Best Dividend Stocks in 2022
Dividend stocks distribute their earnings regularly to their shareholders. This is in opposition to growth stocks, for example, which typically don’t pay dividends but may reward investors with a big appreciation in their share price. Neither approach is strictly speaking better for investors. You may prefer investing in dividend stocks in 2022 or growth stocks. You may even prefer both types, it all depends on your strategy.
However, dividend investors often prefer consistent income over the years, and that’s what the best dividend stocks can offer. Even if their yields are not the highest, these stocks come from profitable companies with a healthy balance sheet. These companies typically are not trying to lure investors in with unsustainable payouts, and they certainly don’t have negative earnings.
If you want consistent income from high-quality companies, here are the best dividend stocks in 2022:
- Realty Income (NYSE: O)
- People’s United Financial (Nasdaq: PBCT)
- Johnson & Johnson (NYSE: JNJ)
- AbbVie (NYSE: ABBV)
- Consolidated Edison (NYSE: ED)
- Target Corporation (NYSE: TGT)
Best Dividend Stocks in 2022
Many of these are familiar names, but what makes them some of the best dividend stocks in 2022? Let’s find out.
No. 6 Realty Income
Dividend yield: 4.38%
Realty Income is a real estate investment trust (REIT) that pays a strong dividend for one that is so consistent. In fact, it pays a dividend every month and has slowly increased its average dividend cash amount year after year. Realty Income’s portfolio includes many major businesses such as 7-Eleven, Walgreens, Dollar General and FedEx.
By investing in such mainstays, investors can depend on dividends month after month, year after year. Realty Income (O) most recently paid a dividend of $0.247 per share with a yield of 4.38%. O also pays monthly dividends and the payout is slowly raised over time. Typically, it will stay the same for several months before an increase of one or two cents.
No. 5 People’s United Financial
Dividend yield: 3.52%
People’s United Financial is a bank that operates over 400 branches, primarily in the Northeast U.S. in states such as Connecticut, New York, Massachusetts and Vermont. It provides a full suite of banking services to customers such as personal banking, credit cards, mortgages, loans, insurance and investment services.
M&T Bank acquired People’s Financial (PBCT) in 2021, but the latter hasn’t changed its consistent dividend. It pays quarterly dividends and has been increasing them every year by ¼ of one cent. Most recently, it has paid dividends of $0.1825 per share, but that will be $0.185 per share for Q2 2022 if it keeps with past behavior.
No. 4 Johnson & Johnson
Dividend Yield: 2.53%
In the past, consumers often thought of Johnson & Johnson as a company that makes things like baby powder and baby oil. Then we got a Johnson & Johnson COVID-19 vaccine, and we learned J&J does much more. Indeed, it produces medical devices, pharmaceuticals, surgical products, and more. Some of the names we all know are also J&J brands, such as Tylenol, Band-Aid and Neosporin.
Johnson & Johnson (JNJ) also happens to be a strong dividend stock. Its dividend yield is currently around 2.5%, and it most recently paid a dividend of $1.06 per share. It usually increases its dividend once per year by about five or six cents, and it is due for an increase based on past payouts. Hence, its next dividend could be $1.10 per share.
No. 3 AbbVie
Dividend yield: 3.97%
AbbVie is a biopharmaceutical company founded in 2013; it was originally a spin-off of medical device company Abbott Laboratories. Abbie’s products include Humira, Botox, Celexa, and Kaletra. However, that is just a small sampling, its full portfolio includes dozens of products in the areas of immunology, neuroscience, virology, gastroenterology, eye care and medical aesthetics.
AbbVie also pays a strong and consistent dividend. It usually increases them every year, usually in the range of nine to 12 cents. It just upped its dividend for the state of the year, paying $1.41 per share in January 2022. That’s good for a 3.97% yield, and the company has been consistently increasing its yield for years.
Best Dividend Stocks No. 2 Consolidated Edison
Dividend yield: 3.68%
Consolidated Edison, also known as ConEd, is an energy company based in New York. Not only can you buy dividend-yielding stocks from ConEd, but the company is also investor-owned. In fact, it is one of the largest investor-owned energy companies with approximately $12 billion in annual revenue and $62 billion in assets.
ConEd also pays a strong dividend with a 3.68% yield, with a recent payment of $0.79 per share. It has been increasing its dividend steadily over the past several years; for Q1 2022, it increased its dividend by 1.5 cents per share, which was good enough for a nearly 20% increase.
Best Dividend Stocks No. 1 Target Corporation
Dividend yield: 1.7%
Consumers and investors alike know Target for its logo and its pervasive red coloring. However, it doesn’t always garner much attention as a profitable company or one that pays dividends, despite being a company that has both things going for it. Although its profit margin is modest (in the single digits), it has consistently maintained a positive net margin for each of the past four quarters.
And, indeed, Target pays a dividend out to its investors every quarter. Like many dividend stocks, its dividends are adjusted each year, and it should be due for an increase in August, based on its dividend history. In the past, it has increased its annual dividend by about two to four cents. However, in August of 2021, it hiked its dividend up by 22 cents, that’s saying something considering the previous dividend had been $0.68. Now, its shares are paying $0.90, with a potential increase coming. It should be interesting to see what the next increase has in store.
About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.