By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel largely agreed that ABBV, PG, and EPD are not risk-free defensive plays as suggested by the article. While they offer attractive yields, they face significant headwinds such as biosimilar competition, pricing pressure, input-cost inflation, and regulatory risks.
Risk: ABBV's Humira patent cliff and pipeline reliance, PG's persistent input-cost inflation and private-label share gains, and EPD's exposure to energy-price and interest-rate swings, distribution coverage sensitivity, and tax complexities.
Opportunity: ABBV's potential 12-15% EPS growth from Skyrizi/Rinvoq, which could offset yield pressure, and PG's share buyback program creating an artificial floor for EPS growth.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
AbbVie is a Dividend King drug giant with an attractive 3.2% yield.
Procter & Gamble is a Dividend King consumer staples giant with an attractive 3% yield.
Enterprise Products Partners has increased its distribution each year since its IPO and has a huge 5.5% yield.
When investors are in a risk-on mood, they often gravitate to growth-oriented technology stocks. When investors are in a risk-off mood, however, they often rotate out of tech and into other areas. High-yielding dividend growth stocks is one area that often sees increased interest when fear is on the rise.
Three dividend growth stocks you'll want to look at if you are considering shifting out of tech are AbbVie (NYSE: ABBV), Procter & Gamble (NYSE: PG), and Enterprise Products Partners (NYSE: EPD). Here's why each one is worth buying and holding for the long-term.
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Pharmaceutical giant AbbVie was spun off from Abbott (NYSE: ABT) and, for tracking purposes, retains Abbott's dividend record. Because AbbVie has continued to increase its dividend since its spin-off, it is a Dividend King. That means it has over five decades worth of annual dividend increases, making it a highly reliable dividend payer.
AbbVie also has an attractive 3.2% dividend yield. For reference, the S&P 500 (SNPINDEX: ^GSPC) is yielding around 1.1%, and the average pharma stock yields 0.7%. While investors have been concerned about generic competition for AbbVie's Humira, new immunology drugs Skyrizi and Rinvoq appear to be even more effective. That bodes well for the future and doesn't even account for the company's strong positions in oncology, neuroscience, and aesthetics.
With an attractive yield, a great dividend history, and a still-strong position in the drug sector, AbbVie could be a good option for investors exiting technology stocks. A $10,000 investment will let you buy around 45 shares of the stock.
Another Dividend King to look at today is Procter & Gamble, one of the world's largest consumer staples companies. Consumers will continue buying the toilet paper, deodorant, and dish soap that P&G sells regardless of the stock market environment or economic conditions. Its products are viewed as necessities, and the company's focus on innovation and product superiority tends to keep consumers loyal to P&G's brands.
That said, P&G's industry-leading position often affords it a premium on Wall Street. However, a recent drawdown has pushed the company's price-to-sales, price-to-earnings, and price-to-book ratios below their five-year averages. That suggests that this industry-leading business is attractively priced right now. Notably, the 3% dividend yield is well above the industry average of 2%. A $10,000 investment will allow you to buy around 70 shares of P&G.
Enterprise has "only" increased its distribution annually for 27 consecutive years, falling well short of the 50 needed to be a Dividend King. But don't count this reliable income stock out, since its 27-year streak means this energy business has basically increased its distribution every year since its initial public offering.
While the energy sector can be volatile, Enterprise is really just a boring toll-taker. It charges fees for the use of its massive portfolio of North American energy infrastructure assets, such as pipelines. The volume of energy moving through its system is more important than the price of that energy. Given the importance of oil and natural gas to the global economy, demand for Enterprise's services tends to remain strong throughout the energy cycle.
However, the big draw with Enterprise will likely be its ultra-high 5.5% distribution yield. The master limited partnership (MLP) has an investment-grade credit rating and covers its distribution with distributable cash flow by 1.7x, so there's little risk of a cut. Continued slow-and-steady distribution growth is far more likely. A $10,000 investment will get you 250 units.
When investors look to reduce risk, they often shift into dividend stocks. But don't just choose any dividend stock. Pick ones with strong businesses and long histories of rewarding investors with growing income streams. That's exactly what you'll get with AbbVie, P&G, and Enterprise, making them attractive options if you are rotating out of tech stocks.
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Reuben Gregg Brewer has positions in Procter & Gamble. The Motley Fool has positions in and recommends AbbVie and Abbott Laboratories. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"These dividend names carry underappreciated regulatory, cost, and tax risks that the rotation thesis glosses over."
The article frames ABBV, PG, and EPD as defensive rotation plays from tech due to their Dividend King status and yields of 3.2%, 3%, and 5.5%. Yet it underplays sector headwinds: ABBV faces ongoing Humira biosimilar erosion and pricing pressure on Skyrizi/Rinvoq; PG contends with persistent input-cost inflation and private-label share gains; EPD's MLP structure adds K-1 tax friction and volume sensitivity to any slowdown in U.S. energy output. Forward multiples for these names sit near historical averages, offering little valuation cushion if rates stay higher for longer. A $10k slice buys exposure but ignores opportunity cost versus still-cheap growth names with superior EPS trajectories.
Interest-rate cuts could compress yields while lifting all boats, making the defensive case irrelevant and leaving these names lagging if tech re-accelerates.
"The article prescribes defensive dividend stocks as a 'rotation' play without establishing that tech has actually corrected enough to justify the switch, or that current yields compensate for opportunity cost in a still-elevated rate environment."
