In this article, we discuss top 25 dividend stocks. You can skip our detailed discussion on dividend investments and the historical performance of dividend stocks, and go directly to read Top 10 Dividend Stocks.
With elevated recession fears and soaring inflation, investors are resorting to dividend-paying stocks considering their historical performance against inflation. According to a report published by Wisdom Tree Investments, dividends have grown by an average of 5.7% from 1957 to 2021, more than 2% above the inflation rate. Additionally, in the last 64 years, dividend levels declined only six times while stock prices fell in 18 years during this period.
Dividend stocks are rewarding for investors as they can generate steady income year after year. Companies that have a solid track record of dividend growth and have endured the volatile market environment are more favored by investors due to their commitment to shareholders. Dividend stocks like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ) are popular in this regard as they have outperformed the broader index in 2022 so far, generating positive returns for shareholders.
In one of his recent interviews, Todd Rosenbluth, head of research at VettaFi, mentioned that advisors are increasingly looking to dividend strategies as a form of income in this current environment. He further mentioned that dividend players were the most popular investments among advisors in terms of getting income higher than treasuries and corporate bonds, according to his firm’s recent survey. Dividend ETFs are also gaining traction among investors as they experienced near-record inflows, amounting to $50 billion in the first half of the year. Moreover, iShares Core High Dividend fell by 0.81% since the start of the year, compared with a 17.4% loss of S&P 500, as of the close of July 25.
Photo by Artem Beliaikin on Unsplash
Our Methodology:
For this list, we chose stocks with strong dividend policies and dividend growth histories. In addition to this, we also considered their financial health and analysts’ ratings. According to our data for the first quarter of 2022, these companies were also famous among 900+ elite funds.
Top 25 Dividend Stocks
25. Eli Lilly and Company (NYSE:LLY)
Dividend Yield as of July 25: 1.19%
Eli Lilly and Company (NYSE:LLY) is an American pharmaceutical company that sells products in over 125 countries globally.
Eli Lilly and Company (NYSE:LLY) has been a dividend-payer since 1885. The company’s dividend growth streak isn’t that long as it kept its dividend flat during the financial crisis of 2008, after growing dividends consecutively for over 40 years. The company has been raising its payouts consecutively for the past eight years. Eli Lilly and Company (NYSE:LLY) currently offers a quarterly dividend of $0.98 per share, up from $0.49 in 2014. This shows that the company has raised its dividend at a CAGR of 9% in the last eight years. As of July 25, the stock’s dividend yield came in at 1.19%.
In July, JPMorgan raised its price target on Eli Lilly and Company (NYSE:LLY) to $395 with an Overweight rating on the shares, expecting the company’s revenues to remain resilient in Q2 2022.
At the end of Q1 2022, 53 hedge funds in Insider Monkey’s database owned stakes in Eli Lilly and Company (NYSE:LLY), down from 61 in the previous quarter. The collective value of these stakes is over $5 billion. Fisher Asset Management was the company’s leading shareholder at the end of March 2022.
In addition to AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), LLY is also one of the prominent dividend candidates of all time.
Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its Q1 2022 investor letter. Here is what the firm has to say:
“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company with a diverse offering primarily focused on therapeutics. Performance was strong mostly due to consistent financial growth powered by its core diabetes (and future obesity) franchise, as well as the constant drumbeat surrounding the Alzheimer’s therapeutic market, of which Eli Lilly has one of the three potential winning blockbuster candidates in Donanemab. We retain conviction in Eli Lilly given the company’s strong long-term growth outlook.”
24. Becton, Dickinson and Company (NYSE:BDX)
Dividend Yield as of July 25: 1.44%
Becton, Dickinson and Company (NYSE:BDX) is a New Jersey-based medical device company that specializes in instrument systems and reagents.
At the end of Q1 2022, Becton, Dickinson and Company (NYSE:BDX) reported $3.14 billion in cash and cash equivalents, up from $2.9 billion in the previous quarter. The company paid $541 million in dividends to shareholders during the quarter, compared with $528 million in Q4 2021. Becton, Dickinson and Company (NYSE:BDX) currently offers a quarterly dividend of $0.87 per share, raising it by 4.8% in November 2021. This was the company’s 50th consecutive year of dividend growth. The company has a safe payout ratio of 53.5%, improving from 116.6% in 2020, according to Morningstar’s data. As of July 25, the stock’s dividend yield came in at 1.44%.
