The Best Dividend Stocks to Buy With $5,000 in November

Over the past year, many dividend stocks lost their luster for two reasons. First, higher-growth AI stocks continuously pulled investors away from conservative income stocks. Second, the Fed's rate hike in September -- its first in three years -- drove up the yields of safer fixed-income investments and made them more attractive than blue chip dividend stocks.

That pressure might persist through the end of the year, but it's creating attractive buying opportunities for income investors who plan to hold their dividend stocks for the long term. Let's look at three dividend stocks that are worth buying with $5,000 (or more) in November: AbbVie (NYSE: ABBV), Johnson & Johnson (NYSE: JNJ), and Medtronic (NYSE: MDT).

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AbbVie

AbbVie, one of the world's largest pharmaceutical companies, has raised its dividend annually for 53 consecutive years. That makes it a Dividend King, or a company that has continuously raised its payout for at least 50 consecutive years.

AbbVie's forward yield of 2.4% might seem low compared to the 10-Year Treasury's 4.9% yield. However, it still has ample room for future hikes, since it spent only two-thirds of its free cash flow (FCF) on dividends over the past 12 months. It's also generated a total return of 199% over the past five years, easily beating the S&P 500's (SNPINDEX: ^GSPC) total return of 77%.

Past performance never guarantees future gains, but AbbVie's future still looks bright. Over the past few years, it has offset the loss of U.S. exclusivity for Humira, its blockbuster autoimmune drug, by acquiring companies (including Allergan, ImmunoGen, and Cerevel) and ramping up sales of two new immunology drugs, Skyrizi and Rinvoq.

From 2025 to 2028, analysts expect AbbVie's adjusted EPS to grow at a 22% CAGR. Those are impressive growth rates for a stock that trades at 18 times next year's earnings.

Johnson & Johnson

Johnson & Johnson is another Dividend King that has raised its payout for 64 consecutive years. It pays only a 2% forward yield, but it spent just 64% of its FCF on dividends over the past 12 months. It also delivered a total return of 89% over the past five years.

Over the past several years, J&J streamlined its massive business by divesting its slower-growth divisions. Today, it operates two main businesses: Innovative Medicine, which sells pharmaceutical products; and MedTech, which sells medical devices.

The Innovative Medicine segment drives most of its growth, and it's been ramping up its production of new drugs -- including Tremfya for autoimmune disorders and Icotye for psoriasis -- to offset its loss of U.S. patent exclusivity for Stelara, its blockbuster psoriasis drug. It also owns a diverse portfolio of patent-protected cancer, autoimmune, and cardiopulmonary drugs.

From 2025 to 2028, analysts expect J&J's adjusted EPS to grow at a 9% CAGR. It's still reasonably valued at 25 times next year's earnings, and should remain a popular defensive stock to hold if the broader market pulls back.

Medtronic

Medtronic, one of the world's top medical device makers, has raised its dividend for 49 consecutive years and is on track to become a Dividend King next year. It pays a forward yield of 3%, and its dividends only consumed 60% of its FCF over the past 12 months.

But over the past five years, Medtronic delivered a negative total return of 5%. Without reinvested dividends, its stock price fell 19%. It struggled with supply chain constraints, inflation, forex headwinds, an uneven recovery in elective procedures post-pandemic, and regulatory challenges in its diabetes unit. It also grappled with quality-control issues and the growing use of GLP-1 drugs, which could throttle demand for certain medical procedures.

However, Medtronic's future looks a lot brighter. Over the past two fiscal years (which ended in April), its earnings grew again as its component costs normalized, it expanded its higher-growth cardiovascular businesses, and it spun off its diabetes unit as MiniMed (NASDAQ: MMED).

From fiscal 2026 to fiscal 2029, analysts expect its adjusted EPS to grow at an 8% CAGR. Its stock still looks like a bargain at 15 times next year's earnings, and it should attract more attention once more investors realize it's overcoming its previous challenges.

Leo Sun has positions in AbbVie. The Motley Fool has positions in and recommends AbbVie and Medtronic. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.