This article conflates 'rotation out of tech' with 'buy these three dividend stocks'—a logical leap unsupported by current data. Tech hasn't meaningfully corrected; the Magnificent 7 remain at elevated valuations. ABBV faces Humira patent cliff headwinds despite Skyrizi/Rinvoq momentum—execution risk is real. PG's valuation 'discount' is marginal; consumer staples offer 3% yield in a 5%+ risk-free environment, making the risk/reward unattractive. EPD's 5.5% yield is seductive but masks MLP tax complexity and energy infrastructure sensitivity to capex cycles. The article reads like promotional content, not analysis.
If tech volatility accelerates sharply and recession fears spike, these three stocks' defensive characteristics and yields could genuinely outperform for 12–24 months, validating the rotation thesis despite current valuations.
"Dividend stocks are not a risk-off panacea; they are interest-rate sensitive assets that face long-term fundamental headwinds in energy and consumer staples that the article conveniently ignores."
The article frames these as 'safe' alternatives to tech, but it ignores the interest rate sensitivity inherent in high-yield dividend stocks. When investors rotate out of tech, they are often chasing yield, but if the 10-year Treasury yield remains elevated, the 'bond-proxy' appeal of P&G or AbbVie diminishes significantly. Furthermore, calling Enterprise Products Partners (EPD) a 'boring toll-taker' ignores the long-term terminal risk of North American energy infrastructure in a decarbonizing economy. While these are quality companies, they aren't 'risk-free'—they are simply different risks. Investors swapping growth for value here might just be trading volatility for stagnation, especially if these companies lack the pricing power to outpace persistent core inflation.
If we are entering a period of prolonged 'higher-for-longer' interest rates, these companies' ability to maintain payout ratios while funding capital expenditures could actually outperform growth stocks that rely on cheap debt for expansion.
"These dividend-focused picks offer income and downside ballast, but their total-return potential hinges on durable earnings and favorable energy and policy conditions, which are not guaranteed."
The piece pitches ABBV, PG, and EPD as defensive ballast when tech optimists retreat, but it glosses over real risks: AbbVie’s Humira biosimilar competition and pipeline reliance; Procter & Gamble’s premium valuation in a slow-growth backdrop; and Enterprise’s MLP model exposed to energy-price and interest-rate swings, distribution coverage sensitivity, and tax complexities. The promo-style framing also skips regulatory/commodity-cycle tail risks and assumes perpetual dividend growth. In a mixed-rate, inflationary environment, these names may underperform if earnings growth slows or if energy demand weakens, even with decent yields.
Against: if the tech cycle re-accelerates and rates stabilize, high-quality growth stocks could outpace these dividend plays; and EPD’s distribution could come under pressure if energy cash flow slows or tax rules tighten.
"ABBV's pipeline growth offers a rate buffer the panel hasn't modeled against PG or EPD."
Gemini's rate-sensitivity warning underplays how ABBV's Skyrizi/Rinvoq ramp could deliver 12-15% EPS growth that offsets any 10-year yield pressure on the dividend. That growth differential versus PG's low-single-digit trajectory creates a relative cushion none of the panel quantified. Meanwhile, the shared assumption that EPD's MLP structure is merely a tax nuisance ignores potential 2025 FERC rate resets that could cut distributions 8-10% even before volume or decarbonization effects hit.
"ABBV's growth cushion is real but overstated; FERC risk on EPD distributions is the panel's biggest blind spot."
Grok's 12-15% ABBV EPS growth claim needs scrutiny. Skyrizi/Rinvoq ramp is real, but Humira erosion accelerates post-2024; consensus estimates ~8-10% near-term growth, not 15%. Meanwhile, the FERC rate-reset risk on EPD is concrete and underexplored—distributions aren't sacrosanct. But Grok's core insight stands: ABBV's growth differential versus PG's 2-3% trajectory does create relative valuation cover that the panel treated as equivalent.
"Procter & Gamble's aggressive share buyback strategy provides a more reliable EPS floor than the pipeline-dependent growth of AbbVie."
Grok and Claude are fixated on EPS growth and FERC risks, but both ignore the actual capital allocation reality: PG is currently a buyback machine, not just a yield play. By reducing share count, PG creates an artificial floor for EPS growth that outperforms the organic volatility seen in biopharma. EPD is the real outlier; its fee-based cash flow is structurally superior to the patent-cliff risk inherent in ABBV’s pipeline, regardless of 2025 regulatory resets.
"Yield alone won't protect total return in a higher-for-longer regime; ABBV's growth cushion and EPD's distribution risk matter more than the article implies."
Gemini’s rate-sensitivity warning is useful, but incomplete: ABBV’s defensive appeal isn’t just a function of yields, it rests on Skyrizi/Rinvoq earnings power and margin discipline that could cushion cash flows even with higher yields. EPD’s MLP cash flow is vulnerable to 2025 FERC resets and decarbonization spend, not a guaranteed cushion. The article’s defensives-as-bond-proxy framing risks ignoring real growth and distribution-growth constraints in a higher-for-longer regime.
The panel largely agreed that ABBV, PG, and EPD are not risk-free defensive plays as suggested by the article. While they offer attractive yields, they face significant headwinds such as biosimilar competition, pricing pressure, input-cost inflation, and regulatory risks.
ABBV's potential 12-15% EPS growth from Skyrizi/Rinvoq, which could offset yield pressure, and PG's share buyback program creating an artificial floor for EPS growth.
ABBV's Humira patent cliff and pipeline reliance, PG's persistent input-cost inflation and private-label share gains, and EPD's exposure to energy-price and interest-rate swings, distribution coverage sensitivity, and tax complexities.