In June, Wells Fargo upgraded Becton, Dickinson and Company (NYSE:BDX) to Overweight with a $275 price target. The firm believes that the company is well-positioned to weather the macro challenges versus some of its peers.
According to Insider Monkey’s database, 49 hedge funds reported owning stakes in Becton, Dickinson and Company (NYSE:BDX) in Q1, down from 54 a quarter earlier. These stakes are collectively valued at over $2.75 billion.
ClearBridge Investments mentioned Becton, Dickinson and Company (NYSE:BDX) in its Q4 2021 investor letter. Here is what the firm has 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 medical equipment (medical device and laboratory supplier Becton Dickinson). 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.”
23. McCormick & Company, Incorporated (NYSE:MKC)
Dividend Yield as of July 25: 1.76%
McCormick & Company, Incorporated (NYSE:MKC) manufactures and markets food products, including spices, condiments, and flavoring products. The company distributes its products to retail outlets and food-centric businesses.
McCormick & Company, Incorporated (NYSE:MKC) ended Q2 2022 with cash and cash equivalents worth $325 million, with total assets amounting to nearly $13 billion. The company’s net cash flow by operating activities came in at $154.4 million. McCormick & Company, Incorporated (NYSE:MKC) paid $198 million in dividends to shareholders during the second quarter, up from $181.6 million paid during the previous quarter. The company has been paying dividends consecutively for the past 98 years while maintaining a 36-year streak of dividend growth.
McCormick & Company, Incorporated (NYSE:MKC)’s quarterly payout stands at $0.37 per share, with a dividend yield of 1.76%, as of the close of July 25.
In July, Argus downgraded McCormick & Company, Incorporated (NYSE:MKC) to Hold due to the company’s modest earnings prospects in the upcoming quarters.
Insider Monkey’s Q1 2022 database shows that McCormick & Company, Incorporated (NYSE:MKC) was a popular stock among elite funds, as 34 hedge funds owned stakes in the Maryland-based company, up from 25 in the previous quarter. The collective value of these stakes stood at over $1.77 billion. With over 15.4 million shares, Fundsmith LLP was the company’s leading shareholder in Q1.
22. Chubb Limited (NYSE:CB)
Dividend Yield as of July 25: 1.80%
Chubb Limited (NYSE:CB) is an American insurance company with headquarters in Zurich, Switzerland. The company provides services related to property and casualty, reinsurance, and life insurance to its customers.
At the end of Q1 2022, Chubb Limited (NYSE:CB) reported over $2.4 billion in operating cash flow, with cash and cash equivalents amounting to over $1.7 billion. The company returned $1.34 billion to shareholders during the quarter, of which $340 million was paid in dividends. Chubb Limited (NYSE:CB) has been raising its dividends consecutively for the past 29 years. It currently pays a quarterly dividend of $0.83 per share, with a yield of 1.80%, as of July 25. Its payout ratio stands at 17.03%, which shows that the company’s dividends are well covered.
In July, Jefferies softened its estimates for the insurance and insurtech sectors due to Russia-related losses. In view of this, the firm lowered its price target on Chubb Limited (NYSE:CB) to $244 but kept a Buy rating on the shares.
At the end of March 2022, 31 hedge funds owned stakes in Chubb Limited (NYSE:CB), worth over $1.8 billion. In the previous quarter, 34 hedge funds held positions in the Zurich-based company, with stakes valued at over $1.7 billion.
Aristotle Capital Management mentioned Chubb Limited (NYSE:CB) in its Q1 2022 investor letter. Here is what the firm has to say:
“Our investment in Chubb began in the fourth quarter of 2015, shortly after ACE Limited announced it would acquire the Chubb Corporation, creating the largest global property and casualty insurance company by underwriting income. During our nearly seven-year holding period, the company’s combination progressed leading to the realization of main catalysts we had identified. These included cost savings, broadened product offerings and an expanded customer base, as well as enhanced distribution capabilities and improved pricing due to scale. In addition, Chubb successfully grew its profitable high-net-worth personal lines. While we still consider Chubb to be a high-quality business, few catalysts remain after what was, in our opinion, a remarkable run of successful business execution. As such, we decided to step aside in favor of what we believe to be a more optimal investment in Blackstone.”
21. A. O. Smith Corporation (NYSE:AOS)
Dividend Yield as of July 25: 1.90%
A. O. Smith Corporation (NYSE:AOS) manufactures residential and commercial water heaters and boilers. The company has over five facilities in North America.
