In this article, we discuss 10 best dividend aristocrats to buy for 2022. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Dividend Aristocrats to Buy for 2022.
In 2021, the S&P 500 dividend aristocrats included 65 companies from 11 diversified industries, exhibiting growth prospects and strong company fundamentals. With their consistently increasing dividends, the constituents of the S&P 500 dividends list are trusted by investors to deliver safe returns on investment and offer a stable income over the long term.
Dividends have accounted for 32% of the total returns of the S&P 500 since 1926, and companies like PepsiCo, Inc. (NASDAQ:PEP), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) have demonstrated solid financial results over the years, in addition to a steady dividend growth.
Legendary investor Warren Buffett’s Berkshire Hathaway portfolio consists of several dividend stocks including AbbVie Inc. (NYSE:ABBV), The Coca-Cola Company (NYSE:KO), Apple Inc. (NASDAQ:AAPL), and The Procter & Gamble Company (NYSE:PG), among others, and he rakes in billions in dividend income annually. This just goes on to prove the scope of dividend investing for seasoned and amateur investors alike.
The most notable dividend aristocrats for 2022 include Walgreens Boots Alliance, Inc. (NASDAQ:WBA), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ).
Photo by Viacheslav Bublyk on Unsplash
Our Methodology
We used the list of S&P 500 dividend aristocrats for 2022 to select 10 stocks with attractive yields, successive dividend increases for over 25 years, strong fundamentals, solid earnings, and mostly positive analyst ratings.
To gauge the popularity of each stock among the smart money, we have also mentioned the hedge fund sentiment around the holdings.
Best Dividend Aristocrats to Buy for 2022
10. Essex Property Trust, Inc. (NYSE:ESS)
Dividend Yield as of January 14: 2.43%
Number of Hedge Fund Holders: 21
Number of Years of Dividend Increases: 27
Essex Property Trust, Inc. (NYSE:ESS) is a California-based real estate investment trust that focuses its investments across apartment complexes on the West Coast. Essex Property Trust, Inc. (NYSE:ESS) is one of the leading American property managers that made it to our list of the top dividend aristocrats to buy for 2022, with the company offering 27 years of consecutive dividend increases.
Publishing its third quarter results on October 25, Essex Property Trust, Inc. (NYSE:ESS) posted GAAP earnings per share of $1.82, beating estimates by $0.81. Revenue for the period equaled $360.62 million, exceeding estimates by $3.08 million.
KeyBanc analyst Jordan Sadler on January 13 raised the price target on Essex Property Trust, Inc. (NYSE:ESS) to $371 from $363 to account for his 2022 outlook on apartment REIT fundamentals. The analyst kept an Overweight rating on the stock.
On December 10, Essex Property Trust, Inc. (NYSE:ESS) declared a $2.09 per share quarterly dividend, in line with previous. The dividend was paid on January 14, to shareholders of record on January 3.
Among the hedge funds tracked by Insider Monkey, 21 funds were bullish on Essex Property Trust, Inc. (NYSE:ESS) in Q3 2021, with stakes amounting to $264 million. Jeffrey Furber’s AEW Capital Management is the largest Essex Property Trust, Inc. (NYSE:ESS) stakeholder from the third quarter, holding 590,566 shares worth $188.8 million.
Just like Walgreens Boots Alliance, Inc. (NASDAQ:WBA), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ), hedge funds are taking an interest in Essex Property Trust, Inc. (NYSE:ESS).
9. PepsiCo, Inc. (NASDAQ:PEP)
Dividend Yield as of January 14: 2.45%
Number of Hedge Fund Holders: 61
Number of Years of Dividend Increases: 49
PepsiCo, Inc. (NASDAQ:PEP) is an American multinational food and beverage corporation with flagship brands including Pepsi, Mountain Dew, Lay’s, Gatorade, Doritos, Quaker Foods, and Fritos, among others.
Terry Smith’s Fundsmith LLP is the biggest PepsiCo, Inc. (NASDAQ:PEP) stakeholder as of Q3 2021, with more than 10 million shares worth $1.5 billion. Overall, 61 hedge funds in the Q3 database of Insider Monkey reported owning stakes in PepsiCo, Inc. (NASDAQ:PEP), down from 66 funds in the preceding quarter.
On November 8, PepsiCo, Inc. (NASDAQ:PEP) declared a quarterly dividend per share of $1.075, which was paid on January 7 to shareholders of record on December 3. PepsiCo, Inc. (NASDAQ:PEP) offers a 2.45% dividend yield as of January 14, and has had 49 years of dividend increases, making it a notable dividend aristocrat to buy for 2022.
John Staszak, an analyst from the investment advisory Argus, raised the price target on PepsiCo, Inc. (NASDAQ:PEP) to $195 from $180 and kept a Buy rating on the shares on January 4. The analyst notes that PepsiCo, Inc. (NASDAQ:PEP) is well-managed with a valuable brand portfolio that continues to generate solid growth, the company is cutting costs which will benefit earnings, and is working towards annual savings and productivity gains through 2023.
8. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of January 14: 2.53%
Number of Hedge Fund Holders: 88
Number of Years of Dividend Increases: 59
Johnson & Johnson (NYSE:JNJ) is an American health and wellness company that specializes in consumer health and personal care products, medical devices, and pharmaceutical products. Johnson & Johnson (NYSE:JNJ) is one of the oldest dividend aristocrats, providing consistently increasing dividends for 59 years.
On October 19, Johnson & Johnson (NYSE:JNJ) announced its Q3 earnings. The company posted an EPS of $2.60, beating estimates by $0.25. The $23.34 billion revenue was up 10.70% from the prior-year quarter, but missed estimates by $379.76 million.
Johnson & Johnson (NYSE:JNJ) declared a quarterly per share dividend of $1.06 on January 4, payable on March 8 to shareholders of record on February 22.
Credit Suisse analyst Matt Miksic reiterated an Outperform rating and a $200 price target on Johnson & Johnson (NYSE:JNJ) shares on December 30, citing upside with the company’s pharmacy franchises tracking at 15.4% growth versus his 5.7% estimate.
A total of 88 hedge funds monitored by Insider Monkey’s third quarter database were long Johnson & Johnson (NYSE:JNJ), with stakes equaling $6.8 billion. Arrowstreet Capital is one of the biggest Johnson & Johnson (NYSE:JNJ) shareholders as of Q3 2021, with 5.30 million shares worth $856.6 million.
In addition to Walgreens Boots Alliance, Inc. (NASDAQ:WBA) and Chevron Corporation (NYSE:CVX), Johnson & Johnson (NYSE:JNJ) is a solid option for income investors.
Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm has to say:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
7. Atmos Energy Corporation (NYSE:ATO)
Dividend Yield as of January 14: 2.56%
Number of Hedge Fund Holders: 16
Number of Years of Dividend Increases: 38
Atmos Energy Corporation (NYSE:ATO) is one of the largest natural gas distributors from the United States, headquartered in Dallas, Texas, providing gas supply across nine states. The company offers a 2.56% yield as of January 14, making it one of the top dividend aristocrats to buy for 2022.
Atmos Energy Corporation (NYSE:ATO) on November 10 declared a per share quarterly dividend of $0.68, which reflects an 8.8% increase from the prior dividend of $0.63. The dividend was paid on December 13 to shareholders of record on November 29.
BofA analyst Julien Dumoulin-Smith upgraded Atmos Energy Corporation (NYSE:ATO) on December 15 to Buy from Neutral as part of a broader research note on North American Utilities. The analyst stated that since gas prices are returning to greater normalcy, he expects investors to return to the “cleanest” and “fully-regulated” companies first. He also reiterated that increased earnings for Atmos Energy Corporation (NYSE:ATO) are supported by demographic trends and customer growth.
Among the 867 hedge funds tracked by Insider Monkey in the third quarter of 2021, 16 funds reported owning stakes in Atmos Energy Corporation (NYSE:ATO), worth $77.4 million. Phill Gross and Robert Atchinson’s Adage Capital Management is the biggest stakeholder of Atmos Energy Corporation (NYSE:ATO), with a $17.1 million position in the company.
Atmos Energy Corporation (NYSE:ATO) is a notable dividend aristocrat to buy for 2022, in addition to Walgreens Boots Alliance, Inc. (NASDAQ:WBA), Chevron Corporation (NYSE:CVX), and Johnson & Johnson (NYSE:JNJ).
6. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of January 14: 2.74%
Number of Hedge Fund Holders: 61
Number of Years of Dividend Increases: 59
The Coca-Cola Company (NYSE:KO) paid a quarterly dividend of $0.42 per share on December 15 to shareholders of record on December 1. As of January 14, the company offers a 2.74% yield, and has had 59 successive years of dividend growth.
In its third quarter earnings report, published on October 27, The Coca-Cola Company (NYSE:KO) posted an EPS of $0.65, exceeding estimates by $0.07. The Q3 revenue came in at $10.04 billion, gaining 16.14% from the prior-year quarter, outperforming estimates by $321.89 million.
Guggenheim analyst Laurent Grandet upgraded The Coca-Cola Company (NYSE:KO) on January 4 to Buy from Neutral, raising the price target to $66 from $61. The company is exiting the fiscal 2021 transition year “stronger” and The Coca-Cola Company (NYSE:KO) is seeing strong emerging markets despite low vaccination rates. The on-premise sales are also recovering faster than expected. The Coca-Cola Company (NYSE:KO)’s current valuation is compelling, and the analyst expects 12% annual earnings growth through fiscal 2023.
Among the hedge funds monitored by Insider Monkey in Q3 2021, 61 hedge funds were long The Coca-Cola Company (NYSE:KO), with stakes amounting to $25.1 billion. Berkshire Hathaway is the leading stakeholder of The Coca-Cola Company (NYSE:KO), holding 400 million shares of the company, valued at $20.9 billion.
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Disclosure: None. 10 Best Dividend Aristocrats to Buy for 2022 is originally published on Insider Monkey.
