In this article, we discuss the 10 best dividend champions to buy for 2022. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Dividend Champions to Buy for 2022.
Dividend champions are stocks which have offered consistent dividend increases for 25 years or more. However, unlike dividend aristocrats, it is not imperative that dividend champions are members of the S&P 500 index. Investors can benefit from these lesser known companies, since they usually offer attractive valuations, good payout ratios, stable balance sheets, and solid yields.
Companies that cut dividends or eliminate them entirely have historically faced volatility in the stock market, and businesses that initiate or grow dividends experience the highest returns relatively, according to a study conducted by Ned Davis Research and Hartford Funds in February 2021, where they measured the performance and returns of the S&P 500 constituents between the years 1973 to 2020.
Value investors are particularly interested in dividend stocks since they offer reliability, stable performance, and long-term growth. As of December 31, 2020, 69% of the stocks in the S&P 500 Index have dividend yields higher than the 10-Year US Treasury, which is the highest average yield on record.
Dividend champions are a popular pick for many investors, since these companies offer consistent dividend growth at relatively affordable prices, such as Black Hills Corporation (NYSE:BKH), New Jersey Resources Corporation (NYSE:NJR), and Enbridge Inc. (NYSE:ENB).
Some of the most notable dividend champions heading into 2022 include Consolidated Edison, Inc. (NYSE:ED), Chevron Corporation (NYSE:CVX), and International Business Machines Corporation (NYSE:IBM).
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Our Methodology
We selected the dividend stocks that offer attractive yields, consistent dividend increases of at least over 25 years, and strong company fundamentals. We have also mentioned the hedge fund sentiment around each stock, which was gauged from a total of 867 elite funds that were monitored by Insider Monkey in the third quarter of 2021.
Best Dividend Champions to Buy for 2022
10. Black Hills Corporation (NYSE:BKH)
Dividend Yield as of January 20: 3.56%
Number of Years of Dividend Increases: 51
Number of Hedge Fund Holders: 16
Black Hills Corporation (NYSE:BKH) is an electric and gas utility company from South Dakota, supplying power throughout the Western United States. Black Hills Corporation (NYSE:BKH) has an extensive dividend history, and the company has consistently increased its dividends for 51 years. As of January 20, Black Hills Corporation (NYSE:BKH) offers a yield of 3.56%.
On October 26, Black Hills Corporation (NYSE:BKH) declared a $0.595 per share quarterly dividend, which is a 5.3% increase from the prior dividend of $0.565. The dividend was paid on December 1, to shareholders of record on November 17. Black Hills Corporation (NYSE:BKH) is one of the top dividend champions heading into 2022.
Mizuho analyst Paul Fremont raised the price target on Black Hills Corporation (NYSE:BKH) to $67 from $60 and kept a Neutral rating on the shares on September 22.
Among the hedge funds tracked by Insider Monkey, 16 funds were bullish on Black Hills Corporation (NYSE:BKH) in the third quarter of 2021, with stakes totaling $55.9 million. Mario Gabelli’s GAMCO Investors is the largest stakeholder of Black Hills Corporation (NYSE:BKH), with 201,491 shares worth $12.6 million.
9. Franklin Resources, Inc. (NYSE:BEN)
Dividend Yield as of January 20: 3.55%
Number of Years of Dividend Increases: 41
Number of Hedge Fund Holders: 28
Franklin Resources, Inc. (NYSE:BEN) is an American multinational global investment firm based in New York City that invests in mutual funds and retirement planning for private, professional, and institutional investors. Franklin Resources, Inc. (NYSE:BEN) reported preliminary month-end assets under management of $1.5781 trillion on December 31, 2021.
Franklin Resources, Inc. (NYSE:BEN), on December 14, declared a $0.29 per share quarterly dividend, which is a 3.6% increase from its prior dividend of $0.28. The dividend was paid on January 14, to shareholders of record on December 31. The company offers a 3.55% yield as of January 20, with 41 years of consistent dividend increases.
Citi analyst William Katz raised the price target on Franklin Resources, Inc. (NYSE:BEN) to $45 from $43 and kept a Buy rating on the shares on January 11. The analyst also opened a “30-Day Positive Catalyst Watch” ahead of the company’s Q4 results.
In the third quarter of 2021, 28 hedge funds in the database of elite funds maintained by Insider Monkey were bullish on Franklin Resources, Inc. (NYSE:BEN), with stakes totaling $359.4 million. Billionaire Ken Griffin’s Citadel Investment Group is the biggest Franklin Resources, Inc. (NYSE:BEN) stakeholder, with 3.8 million shares worth approximately $115 million.
In addition to Consolidated Edison, Inc. (NYSE:ED), Chevron Corporation (NYSE:CVX), and International Business Machines Corporation (NYSE:IBM), Franklin Resources, Inc. (NYSE:BEN) is a notable dividend champion to buy for 2022.
