In this article, we discuss top 10 dividend stocks. If you want to read our detailed discussion on dividend investments and the historical performance of dividend stocks, go directly to read Top 25 Dividend Stocks.
10. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of July 25: 2.86%
The Coca-Cola Company (NYSE:KO) is one of the strongest dividend players in the market, increasing its dividends consecutively for the past 60 years. The company has a payout ratio of 71.2%, compared with 82.2% in 2021. It currently offers a quarterly dividend of $0.44 per share, with a yield of 2.86%, as of July 25.
In July, JPMorgan called The Coca-Cola Company (NYSE:KO) a defensive stock with strong underlying momentum. The firm set a $70 price target on the stock with an Overweight rating on the shares.
At the end of Q1 2022, 64 hedge funds in Insider Monkey’s data held over $29 billion worth of stakes in The Coca-Cola Company (NYSE:KO). Among these hedge funds, Berkshire Hathaway was the largest stakeholder of the Georgia-based company in Q1, owning 400 million shares.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here is what the firm had to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
9. Aflac Incorporated (NYSE:AFL)
Dividend Yield as of July 25: 2.89%
Aflac Incorporated (NYSE:AFL) is a Georgia-based insurance company that also provides supplemental insurance in the US.
Aflac Incorporated (NYSE:AFL) reported strong earnings in Q1 2022, with cash and total investments of $132.6 million. The company also spent over $500 million on repurchasing 8 million of its common shares. It currently pays a quarterly dividend of $0.40 per share, with a yield of 2.89%, as of the close of 25. Aflac Incorporated (NYSE:AFL) has been raising its dividends consecutively for the past 39 years. Its dividends are well covered with a safe payout ratio of 22.7%.
According to JPMorgan, the insurance sector is most likely to benefit from higher interest rates and declining Covid cases. In view of this, the firm raised its price target on the stock in July to $62 with a Neutral rating on the shares.
At the end of March 2022, 32 hedge funds reported owning stakes in Aflac Incorporated (NYSE:AFL), up from 31 in the previous quarter. The collective value of these stakes is over $377.6 million.
8. Medtronic plc (NYSE:MDT)
Dividend Yield as of July 25: 3.00%
Medtronic plc (NYSE:MDT) is a Dublin-based medical device company that also provides solutions related to medical technology. The company posted its FY22 results in May and reported nearly $6 billion in free cash flow, up 22% from the previous year. Moreover, it also reported an 18% year-over-year growth in its cash flow from operations at $7.3 billion. Medtronic plc (NYSE:MDT) has been raising its dividends consecutively for the past 44 years. Its current quarterly payout stands at $0.68 per share, with a dividend yield of 3%, as of the close of July 25.
In July, Stifel lowered its price target on Medtronic plc (NYSE:MDT) to $105 due to multiple economic and geopolitical headwinds. However, the firm maintained its Buy rating on the stock.
As per Insider Monkey’s data, 54 hedge funds owned roughly $2 billion worth of stakes in Medtronic plc (NYSE:MDT) in Q1 2022. Diamond Hill Capital was the largest stakeholder of the company in the first quarter.
Polen Capital mentioned Medtronic plc (NYSE:MDT) in its Q1 2022 investor letter. Here is what the firm has to say:
“Ireland-based Medtronic is a leading health care company focused on supplying many important life-saving devices like pacemakers, defibrillators, and insulin pumps. This is another company with attractive pricing power and a business model that can hold up well during inflationary periods. Medtronic has increased market share across almost 70% of its portfolio since the start of the pandemic, which is a higher percentage than even before the pandemic. With growth-oriented companies falling out of favor over the quarter, the stock’s relatively discounted valuation (at approximately 19x earnings) also bolstered its performance.”
7. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of July 25: 3.06%
An American pharmaceutical company, Merck & Co., Inc. (NYSE:MRK) offers a quarterly dividend of $0.69 per share. The company has an 11-year track record of consistent dividend growth, with negative dividend cuts since 1985. Its cash flow generation remained solid in Q1 at $14.7 billion and expects to reach $25 billion in FCF by December 2022. As of July 25, the stock’s dividend yield came in at 3.06%.
In July, UBS lifted its price target on Merck & Co., Inc. (NYSE:MRK) to $98 with a Neutral rating on the shares, expecting earnings growth at the current valuation.
As per Insider Monkey’s data, the elite funds’ interest in Merck & Co., Inc. (NYSE:MRK) increased in Q1 2022, with the company becoming a part of 84 hedge fund portfolios, up from 80 in the previous quarter. These hedge funds owned stakes worth over $5.8 billion in the New Jersey-based company.
Carillon Tower Advisers mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2022 investor letter. Here is what the firm has to say:
“Merck (NYSE:MRK) is a global pharmaceutical and chemicals company based in Germany. Shares fell along with other vaccine-linked names after the U.S. Supreme Court blocked a rule mandating that businesses with more than 100 employees require those employed to either be vaccinated or tested weekly.”
6. The Clorox Company (NYSE:CLX)
Dividend Yield as of July 25: 3.19%
The Clorox Company (NYSE:CLX) is a California-based manufacturer that specializes in cleaning, lifestyle, and household products. In fiscal Q3 2022, the company reported cash and cash equivalents of $241 million, with total assets amounting to over $1.8 billion. It hiked its quarterly dividend by 1.7% on July 12 to $1.18 per share. The company has been a dividend payer for the last 50 years and has raised its dividends 20 years in a row. As of July 25, the stock’s dividend yield came in at 3.19%.
In July, Raymond James initiated its coverage of The Clorox Company (NYSE:CLX) with an Outperform rating and a $160 price target. The firm sees more potential for upside in the next 12 months.