On July 12, A. O. Smith Corporation (NYSE:AOS) declared a quarterly dividend of $0.28 per share, consistent with its previous dividend. The company has been raising its dividend consecutively for the past 29 years, coming through as one of the top dividend stocks. A. O. Smith Corporation (NYSE:AOS) pays 34% of its net income in dividends, which shows that it has enough cash flow left after dividend payments. As of July 25, the stock’s dividend yield stood at 1.90%.
In July, Northcoast initiated its coverage of A. O. Smith Corporation (NYSE:AOS) with a Buy rating and a $75 price target. The firm presented a positive outlook on water infrastructure stocks and mentioned that the demand outlook appears promising.
The number of hedge funds tracked by Insider Monkey owning stakes in A. O. Smith Corporation (NYSE:AOS) grew to 38 in Q1 2022, from 28 a quarter earlier. These hedge funds owned stakes worth over $475.3 million in the Wisconsin-based company. Impax Asset Management was the company’s largest shareholder in Q1.
LRT Capital Management mentioned A. O. Smith Corporation (NYSE:AOS) in its recently-published Q2 2022 investor letter. Here is what the firm has to say:
“A.O. Smith is the largest US manufacturer of residential and commercial water heaters, boilers and water treatment products. The company generates close to $3 billion in annual sales. The majority of the company’s business (73%) is done in North America, with the balance coming from China and India. Approximately 80% of demand is replacing existing heaters and 20% is tied to new construction. The company continues to benefit from a shift towards higher efficiency, but more expensive, tankless heaters.” (Click here for the full text)
20. Archer-Daniels-Midland Company (NYSE:ADM)
Dividend Yield as of July 25: 2.17%
An American food processing company, Archer-Daniels-Midland Company (NYSE:ADM) holds a 48-year track record of consistent dividend growth. The company spent $226 million in dividend payments in the first quarter of 2022, up from $208 million in the previous quarter. It had over $1 billion available in cash and cash equivalents at the end of the quarter. Archer-Daniels-Midland Company (NYSE:ADM) pays a quarterly dividend of $0.40 per share, which is well covered with a payout ratio of 27.8%. As of July 25, the stock’s dividend yield came in at 2.17%.
In May, Baird raised its price target on Archer-Daniels-Midland Company (NYSE:ADM) to $108, with an Outperform rating on the shares, appreciating the company’s Q1 earnings and its momentum towards achieving its 2025 targets.
At the end of March 2022, 42 hedge funds in Insider Monkey’s database held investments in Archer-Daniels-Midland Company (NYSE:ADM), up from 41 in the previous quarter. These investments are collectively valued at over $625.6 million.
Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
19. Colgate-Palmolive Company (NYSE:CL)
Dividend Yield as of July 25: 2.43%
Colgate-Palmolive Company (NYSE:CL) is a New York-based multinational consumer products company that specializes in the production and distribution of household, healthcare, and personal care products.
Colgate-Palmolive Company (NYSE:CL) currently pays a quarterly dividend of $0.47 per share, raising it by 4.4% in March. This was the company’s 60th consecutive year of dividend growth. In Q1 2022, the company paid $378 million in dividends to shareholders, up from $376 million paid during the previous quarter. Its payout ratio stands at 74.6%. As of July 25, the stocks dividend yield was recorded at 2.43%.
In July, JPMorgan lowered its price target on Colgate-Palmolive Company (NYSE:CL) to $78 with a Neutral rating on the shares, as the firm sees mixed profitability for personal care companies despite keeping strong sales growth expectations.
As per Insider Monkey’s database for Q1 2022, 50 hedge funds owned stakes in Colgate-Palmolive Company (NYSE:CL), up from 48 in the previous quarter. The collective value of these stakes is roughly $2.6 billion.
18. Genuine Parts Company (NYSE:GPC)
Dividend Yield as of July 25: 2.48%
Genuine Parts Company (NYSE:GPC) is a Georgia-based company that specializes in the distribution of automotive replacement parts and electronic materials.
In the first quarter of 2022, Genuine Parts Company (NYSE:GPC) generated $398.8 million in operating cash flow, up from $300.9 million in the same period last year. The company’s free cash flow came in at $320.8 million during the quarter and expects it to fall between $1.2 billion and $1.4 billion by the end of 2022. Genuine Parts Company (NYSE:GPC) paid $115.8 million in dividends during Q1, compared with $114 million paid during the previous quarter.
