Dividend stocks are an excellent means of diversifying one’s investment portfolio and earning passive income irrespective of whether you are a veteran or novice investor. With dividend stocks, shareholders get payouts regularly which are usually in the form of cash payments thus making them good sources of income. Deciding on the best dividend stocks can be a bit tricky but businesses paying dividends with strong prospects for future growth are usually excellent examples of growth stocks. This is why these dividend stocks can also be a means for investors to improve their wealth in the long term.
Despite the volatility that is present in stocks, especially with how 2022 has played out so far, stocks are financial assets that still perform well in the long run. With the interest rates about to rise and economic conditions changing quickly, some dividend stocks are showing they are appropriate for investment. Below are 13 of the best dividend stocks to buy in 2022.
Exxon Mobil Corp. (NYSE: XOM)
Based on market capitalization, this is the biggest company in North America and it has proven itself to be one of the most dependable companies for income investors. Despite the chaos of the year 2020 in which the price of oil fell drastically to less than $0 per barrel for a short period, Exxon Mobil still provided investors with a steady dividend while many other energy companies drastically reduced their dividends.
Now that oil is booming again, the company is back to paying increased dividends and paying down debt while also focusing on investment opportunities for the future. The stock has already rallied drastically in the past year with shares still maintaining a 4% yield.
Altria Group, Inc. (NYSE: MO)
This is one of the largest global manufacturers and marketers of cigarettes, tobacco, and other related products. The operations of the company are divided into three major segments namely Smokeable Products, Smokeless Products, and Wine. The Smokeable Products segment consists of the manufacture and sale of large cigars, cigarettes, and pipe tobacco. The Smokeless Products segment consists of the manufacture and sale of these products while the Wine segment deals with the production of wine as well as ownership of wineries and distribution/sales of wine.
In October 2021, the company announced its decision to raise the normal quarterly dividend by 4.7% which puts the new rate of the annual dividend at $3.60 per share thus signifying a 7.4% yield based on the company’s closing stock price of $48.65 as at the end of August 2021. This increase is a reflection of the company’s intention to give back a substantial amount of cash to shareholders in the form of dividends. It is also in line with the company’s long-term goal to achieve a dividend payout ratio of about 80% of its adjusted diluted earnings per share.
This is a one of the best REIT stocks – real estate investment trust (REIT) whose business operates via two major segments namely Tenant Reinsurance and Self-Storage operations. The Tenant Reinsurance segment has to do with reinsurance of risks that concern the loss of goods stored by tenants in stores. The Self-Storage operations segment covers the rental operations of stores that are fully owned.
The company is a member of the S&P 500 while owning over 1,900 self-storage stores across the United States, over 1 million units of stores, and about 147.5 million square feet of rentable space. The company is the second-biggest operator and/or owner of self-storage stores in the country while it is also the biggest in terms of self-storage management. With the variety of storage options available to customers, the company has solid sales growth and impressive profits while currently paying a 2.3% dividend.
Johnson & Johnson (NYSE: JNJ)
Johnson & Johnson’s operations cut across various segments of the healthcare industry as it manufactures pharmaceuticals along with over-the-counter consumer products such as Neosporin, Listerine, and Band-aids. In addition, the company produces medical devices that are crucial for use in surgeries.
Its diversification across three significant business segments gives investors more confidence in the company’s dividend stock. It is a behemoth in the healthcare industry and it has continued to increase its payout for the last 30 years with the most recent raise coming in April 2022 when the quarterly dividend was raised by 6.6% to $1.13 per share. The diversification of operations that spans the manufacture of pharmaceuticals, medical devices, and consumer health brands sets this company apart in the health industry thus allowing it to keep making massive profits. Added to that is the steady increase in dividend payout and the company’s stock is highly appealing for investment.
AbbVie Inc. (NYSE: ABBV)
AbbVie is one of the highest-yielding companies on this list due to its constantly growing dividend. It is a pharmaceutical company that was established in 2013 out of Abbott Laboratories and it has carried over the habit of increasing its dividend as each new year rolls around. Recently, the company reported an 8.5% increase in the quarterly payment last year October.
The company generates a lot of its revenue through its best-selling treatments which include Humira, a drug for rheumatoid arthritis. The drug has also been approved for use to combat various other ailments and this has set it on a path of being the best-selling drug of all time thus surpassing Lipitor in the process. The company is also into the manufacture of the cancer drug known as Imbruvica along with AndroGel, a testosterone replacement therapy. These products ensure the company continues to generate steady revenue that allows it to keep growing the dividend paid to its shareholders.
W.P Carey (NYSE: WPC)
This is another company that operates as a real estate investment trust and has two business segments which are Investment Management and Real Estate Ownership. The Investment Management segment deals with the negotiation and structuring of investments and transactions for debt placement. It is also concerned with managing the portfolios of real estate investments. The Real Estate Ownership segment is in charge of ownership and investment in real estate properties with commercial value.
