Dividend stocks are a time-tested way to retire or protect your portfolio if you are already retired. Their yield can give you a good income to cover your expenses, with the appreciation of the equity protecting you against inflation in the long run. If you choose to reinvest the dividends, it’s an even better idea. Long-term, those yields can snowball exponentially.
What would it take for a carefully chosen trio of dividend payers to compound into $1,000,000 by 2030? There are just five years to go, so the math matters as much as the mindset. Using a base case of around 9% annual total returns with dividends reinvested, getting to $1 million by 2030 would require starting near $650,000 today. You don’t need precisely that amount.
If the broader market keeps rallying and interest rate cuts start as expected, your annual gains could be twice that amount. If not, some patience will eventually get you there.
Here are the three dividend stocks to look into:
Pfizer (PFE)
Pfizer (NYSE:PFE) is making a turnaround after bottoming out. The company went through a downturn once COVID vaccine sales declined sharply, but you should remember that this business is far from being a one-trick pony.
It has an impressive pipeline of drugs from which it derives most of its revenue.
Non-COVID growth engines are starting back up again, as Q2 2025 revenue rose 10% to $14.7 billion. Adjusted EPS of $0.78 beat estimates by nearly 37%. These results were mainly driven by Pfizer’s heart disease drug Vyndaqel and blood thinner Eliquis. The pipeline has more drugs on the way to drive growth.
In the meantime, PFE stock has one of the best entry points. You get a 7.04% dividend yield that is well-covered by earnings. The dividend has been increased for 15 consecutive years and has a forward payout ratio of 55.23%.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) sells semiconductors and wireless telecom products. Most of its revenue is derived from smartphones. If you’ve ever used an Android phone, chances are, it ran on Qualcomm’s Snapdragon processors. This company has a plurality of the market share when it comes to high-end Android smartphones.
QCOM stock is currently down over 30% from its peak due to sales growth slowing down. Qualcomm also lost Apple (NASDAQ:AAPL) as a major customer, since it is moving production in-house.
Still, the financials are excellent, and the price now gives you solid upside potential with low downside risk. Qualcomm’s growth will be driven by demand from AI-related companies and the industrial sector. Management targets $8 billion in automotive sales by 2029, over 100 Snapdragon X-powered PC designs by 2026, and expanded AI integration across handsets, autos, and IoT.
Since Qualcomm makes chips for smartphones, it already has the know-how to design very power-efficient AI and automotive chips. It is able to shift gears comfortably and already has $959 million in Q2 automotive sales, up 59% year-over-year. The IoT business (industrial, PCs, electronics, edge computing) grew 27% to $1.58 billion. Apart from EVs, there is a good chance Qualcomm will be a massive beneficiary as industrial robots become mainstream, as they often operate on batteries and require power efficiency.
The stock now has a 2.41% dividend yield.
Dollar General (DG)
Dollar General (NYSE:DG) has recovered almost 68% from its trough, but the stock is still flat in the past year, and it remains one of the most undervalued retail stocks on the market. DG stock went down as its customer base consists mostly of lower-income Americans. Hence, the inflation surge from late 2021 to 2024 crushed those consumers, making them cut back on even some essential items.
Additionally, Dollar General’s stores were in disarray due to supply chain disruptions at that time.
Dollar General’s sales did not see a notable decline during this period. However, margins went down, especially as the interest rate increases caused debt servicing costs to rise.
DG stock has finally bottomed out, and it is starting to make a turnaround. Dollar General began a “Back to Basics” strategy. Numbers-wise, net sales increased 5.3% year-over-year to $10.4 billion and beat estimates in Q1 FY 2025. Operating profit increased 5.5% to $576.1 million, while diluted earnings per share climbed 7.9% to $1.78. Cash flows from operations jumped 27.6% to $847.2 million.
On top of all that, Dollar General raised its full-year 2025 guidance and sees net sales growth of 3.7% to 4.7%.
I see triple-digit upside within the next three years as interest rate cuts start and the rural American economy stabilizes.
DG stock comes with a 2.03% forward dividend yield, and the payout ratio is just 36.94%.
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