2 Top Dividend Stocks for Growth-Oriented Investors

There are many different investing styles. For instance, some people target stocks with explosive growth potential, while others look for companies with reliable dividend programs. However, these two approaches aren't necessarily mutually exclusive. Some corporations can provide both growth opportunities and a steady income.

That's the case with Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Eli Lilly (NYSE: LLY). Here's why these stocks are worth considering for growth- and income-focused investors.

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1. Alphabet

Alphabet hasn't been a dividend stock for long. The company initiated a payout just last year, which it has since increased by 5%. Although it doesn't have a strong track record in this area yet, Alphabet should be capable of maintaining a consistent dividend program due to its robust underlying business. The company is a leader in several industries -- it holds the top spot in the digital advertising market, for instance, thanks to its dominance in online search. It's a mature business that generates tens of billions in annual sales and continues to grow at a steady pace.

In the third quarter, the company's revenue increased by 16% year over year to $102.3 billion. Notably, this was the first time Alphabet's quarterly revenue crossed the $100 billion mark -- it was about $50 billion five years ago. That means the company's sales have more than doubled in five years. That's a compound annual growth rate of about 15%. Bottom-line growth remains healthy, too. Alphabet's earnings per share jumped 35.4% year over year to $2.87.

Alphabet has stumbled upon an even better growth driver than its search engine empire. The company's cloud computing segment is growing much faster than the rest of the business -- to the tune of 34% year over year to $15.2 billion in the period. That's still a small fraction of Alphabet's total sales, but here's the good news. The cloud computing industry is on a long-term growth path that should grant a powerful tailwind to the company. Things are getting even better for the company thanks to its suite of artificial intelligence (AI) offerings.

The company's cloud backlog was $155 billion as of the third quarter, representing a 46% increase compared to the second quarter. The company has considerable momentum in the cloud and AI, and it is also diversifying its revenue through a growing number of Google subscriptions. Alphabet remains an attractive growth stock despite its $3.4 trillion market cap. Its strong business and ability to generate consistent free cash flow will enable it to maintain a solid dividend program.

2. Eli Lilly

It's hard to find a better growth stock than Eli Lilly in the pharmaceutical industry right now. The drugmaker is in a league of its own, generating sales growth that we typically expect from much smaller technology companies. Eli Lilly's third-quarter revenue soared by 54% year over year to $17.6 billion. Eli Lilly is cashing in on its breakthrough work in the GLP-1 market. The company's tirzepatide became the first medicine approved by the U.S. Food and Drug Administration that mimics the action of two separate hormones: GLP-1 and GIP.

This approach makes it more effective than competing therapies. There are several reasons why Eli Lilly should continue to grow its revenue and earnings at a steady pace. First, tirzepatide should maintain its momentum over the next few years, even as new therapies enter the market, as the weight management space is growing at an incredibly rapid rate.

Second, Eli Lilly will launch newer products in the meantime. The company's orforglipron could be one of the first approved oral weight loss therapies after completing phase 3 studies this year. It could also help expand access to these medicines since oral pills are cheaper to manufacture, store, and transport than subcutaneous injections. Third, Eli Lilly is making progress in other therapeutic areas -- such as oncology -- and is doubling down on its AI ambitions.

The company is building what will become the most powerful supercomputer in the pharmaceutical industry, which could help significantly speed up the drug development process. With all that going on, Eli Lilly's prospects look bright. What about the dividend? The company has increased its payouts by 194% over the past decade. There are few (if any) better stocks for both growth and dividend growth in the pharmaceutical industry right now.

Prosper Junior Bakiny has positions in Alphabet and Eli Lilly. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.