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The 3 Best Dividend Stocks to Buy Now: September 2023

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high dividend stocks 2022

You can get all this at 95 cents on the dollar at the moment, as AFB currently trades at a 5% discount to its net asset value (NAV). It’s a decent deal, but understand that over the past five years, this CEF has traded at an average discount of closer to 9%. As the name suggests, AFB is a municipal-bond fund that invests in various tax-free debt across the country. Management actively assesses risk—when markets are favorable, AllianceBernstein’s managers will seek out extra income, but when times warrant caution, they’ll be less aggressive. It’s not an exciting business, but it can be a remunerative one. With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG) is among the world’s largest consumer products companies.

high dividend stocks 2022

Company quarterly SEC filings also specify the company’s dividend per share payments. There are various ways to compare the dividends offered by different companies. Dividends per share, for instance, tell you the amount of each dividend payment that investors receive for each share of stock they own.

These investments should grow its earnings per share by 5% to 7% annually through 2027. The earnings growth should enable the utility to continue growing its dividend. The company’s electric utilities serve 8.2 million customers across six states, while its natural gas utilities provide gas to 1.6 million customers across five states. Its businesses generate very stable cash flows backed by government-regulated rate structures.

That’s the power of being a consumer giant that has been able to adjust itself to changing consumer tastes without losing its core. Thanks to its 2017 acquisition of Valspar, Sherwin-Williams (SHW) is one of the largest paints, coatings and home-improvement companies in the world. Brown-Forman (BF.B) is one of the largest producers and distributors of alcohol in the world.

Diversify Your Dividend Stocks

Target (TGT) might be the No. 2 discount retail chain after Walmart in terms of revenue, but it doesn’t take a back seat to the behemoth from Bentonville when it comes to dividends. gator oscillator Medical devices maker Becton Dickinson (BDX) has bulked up quite a bit over the past few years. In 2015, it acquired CareFusion, a complementary player in the same industry.

  • Most of its properties are freestanding, single-tenant pieces of real estate, and retail is its major industry, with Costco (COST), Best Buy (BBY) and Tractor Supply (TSCO) among its tenants.
  • Besides, many investors are better off buying index funds rather than individual stocks.
  • Similarly, dividend payout ratio (DPR), the percentage of earnings paid out as dividends, helps investors to determine how sustainable a dividend program may be.
  • Here are all 78 stocks, their total return since inception and the number of months since they first appeared in the top 10 list.
  • Indeed, in November 2022, Hormel announced its 57th consecutive dividend increase – a 6% raise to 27.5 cents per share quarterly.
  • WMT has generated average annual levered free cash flow of more than $13 billion over the past five years.

It’s no surprise dividend stocks are considered a safe-haven right now. They have historically done well during recessionary periods, as they provide a level of income, even as stocks overall may be falling. Many companies will even increase their dividend payouts during bear markets, especially if they have a surplus of available cash. Many investors may not realize that since 1930, dividends have provided 40% of the stock markets total returns. And what is even lesser known is its outsized impact is even greater during inflationary years, an impressive 54% of shareholder gains.

ECL’s most recent hike came in December 2022, with a 4% increase in the quarterly payment to 53 cents per share. The historical analysis of dividend stocks revealed that these securities have outperformed other asset classes during previous inflationary periods. This is mainly because many companies keep on raising their dividends even during periods of slow economic growth. Since 1957, dividends have grown at an average of 5.7%, more than 2% above the rate of inflation during this time, as reported by Wisdom Tree. The report also mentioned that dividends in the S&P 500 delivered a 5.45% return from 1991 to 2021, compared with a 2.51% growth in the Consumer Price Index.

Best Companies That Offer Dividends

All of the selected stocks this month appear to be potentially undervalued based on dividend yield theory. After two solid months of strong returns from equity markets we entered another wave of volatility in August. The SPDR S&P Trust ETF (SPY) fell by 1.63% last month but remains up 18.65% year-to-date. Vanguard’s High Dividend Yield ETF (VYM) posted a larger loss of 2.39%, pushing its year-to-date return down to just 1.06%. Following this sour month the year-to-date return for the watchlist falls to 8.4%, well ahead of VYM but considerably worse than SPY. Since inception, November 2020, the watchlist continues to trail SPY by 0.96% and VYM by 1.96%, on an annualized basis.

high dividend stocks 2022

Best of all, dividend stocks have better total returns than non-dividend stocks. From 1973 to 2022, S&P 500 dividend stocks delivered twice the return of stocks that paid no dividends. The best dividend stocks provide investors with dependable income over the long term. The combination of cash flow and appreciation make them a great hedge against inflation. The free high dividend stocks list spreadsheet has our full list of 270 individual securities (stocks, REITs, MLPs, etc.) with 5%+ dividend yields.

Instead, the company invests in a portfolio of mortgage assets, including mainly residential mortgage loans. By being taxed as a REIT, however, CIM is not subject to federal corporate income taxes so long as it distributes at least 90% of its taxable income to its shareholders. That means a mandate for big dividends — and thanks to a robust U.S. mortgage lending market, shares have also risen 40% so far in 2021 and show strong momentum as we close out the year. It first paid a dividend in 1924 and its dividend growth streak is long-lived too, at 50 years and counting.

How to Understand Three Common Dividend Terms

Nordson’s (NDSN) addition to the Dividend Aristocrats on Feb. 1, 2023, boosted the industrial sector’s representation in the equity income benchmark. Years of acquisitions have made Sysco (SYY) the food services and supply giant it is today. And the company’s scale really came in handy during the pandemic, when it had to weather the closure of restaurants, bars and other food-service venues. The world’s largest hamburger chain also happens to be a dividend stalwart. Changing consumer tastes will always be a risk, but McDonald’s (MCD) dividend dates back to 1976 and has gone up every year since.

LYTS operates in the United States, Canada, Mexico, Australia, and Latin America. Before you embark on your dividend investing journey, make sure you understand and plan for the tax consequences of dividend income. That way, you can enjoy your new income stream without any bad surprises from Uncle Sam. The debt/asset ratio shows you how much debt finances the company’s assets.

Best Dividend Stocks of 2022

Founded in 1928, Genuine Parts has long made returning cash to shareholders a priority. Founded in 1912, Illinois Tool Works (ITW) makes construction products, car parts, restaurant equipment and more. While ITW sells many products under its namesake brand, it also operates businesses including Foster Refrigerators, ACME Packaging Systems and the Wolf Range Company. Automatic Data Processing (ADP) is the world’s largest payroll processing firm, responsible for paying nearly 40 million employees and serving more than 1 million clients across 140 countries.

What Are Dividend Stocks?

In periods of high inflation, dividend stocks have recorded strong performance relative to the broader market. Companies that hold long dividend growth track records are particularly popular in this regard. Dividend growers and initiators delivered an annual average return of 10.4% from January 1973 to December 1984, as reported by Sterling Capital. During the same period, non-dividend stocks returned 5.1% annually. The report also mentioned that dividend growers outperformed their peers when inflation ranged between 4% to 13% annually over the past five decades.

High Dividend Stocks List Highest Yields Up To 21.8%

With its below-average payout ratio of 34%, General Dynamics should have sufficient room for more dividend growth. With ample free cash flow and a below-average payout ratio, investors can count on AOS to keep the dividend increases coming. The No. 1 consideration in buying a dividend stock is the safety of its dividend.