8. Community Trust Bancorp, Inc. (NASDAQ:CTBI)
Dividend Yield as of January 20: 3.62%
Number of Years of Dividend Increases: 41
Number of Hedge Fund Holders: 10
Community Trust Bancorp, Inc. (NASDAQ:CTBI) was founded in Kentucky in 1903, and operates via Community Trust Bank, serving customers in Kentucky, West Virginia, and Tennessee. Community Trust Bancorp, Inc. (NASDAQ:CTBI) provides banking and investing expertise.
Publishing its Q4 results on January 19, Community Trust Bancorp, Inc. (NASDAQ:CTBI) posted earnings per share of $1.08, exceeding estimates by $0.02. Revenue for the quarter totaled $55.79 million, outperforming estimates by $993,000.
On October 29, Community Trust Bancorp, Inc. (NASDAQ:CTBI) declared a $0.40 per share quarterly dividend, in line with previous. The dividend was paid on January 1, to shareholders of record on December 15. The company increased its dividend by 3.9% from the prior dividend of $0.385 on July 28, 2021.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 10 funds reported owning stakes in Community Trust Bancorp, Inc. (NASDAQ:CTBI), worth $15.81 million. Renaissance Technologies is the largest Community Trust Bancorp, Inc. (NASDAQ:CTBI) stakeholder, with 156,382 shares, valued at $6.5 million.
Just like Consolidated Edison, Inc. (NYSE:ED), Chevron Corporation (NYSE:CVX), and International Business Machines Corporation (NYSE:IBM), hedge funds are piling into Community Trust Bancorp, Inc. (NASDAQ:CTBI).
7. New Jersey Resources Corporation (NYSE:NJR)
Dividend Yield as of January 20: 3.75%
Number of Years of Dividend Increases: 26
Number of Hedge Fund Holders: 9
New Jersey Resources Corporation (NYSE:NJR) is an energy company that offers natural gas and clean energy services, dealing in natural gas transportation, solar projects, and storage and transportation of resources from local distributors to customers. New Jersey Resources Corporation (NYSE:NJR) has been providing increasing dividends for 26 consecutive years, and offers a 3.75% yield as of January 20.
On November 10, New Jersey Resources Corporation (NYSE:NJR) declared a $0.3625 per share quarterly dividend, which reflects a 9% increase from its prior dividend of $0.3325. The dividend was paid on January 3, to shareholders of record on December 15.
Mizuho analyst Gabriel Moreen downgraded New Jersey Resources Corporation (NYSE:NJR) to Neutral from Buy with a $42 price target on January 5. According to the analyst, New Jersey Resources Corporation (NYSE:NJR) now has fewer potential upside catalysts and faces headwinds in clean energy ventures, which is a growth priority for New Jersey Resources Corporation (NYSE:NJR) through 2024.
Billionaire Israel Englander’s Millennium Management is the leading New Jersey Resources Corporation (NYSE:NJR) shareholder, owning 107,694 shares worth $3.7 million. Overall, 9 hedge funds were long New Jersey Resources Corporation (NYSE:NJR) in the third quarter of 2021, down from 12 funds in the preceding quarter.
6. Consolidated Edison, Inc. (NYSE:ED)
Dividend Yield as of January 20: 3.85%
Number of Years of Dividend Increases: 47
Number of Hedge Fund Holders: 24
Consolidated Edison, Inc. (NYSE:ED) is one of the leading investor-owned American utility companies, which provides multiple energy related products and services to its customers through its subsidiaries. Consolidated Edison, Inc. (NYSE:ED) is headquartered in Manhattan.
On January 20, Consolidated Edison, Inc. (NYSE:ED) declared a quarterly dividend of $0.79 per share on its common stock, payable on March 15 to stockholders of record on February 16. This reflects an annualized increase of $0.06 over the previous annualized dividend of $3.10 a share.
RBC Capital analyst Shelby Tucker on December 22 raised the price target on Consolidated Edison, Inc. (NYSE:ED) to $85 from $78 but kept a Sector Perform rating on the shares. Consolidated Edison, Inc. (NYSE:ED) has the potential to capitalize on meaningful investment opportunities given the state’s “ambitious” clean energy goals, but the regulatory environment in New York is challenging, the analyst tells investors in a research note.
A total of 24 hedge funds were bullish on Consolidated Edison, Inc. (NYSE:ED) in the third quarter of 2021, down from 30 funds in the prior quarter. Electron Capital Partners, the largest Consolidated Edison, Inc. (NYSE:ED) stakeholder, addedly the stock to its portfolio during Q3 2021, buying 1.35 million shares worth $98.4 million.
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Disclosure: None. 10 Best Dividend Champions to Buy for 2022 is originally published on Insider Monkey.