Genuine Parts Company (NYSE:GPC) pays a quarterly dividend of $0.895 per share, with a dividend yield of 2.48%, as of the close of July 25. The company has been raising its dividends consecutively for the past 66 years. Its payout ratio sits at 51.7%.
At the end of Q1 2022, 29 hedge funds in Insider Monkey’s database owned stakes in Genuine Parts Company (NYSE:GPC), the same as in the previous quarter. These stakes hold a combined value of over $457 million. Arrowstreet Capital held the largest stake in the company, worth $111.5 million.
17. Illinois Tool Works Inc. (NYSE:ITW)
Dividend Yield as of July 25: 2.55%
Illinois Tool Works Inc. (NYSE:ITW) is a manufacturing company that manufactures industrial products and equipment. In Q1 2022, the company reported $323 million in operating cash flow and $249 million in free cash flow. The company expects its FCF to grow by 10% to 20% at the end of the fiscal year and expects to repurchase $1.5 billion of its own shares.
Illinois Tool Works Inc. (NYSE:ITW) maintains a 51-year track record of dividend growth, falling into the category of Dividend Aristocrats. The company pays a quarterly dividend of $1.22 per share, with a dividend yield of 2.55%, as of the close of July 25. It has a payout ratio of 56.4% and a five-year payout ratio average of 55.6%.
In July, Wells Fargo lowered its price target on Illinois Tool Works Inc. (NYSE:ITW) to $180 on account of currency fluctuations and negative guidance revisions for the multi-industry sector. The firm kept an Equal Weight rating on the stock.
According to Insider Monkey’s data, 36 hedge funds owned stakes in Illinois Tool Works Inc. (NYSE:ITW), valued at nearly $426 million. In the previous quarter, 29 hedge funds held positions in the Illinois-based company, with stakes valued at over $408.7 million.
16. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of July 25: 2.55%
An American consumer goods company, The Procter & Gamble Company (NYSE:PG) pays a quarterly dividend of $0.9133 per share. In Q1 2022, the company paid over $2.2 billion in dividends and expects the amount to reach $8 billion in FY22. The company holds a 66-year track record of consistent dividend growth and has a payout ratio of 66%. The stock’s dividend yield came in at 2.55%, as of the close of July 25.
In July, Wells Fargo mentioned The Procter & Gamble Company (NYSE:PG) in its investors’ note, appreciating the company’s unique position to weather the current market situation. The firm set a $160 price target on the stock with an Overweight rating on the shares.
The Procter & Gamble Company (NYSE:PG) was a popular stock among elite funds in Q1, as 72 hedge funds in Insider Monkey’s database owned stakes in the company, up from 67 in the previous quarter. These stakes are collectively valued at over $6 billion. With roughly 10 million shares, GQG Partners was the company’s leading shareholder.
15. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of July 25: 2.63%
Johnson & Johnson (NYSE:JNJ), a pharmaceutical industry company, raised its quarterly dividend by 6.6% in April to $1.13 per share. This was the company’s 60th consecutive year of dividend growth, with a 5-year CAGR of 5.87%. As of July 25, the stock’s dividend yield was recorded at 2.63%.
In July, Wells Fargo raised its price target on Johnson & Johnson (NYSE:JNJ) to $195 with an Overweight rating on the shares, appreciating the company’s strong earnings.
At the end of Q1 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Johnson & Johnson (NYSE:JNJ), the same as in the previous quarter. These stakes are collectively valued at over $7.4 billion. Arrowstreet Capital owned over 6.6 million shares in the New Jersey-based company, becoming its largest stakeholder in Q1.
14. PepsiCo, Inc. (NASDAQ:PEP)
Dividend Yield as of July 25: 2.71%
PepsiCo, Inc. (NASDAQ:PEP) is a New York-based beverage company. Recently, Morgan Stanley called beverages a ‘preferred sector’ for investors due to the worsening economic backdrop. In view of this, the firm raised its price target on the stock to $198 with an Overweight rating on the shares.
In Q1 2022, PepsiCo, Inc. (NASDAQ:PEP) paid nearly $3 billion in dividends to shareholders, up from $2.8 billion paid during the previous quarter. For FY22, the company expects to return $6.2 billion in dividends. On July 21, PepsiCo, Inc. (NASDAQ:PEP) announced a quarterly dividend of $1.15 per share, with a yield of 2.71%, as of July 25. The company maintains a 49-year streak of dividend growth. Its five-year average payout ratio stands at 71.1% and its current payout ratio came in at 65.8%.