The company aims to provide investors with steady income by going into long-term tenant partnerships and making investments in properties. With a clear business model such as this, investors have the confidence that the company will make dividend payments regularly. The company’s shares are doing quite well with a gain of 15.77% in the past year while it has seen a 13.49% gain in the past quarter. The company definitely shows strong prospects for growth which should be appealing to potential investors.
EPR Properties (NYSE: EPR)
This is another real estate investment trust firm that is into developing, financing, and leasing theaters, entertainment retail, and family entertainment centers. There are two major segments of operation namely Education and Experiential. The Education segment encompasses investing in public charter schools while the Experiential segment involves investing in entertainment retail centers, megaplex theaters, and other retail parcels.
The company’s stock has been steadily rising lately with shares experiencing a 9% gain after the company reported significantly higher cash flow from operations in the fourth quarter of last year. The cash flow was at the high end of expectations and this enabled the company to increase its dividend. With experts predicting increased growth and profitability for the company, it stands to reason that this company’s stocks are worth an investor’s attention.
Medical Properties Trust (NYSE: MPW)
This is a real estate investment trust (REIT) that is the second-biggest owner of hospitals in the United States. It is involved in developing, acquiring, and investing in net-leased healthcare facilities. Its catalog of properties encompasses medical office buildings, community and regional hospitals, ambulatory surgery centers, rehabilitation hospitals, women and children hospitals, long-term acute care hospitals, and other single-discipline facilities.
As a REIT firm, it is compulsory to pay a minimum of 90% of taxable income to shareholders and this payment of dividends enables such firms to hold the interest of shareholders. The quarterly payout for the dividend of this firm was increased by 4% to $0.28 per share in April 2022 which makes it eight consecutive years that the firm has raised its dividend. Presently, the firm has a current share price of around $20.36 which makes it sufficient for a 5.86% yield.
Home Depot (NYSE: HD)
Home Depot Inc. deals with the sale of home improvement goods and building materials; it also sells décor products along with lawn and garden products with the company having branches in the US, Canada, and Mexico. Apart from the sale of products, the company provides tool and equipment rental along with home improvement installation services.
The housing market is an interesting one to keep an eye on as the younger generation will constantly be looking to get a place of their own while the pandemic also meant people had more money to spare for renovations which led to an increase in sales during the pandemic’s early surge. While the company’s stock dropped by 20% recently, experts still believe people will keep buying one good or the other for their homes and along with the reputable brand built by the company over the years, the stock is bound to pick up again thus giving investors good value for their money.
Air Products & Chemicals (NYSE: APD)
Air Products & Chemicals has been in existence since 1940 but has focused on restructuring in the last few years to shed some of the business segments that seem to be weighing it down. The company is now focused on its industrial gases business which was what it started with. But shareholders have not been forgotten as the company has continued to raise its annual dividend with a recent 8% increase in February 2022 to $1.62 per share. That marks 40 consecutive years in a row that its annual dividend has been increased.
This has been possible due to the company having a solid cash flow position that has allowed it to focus on value creation for shareholders by taking advantage of various growth opportunities through the execution of projects that support decarbonization. The company also reported that it is expecting to return over $1.4 billion to shareholders in the year 2022.
Franklin Resources (BEN)
It is a holding company that specializes in providing investment management and other related services. It is currently managing assets worth $1.5 trillion and this makes it one of the biggest global investment management firms.
As an asset manager, the firm retains its allure as a source of income for investors seeking to invest in the best dividend stocks. For the past 41 years, it has continued to raise its dividend every year with a 3.6% increase in the fourth quarter of the year 2021.
Qualcomm (Nasdaq: QCOM)
This company specializes in designing, developing, and manufacturing essential products while also providing services for digital telecommunications. It has three primary segments of operations namely Qualcomm Technology Licensing (QTL), Qualcomm Strategic Initiatives (QSI), and Qualcomm CDMA Technologies (QCT). The QTL segment is in charge of granting licenses and providing rights so that certain aspects of the firm’s intellectual property portfolio can be used.
The QSI segment is concerned with identifying new or expanding opportunities for its technologies while providing adequate support for the design and introduction of new products and services for data and voice communications. The QCT segment is in charge of the development and supply of system software and integrated circuits that are applicable in networking, application processing, data and voice communications, multimedia, and global positioning system products.
With the constant demand for mobile phones and digital telecommunications products, experts are predicting increased growth for the company even as the second quarter keeps rolling. The company recently reported a 10% increase in the quarterly dividend which came into effect after March 24, 2022. It is in line with the company’s goal of returning capital to shareholders via a balanced capital return policy.
Rio Tinto (NYSE: RIO)
This is the second-biggest producer of metals in the world and the largest producer of iron ore as it has 17 mines in a particular region of the country where it operates. It is also into the production of aluminum and copper even as the demand for both metals is set to be on the rise just as the need for electrification is increasing. The company is also into diamond mining which means the stock will remain steady even when the prices of metals drop. Last year, the company’s dividend payout was $14.15 per share though this was due to the large demand for Iron by China. However, since the company is not just focused on metals alone, it can generate a steady flow of revenue which makes it a solid dividend stock for investment.