1 Top Dividend Growth Stock to Buy Right Now

Dividend stocks are arguably worth a premium in the current environment. Between a prolonged government shutdown and President Donald Trump's trade wars, the economy and the market might be heading toward some challenging times. And if that does happen, strong dividend payers are precisely the kind of companies that can help stabilize investors' portfolios.

But which dividend stock looks attractive right now? Here's one great example: Amgen (NASDAQ: AMGN). This drugmaker has a lot to offer investors. Let's dig in.

Overcoming a major obstacle

Amgen's shares are up 16%, which is in line with the performance of the S&P 500. One might have thought the company wouldn't perform well this year, given its major patent cliff for two medicines, Prolia and Xvega, which share the same active ingredient and both treat bone-related problems.

However, Amgen still expects decent top-line growth for the year. Its revenue guidance of $35.5 billion at the midpoint implies a revenue increase of 6.3% compared to 2024, a respectable performance for a biotech giant, especially one dealing with biosimilar competition from some important medicines.

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Additionally, Amgen has made significant pipeline progress this year that should allow it to move beyond these (and future) losses of patent exclusivity. There are at least three promising candidates in the company's pipeline that have performed pretty well in mid- to late-stage clinical trials.

The first is MariTide, an investigational weight management therapy that showed robust weight loss in a phase 2 study. MariTide has the advantage of being administered once monthly, as opposed to once a week for the current leaders in weight management drugs. This could attract many patients if the medicine earns approval. According to some projections, it could generate $3.7 billion in revenue by 2030.

Second, Amgen recently shared top-line results for an investigational therapy for moderate to severe eczema, rocatinlimab, to which it shares the rights with Japan-based Kyowa Kirin. True, the eczema market is incredibly crowded. However, many patients don't respond well to existing medicines; rocatinlimab has a novel mechanism of action that could make it effective across a broader patient population. Given how this clinical trial is progressing, the therapy seems to be racing toward regulatory approval.

Third, in June, Amgen reported positive interim phase 3 clinical trial results for bemarituzumab, an investigational treatment for gastric cancer. It could be yet another important addition to the company's lineup, especially considering that gastric cancer is the fifth-leading cause of cancer death worldwide, highlighting the need for therapy options for the disease.

In addition to strong pipeline programs, Amgen has several therapies that should continue driving top-line growth for a while. Its asthma treatment, Tezspire, is still performing well and recently earned a label expansion. Amgen's medicine for thyroid eye disease, Tepezza, is also showing decent sales growth after being launched in several countries over the past two years, including Brazil and Japan.

Overall, despite some biosimilar competition for older products, Amgen should continue to post strong financial results. And newer approvals will allow it to move beyond recent patent cliffs.

Dividend growth at a reasonable price

Amgen's solid underlying business has allowed it to keep its dividend growing for a long time -- the company has raised its payouts every year since initiating them in 2011. That period includes plenty of patent cliffs and other marketwide and company-specific obstacles. Over the past decade, the dividend has increased by 201%. Amgen's forward yield is an attractive 3.1%, much higher than the average of 1.2% for the S&P 500, while its payout ratio is more than reasonable at 46%.

And to make things even better, Amgen seems to be trading at reasonable levels. The stock's recent forward price-to-earnings ratio of 13.7 is lower than the healthcare industry's average of 17.3. Amgen is a great buy at current levels, not only because it seems well equipped to handle a potential economic meltdown, but also because its long-term market-return potential -- especially with dividends reinvested -- looks attractive.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen. The Motley Fool has a disclosure policy.