Worried the AI Hype Won't Last? These Dividend Stocks Offer Safer Exposure

Artificial intelligence (AI) has been the hottest thing on Wall Street over the past three years. Many believe the technology is here to stay and will make those who pick the right stocks significantly richer over the long run. Some are worried that the excitement will eventually fizzle out, the AI bubble will burst, and those who stay invested in some leading AI-focused companies will regret it.

I firmly belong in the first camp, but for those in the second, there are safe ways to get exposure to AI, for instance, by investing in solid, dividend-paying corporations that are using the technology to improve their operations without making it a central part of their businesses. Let's consider two such stocks: Eli Lilly (NYSE: LLY) and Medtronic (NYSE: MDT).

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1. Eli Lilly

Eli Lilly is currently flying on all cylinders. It dominates the market for weight-loss drugs and is generating rapidly growing revenue and earnings. The company's dividend program is, in my view, somewhat underrated. Eli Lilly's forward yield is only 0.6% -- compared to the S&P 500's average of 1.2%, but that's largely because of how much the stock has gained in the past decade.

And over this period, Eli Lilly has increased its payouts by 239.2%. Eli Lilly is an excellent growth and income stock for healthcare-focused investors, and the company is also slowly making AI moves that could help revolutionize the pharmaceutical industry. Eli Lilly built the most powerful computer in biopharma with the help of Nvidia and is now using it to speed up the slow process of drug development.

If this initiative pays off, it will make a material impact on Eli Lilly's financial results as the company will be able to launch drugs faster and at lower costs, leading to stronger margins and profits. However, Eli Lilly's prospects don't depend on whatever else happens in the broader AI industry. The company's AI-related efforts are like icing on a delicious cake. Eli Lilly is already massively successful -- and should perform well over the long run -- without or without that.

2. Medtronic

Medtronic, a leading medical device maker, has a broad product portfolio that enables it to generate consistent revenue and earnings. The company has made many breakthroughs and innovations in its long and successful history. Medtronic is now slowly implementing AI across its business. For instance, the healthcare giant has used the technology to improve the performance of some of its products, including the LINQ II, an insertable cardiac monitor that tracks slow or irregular heartbeats and sends alerts as needed. Medtronic has reduced false alerts with this device thanks to AI algorithms.

That's one of several AI initiatives the company has been engaged in. Although they could help boost demand for some of its products, they are not central to its future. Meanwhile, Medtronic's business is improving elsewhere. Its revenue has been strong in recent quarters, thanks to relatively new launches, while it recently earned clearance for the Hugo system, which could help it tap into lucrative long-term opportunities. Lastly, Medtronic is a fantastic dividend stock with 48 consecutive years of payout increases. The stock is a relatively low-risk way for dividend seekers to gain some exposure to the AI market.

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