2 High-Yield Dividend Stocks You'll Wish You Had Bought 10 Years From Now

Key Points

• Dividend-paying stocks tend to outperform non-dividend-paying stocks.

• Novo Nordisk has more than doubled its dividend payout since 2020, and it offers a yield above 3% at recent prices.

• Beaten-down Texas Instruments stock offers a dividend yield above 3% despite more than tripling its payout over the past decade.

• 10 stocks we like better than Novo Nordisk ›

Are you more interested in overall gains or generating a large stream of passive income? If you're not sure, I've got great news. It doesn't matter. Filling your portfolio with dividend payers is one of the most effective ways to outperform the overall stock market, according to over 50 years of historical data.

Between 1973 and 2024, dividend-paying stocks in the benchmark S&P 500 index delivered a 9.2% average annual return. Companies in the same index that didn't pay dividends returned just 4.3% in an average year, according to research from Ned Davis and Hartford Funds.

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Instead of blindly picking every available dividend stock, let's focus on a couple that tend to raise their payouts at a rapid pace. Despite a good chance that they can keep raising their payouts at a satisfying pace, shares of Novo Nordisk (NYSE: NVO) and Texas Instruments (NASDAQ: TXN) have been beaten down a long way this year. Here's why, a decade from now, you could regret ignoring them while they're trading at beaten-down prices.

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1. Novo Nordisk

Shares of Novo Nordisk were outperforming the benchmark S&P 500 index on the strength of its glucagon-like peptide-1 (GLP-1) receptor agonist semaglutide. The company markets injectable versions of this treatment under the brand names Ozempic for diabetes and Wegovy for obesity.

Novo Nordisk underestimated demand for Wegovy when it launched in 2021, which led to a shortage. The Food and Drug Administration (FDA) allowed compounding pharmacies to formulate their own versions of semaglutide, and the resulting revenue reductions haven't gone over well with investors.

When the market opened on Sept. 15, the stock was down about 62% from its previous peak, which is probably too far. The FDA only allows compounding when a patient's medical need can't be met by an FDA-approved drug and the shortage is officially over.

The FDA has ended the shortage that made compounding semaglutide relatively easy, but Hims & Hers Health still offers customized versions to U.S. customers in all but a few states as long as it considers those customers medically eligible. Despite the FDA's ineffective attempts to prevent sales of compounded semaglutide to folks who would probably be fine with Novo Nordisk's version, sales are still rising.

Novo Nordisk reported total U.S. sales that rose 16% year over year in the first half of 2025. Operating profits are expected to rise by 10% to 16% in 2025. The beaten-down stock has been trading at levels that imply much slower growth rates. At recent prices, you can scoop the stock up for just 14.5 times forward-looking earnings estimates.

If Novo Nordisk repeats last year's dividend payments, investors will receive a 3.1% yield. Significant payout raises in the years ahead seem more likely. This company has more than doubled the dividend payments it delivers since 2020. Adding some shares to a diverse portfolio now and holding over the long run gives you a great chance to outperform the market.

2. Texas Instruments

If you think Texas Instruments relies on sales of graphing calculators to meet its rapidly rising dividend commitment, you're not alone. Most investors don't know that this company also builds specialized semiconductors that turn real-world signals into a bunch of ones and zeros that computers can deal with.

When it comes to CPUs and GPUs, only the latest versions carry high profit margins. From time to time, analog chipmakers like Texas Instruments can actually raise prices on chips that they've already been selling for several years. That's because they're usually small components of large products like automobiles. Switching to a competing chip is often far more expensive than absorbing a higher price.

On Sep. 15, Texas Instruments' stock was down about 20% from a peak it set in July. Investors were upset by a lower-than-expected earnings outlook. Third-quarter revenue is expected to rise to a range between $4.45 billion and $4.8 billion. The outlook was relatively soft, but hardly a reason to avoid the stock. The midpoint of this guided range implies a sales gain of about 11% year over year.

Texas Instruments cranked up its dividend payout by 258% over the past decade. At its beaten-down price, it offers a 3.1% yield that could shoot higher in the years ahead. Adding some shares of this stock to a diversified portfolio now could lead to heaps of passive income down the road.

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Cory Renauer has positions in Texas Instruments. The Motley Fool has positions in and recommends Hims & Hers Health and Texas Instruments. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.