $1 trillion in capital over the coming decade. Adding some shares of this high-yield dividend grower to a portfolio now could produce buckets of passive income by the time you're ready to retire.

Should you invest $1,000 in Brookfield Infrastructure Partners right now?

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Abbott Laboratories, and Vertex Pharmaceuticals. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.