Low Yields Don't Necessarily Mean Low Returns for Dividend Stocks

Investors may be hesitant to buy dividend stocks that yield less than 10-year Treasuries, but there are compelling reasons to consider them. One of the key advantages is that dividends can rise over time, unlike fixed Treasury yields.

CVS Health (CVS) is a well-known company with a massive footprint in the US healthcare industry. Its 9,000 stores provide a steady revenue stream that funds its larger healthcare operations, including pharmacy services and insurance.

The company has a strong track record of growth, having beaten analyst expectations on both earnings per share (EPS) and revenue in its second-quarter results for 2026. CVS pays a $2.66-per-share dividend, which translates to roughly a 3% yield.

Wall Street analysts are optimistic about the stock, with a consensus strong buy rating and a high target price suggesting approximately 45% upside over the next year.

Another company worth considering is Abbott Laboratories (ABT), which has paid over 400 quarterly dividends and increased its payouts for 54 consecutive years. Its underlying business is also growing, having beaten Q2 estimates and raised full-year EPS guidance.

UnitedHealth (UNH) is the largest health insurer in the country, with a proven track record of generating cash. Analysts are optimistic about the stock, maintaining a strong buy rating with a high target price implying 42% potential upside.