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This article will identify five of the best dividend stocks for 2022. Here’s a quick snapshot of these high-yield dividend stocks:
- Home Depot (HD)
- Starbucks (SBUX)
- Johnson & Johnson (JNJ)
- Altria Group (MO)
- Walmart (WMT)
Next, we’ll discuss each company’s market outlook and dividend-related metrics.
Best Dividend Stocks
#1. Home Depot (HD)
- 1-Year Trailing Performance: +45%
- Market Cap: $411 billion
- Dividend Yield: 1.68%
Home Depot is the world’s largest home improvement specialty retailer, operating a total of 2,317 retail stores across North America.
The stock recently set new all-time highs as customers spent more on home improvement projects throughout the pandemic.
Additionally, the strong housing market has encouraged many folks to plow more capital into their home.
Home Depot’s latest quarter was one of its best quarters ever. In addition to announcing a third-quarter cash dividend of $1.65 per share, here are some of the quarterly highlights:
- Earnings per share: $3.92 vs. $3.40 expected
- Revenue: $36.82 billion vs. $35.01 billion expected
- Average ticket per customer visit: $82.38, up 12.9% year-over-year
- Same-store sales increased 6.1% in the quarter
The company has paid a cash dividend for 139 consecutive quarters. It’s one of the top ten companies in the S&P 500 by weighting and has favorable conditions moving forward.
Home Depot stock warrants the attention of dividend-focused investors.
#2. Starbucks (SBUX)
- 1-Year Trailing Performance: +3%
- Market Cap: $126 billion
- Dividend Yield: 1.70%
Starbucks is the world’s largest chain of coffee shops with over 33,000 locations in 80 countries.
The company’s financials are returning and growing from where they were at pre-pandemic times.
Same-store sales, average transaction cost, and loyalty programs metrics are all increasing.
Additionally, and perhaps why you’re here: Starbucks just increased its quarterly cash dividend from $0.45 to $0.49 per share.
This marks the 11th consecutive year that the company has increased its dividend.
Let’s look at the other key takeaways from Starbucks’s last earnings report:
- Earnings per share: $1.00 vs. $0.99 expected
- Revenue: $8.1 billion vs. $8.21 billion expected
Starbucks’s reliable dividend, strong brand awareness and stability, and promising growth roadmap make it a dividend stock to consider.
#3. Johnson & Johnson (JNJ)
- 1-Year Trailing Performance: +9%
- Market Cap: $457 billion
- Dividend Yield: 2.45%
Johnson & Johnson is the world’s largest and most broadly-based healthcare company. It develops and sells a variety of medical devices, pharmaceuticals, and consumer goods.
Historically, investors seeking stability didn’t have to look further than Johnson & Johnson.
The company has consistently grown its dividend since the 1960s and has outperformed the S&P 500 since the pre-2000s.
However, there are some changes underway at Johnson & Johnson.
The company is spinning off its consumer division into a new publicly-traded company by November 2023, essentially creating a pure-play pharmaceutical company in JNJ and a Procter & Gamble proxy in the spin-off.
Whatever the result of the spin-off, we don’t anticipate any damaging changes to Johnson & Johnson’s dividend.
It currently offers an attractive dividend yield of 2.45%.
The latest quarterly dividend of $1.06 per share will be distributed on March 8, 2022.
#4. Altria Group (MO)
- 1-Year Trailing Performance: +22%
- Market Cap: $402 billion
- Dividend Yield: 7.12%
Altria is one of the world’s largest producers and marketers of tobacco. It sells cigarettes, cigars, smokeless tobacco, and other related products through a variety of brands.
Altria’s 7.12% annual dividend yield is the highest payout of any stock mentioned in this article.
Altria is also a “Dividend Aristocrat”, or a company that has raised its shareholder payout for 25 years or more.
But Altria Group has raised its dividend annually for 51 consecutive years.
We believe the 7.12% yield is relatively safe.
Altria is preparing for the future of the tobacco industry and shifting its seven-deadly-sin-staying-power into e-cigs.
Earnings are strong. It’s undervalued relative to the rest of the tobacco industry. And the dividend is promising.
Altria is one of the best dividend stocks you can buy.
#5. Walmart (WMT)
- 1-Year Trailing Performance: -2%
- Market Cap: $457 billion
- Dividend Yield: 1.53%
Walmart is one of the largest companies and employers in the world. It operates over 10,500 stores across 24 countries and employs +2.3 million people.
Walmart’s scale allows it to offer everyday low prices to consumers.
And in this inflationary environment, more shoppers than ever are relying on Walmart’s competitive pricing.
Walmart’s CFO, Brett Biggs, recently said, “We’ve always been an inflation fighter for customers.”
Here’s an update on Walmart’s latest financial report:
- Earnings per share: $1.45 vs. $1.40 expected
- Revenue: $140.53 vs. $135.60 billion expected, up 4% YoY
- Same-store sales grew 9.2%
- E-commerce sales increased 8%
Walmart’s 1.53% dividend yield, based on a quarterly payout of $0.55 per share, is on par with the other stocks mentioned in this article.
Other High Dividend Stocks to Consider
This is not an exhaustive list, but here are some other stocks that payout attractive dividends:
- CVS Health (CVS)
- Realty Income (O)
- Exxon Mobil (XOM)
- Pepsi (PEP)
- Kinder Morgan (KMI)
- American Express (AMEX)
- Microsoft (MSFT)
- Apple (AAPL)
- Bristol-Myers Squibb Co. (BMY)
- Enterprise Products Partners (EPD)
- Annaly Capital Management (NLY)
- Southern Copper Corp. (SCCO)
- Lowe’s (LOW)
- Target (TGT)
These are typically stable companies with loyal shareholders – two desirable traits for any dividend stock.
Bottom Line: The Best Dividend Stocks
There it is – the best dividend stocks on the market.
Each of these offers steady income streams, albeit to varying degrees, that deserve the attention of any dividend investor.
This article is for informational purposes only. It is not intended to be investment advice. To learn more about how we evaluated the best dividend stocks, read our editorial principles and public equities research methodology.