In Q1 2022, 26 hedge funds tracked by Insider Monkey owned stakes in The Clorox Company (NYSE:CLX), down from 39 a quarter earlier. These stakes are collectively valued at nearly $570 million. Renaissance Technologies was the company’s largest stakeholder in Q1.
5. Consolidated Edison, Inc. (NYSE:ED)
Dividend Yield as of July 25: 3.42%
Consolidated Edison, Inc. (NYSE:ED) is a New York-based energy company that deals in energy delivery systems and provides electric, gas, and steam services to consumers. On July 21, the company declared a quarterly dividend of $0.79 per share, in line with its previous dividend. The company has been raising its dividend consecutively for the past 48 years. Its payout ratio of 71.9% is considered safe for the utility sector. As of July 25, the stock’s dividend yield came in at 3.42%.
In June, Mizuho appreciated the clean energy business of Consolidated Edison, Inc. (NYSE:ED) but lowered its price target on the stock to $99 due to the current market situation. However, the firm kept a Buy rating on the stock.
As of the quarter ended March 2022, 26 hedge funds owned stakes in Consolidated Edison, Inc. (NYSE:ED), up from 22 in the previous quarter, according to Insider Monkey’s data. The combined value of these stakes is $485.7 million. AQR Capital Management was the company’s leading shareholder in Q1.
4. Kimberly-Clark Corporation (NYSE:KMB)
Dividend Yield as of July 25: 3.50%
Kimberly-Clark Corporation (NYSE:KMB) produces paper-based consumer products like sanitary papers. The company also manufactures surgical and medical instruments.
In Q2 2022, Kimberly-Clark Corporation (NYSE:KMB) posted solid results, reporting cash from operations at $740 million, up from $565 million during the same period last year. The company paid $388 million in dividends during the quarter, up from $380 million paid at the end of December 2021. Kimberly-Clark Corporation (NYSE:KMB) pays a quarterly dividend of $1.16 per share, with a yield of 3.50%, as of the close of July 25. The company holds a 49-year track record of consistent dividend growth. Its current payout ratio sits at 88.4%.
At the end of Q1 2022, 33 hedge funds in Insider Monkey’s database owned stakes in Kimberly-Clark Corporation (NYSE:KMB), down from 32 in the previous quarter. These stakes are collectively valued at $604.3 million.
3. AbbVie Inc. (NYSE:ABBV)
Dividend Yield as of July 25: 3.80%
An American pharmaceutical company, AbbVie Inc. (NYSE:ABBV) pays a quarterly dividend of $1.41 per share. The company was a subsidiary of Abbott Laboratories and separated from it in 2013. It has been raising its dividends consecutively for the past 50 years. As of July 25, the stock’s dividend yield came in at 3.80%.
In July, Morgan Stanly raised its price target on AbbVie Inc. (NYSE:ABBV) to $191 with an Overweight rating on the shares, ahead of the company’s Q2 earnings.
As per Insider Monkey’s database, 76 hedge funds were bullish on AbbVie Inc. (NYSE:ABBV) in Q1, down from 82 in the previous quarter. These stakes are valued at over $3.6 billion. Among these hedge funds, Arrowstreet Capital was the company’s largest stakeholder in Q1.
Carillon Tower Advisers mentioned AbbVie Inc. (NYSE:ABBV) in its Q1 2022 investor letter. Here is what the firm has to say:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. AbbVie (NYSE:ABBV) is a research-based biopharmaceutical company. Shares gained after the company reported earnings that missed revenue but beat earnings-per-share estimates. Discussion around the report was mixed but skewed positive.”
2. Chevron Corporation (NYSE:CVX)
Dividend Yield as of July 25: 3.94%
Chevron Corporation (NYSE:CVX) is an energy industry company that has operations in over 180 countries. In Q1 2022, the company reported cash and cash equivalents of over $340.7 million, with total assets amounting to $2.62 billion. The company has been growing its dividends for the past 35 years consistently. It currently offers a quarterly payout of $1.42 per share, with a dividend yield of 3.94%, as of July 25. Its payout ratio sits at 51.1%.
In July, HSBC upgraded Chevron Corporation (NYSE:CVX) to Buy from Hold with a $167 price target, expecting the company to raise its buyback guidance.
At the end of Q1 2022, 53 hedge funds in Insider Monkey’s database owned stakes in Chevron Corporation (NYSE:CVX), the same as in the previous quarter. The combined value of these stakes is nearly $28 billion. Warren Buffett, Ken Fisher, and Ken Griffin were some of the company’s prominent stakeholders in the first quarter.
Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
1. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of July 25: 4.04%
Exxon Mobil Corporation (NYSE:XOM) has a very strong dividend history, raising its dividends consecutively for the past 38 years. It currently pays a quarterly dividend of $0.38 per share, with a yield of 4.04%, as of the close of July 25.
In Q1 2022, Exxon Mobil Corporation (NYSE:XOM) generated $14.8 billion in cash flow from operating activities, which is enough for covering capital investments and shareholder distributions. The company also grew its free cash flow to $11 billion during the quarter, from $7 billion in the same period last year. Exxon Mobil Corporation (NYSE:XOM) has a payout ratio of 58.04%.
The number of hedge funds tracked by Insider Monkey owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 83 in Q1 2022, from 71 a quarter earlier. These hedge funds hold a collective stake worth over $8.5 billion.
Saturna Capital mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter. Here is what the firm has to say:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
You can also take a look at 10 Best Solar Energy Stocks to Buy for 2022 and 10 Best Semiconductor Stocks to Buy for 2022
