5 Stocks for Dividend Growth Investing in 2022

2. Merck & Co., Inc. (NYSE:MRK)

Dividend Yield as of January 24: 3.45%

Number of Years of Consistent Dividend Increases: 12

Number of Hedge Fund Holders: 77

Merck & Co., Inc. (NYSE:MRK) has consistently increased its dividends for the past 12 years, and offers a 3.45% yield as of January 24, making it one of the top dividend growth stocks heading into 2022. Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based pharmaceutical company that develops medicines, vaccines, biologic therapies, and animal health products.

On November 30, Merck & Co., Inc. (NYSE:MRK) declared a $0.69 per share quarterly dividend, which reflects an increase of 6.2% from its prior dividend of $0.65. The dividend was distributed on January 7, to shareholders of record on December 15. 

Goldman Sachs analyst Chris Shibutani on December 17 initiated coverage of Merck & Co., Inc. (NYSE:MRK) with a Buy rating and a $93 price target. The analyst also added the shares to the firm’s Conviction List with the price target implying 22% upside from current levels. Further, Keytruda is one of Merck & Co., Inc. (NYSE:MRK)’s products that is competitively positioned to capture commercial gains, according to the analyst. 

In the third quarter of 2021, elite hedge funds were keen on Merck & Co., Inc. (NYSE:MRK). The Q3 database of Insider Monkey indicated that 77 funds were bullish on Merck & Co., Inc. (NYSE:MRK), holding stakes totaling $4.55 billion. Fisher Asset Management is the largest Merck & Co., Inc. (NYSE:MRK) stakeholder, with 10.6 million shares worth approximately $799 million. 

Here is what Miller Howard Investments has to say about Merck & Co., Inc. (NYSE:MRK) in its Q3 2021 investor letter:

“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) Merck (MRK). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”