At the end of Q1 2022, 62 hedge funds tracked by Insider Monkey held stakes in PepsiCo, Inc. (NASDAQ:PEP), up from 60 in the previous quarter. These stakes hold a collective value of over $4.8 billion.
ClearBridge Investments mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q4, 2021 investor letter. Here is what the firm said:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
13. Air Products and Chemicals, Inc. (NYSE:APD)
Dividend Yield as of July 25: 2.76%
Air Products and Chemicals, Inc. (NYSE:APD) sells gases and chemicals for industrial uses. In fiscal Q2 2022, the Pennsylvania-based company paid over $664.7 million to shareholders in dividends, up from $592.7 million in the previous quarter. The company pays a quarterly dividend of $1.62 per share, with a yield of 2.76%, as of July 25. It has been raising its dividends consistently for the past 40 years. Air Products and Chemicals, Inc. (NYSE:APD) has a payout ratio of 62.6%.
Due to the ongoing inflation and slow economic growth of the industrial sector, Cowen lowered its price target on Air Products and Chemicals, Inc. (NYSE:APD) to $305 but kept an Overweight rating on the shares.
The number of hedge funds tracked by Insider Monkey owning stakes in Air Products and Chemicals, Inc. (NYSE:APD) stood at 39 in Q1 2022, compared with 40 a quarter earlier. These stakes are collectively valued at nearly $900 million. Renaissance Technologies was the company’s leading shareholder in the first quarter.
ClearBridge Investments mentioned Air Products and Chemicals, Inc. (NYSE:APD) in its Q1 2022 investor letter. Here is what the firm has to say:
“While commodities-exposed areas of the materials sector such as mining and steel fared well in the quarter, we tend to have less direct exposure to commodities across our portfolio. Holdings like industrial gas company Air Products and Chemicals (NYSE:APD) faced sharp input cost escalation, driving meaningful margin compression, which was not well-received by investors. While negative in the short term, we remain confident that the company will be able to adjust pricing accordingly and recover margins over the medium term.”
12. Johnson Controls International plc (NYSE:JCI)
Dividend Yield as of July 25: 2.77%
Johnson Controls International plc (NYSE:JCI) is an Ireland-based multinational company that specializes in security equipment for buildings. In Q1 2022, the company reported cash from operating activities at $68 million and a free cash flow of $193 million. It spent $239 million in dividend payments during the quarter, up from $187 million paid in the previous quarter. Johnson Controls International plc (NYSE:JCI) has been making consecutive dividend payments since 1887 while maintaining a 36-year track record of dividend growth.
In July, Mizuho lowered its price target of Johnson Controls International plc (NYSE:JCI) to $65 due to the slow demand for industrial products. However, the firm kept a Buy rating on the stock.
At the end of Q1 2022, 44 hedge funds owned stakes in Johnson Controls International plc (NYSE:JCI), up from 42 in the previous quarter, according to Insider Monkey’s database. These stakes are worth over $1.4 billion. Citadel Investment Group was the company’s largest stakeholder in Q1.
Aristotle Capital mentioned Johnson Controls International plc (NYSE:JCI) in its Q1 2022 investor letter. Here is what the firm has to say:
“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Controls. Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”
11. Stanley Black & Decker, Inc. (NYSE:SWK)
Dividend Yield as of July 25: 2.78%
A Connecticut-based manufacturing company, Stanley Black & Decker, Inc. (NYSE:SWK) hiked its quarterly dividend by 1.3% on July 20. The company currently offers a quarterly payout of $0.80 per share, with a yield of 2.78%, as of the close of July 25. Stanley Black & Decker, Inc. (NYSE:SWK) has been raising its dividends consecutively for the past 55 years.
In July, Deutsche Bank highlighted the challenging environment for the industrial sector and lowered its price target on Stanley Black & Decker, Inc. (NYSE:SWK) to $128 while maintaining a Buy rating on the shares.
At the end of Q1 2022, 38 hedge funds tracked by Insider Monkey owned investments in Stanley Black & Decker, Inc. (NYSE:SWK), worth over $922 million. In comparison, 42 hedge funds held over $1.3 billion worth of stakes in the company in the previous quarter.
Like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), Stanley Black & Decker, Inc. (NYSE:SWK) is favored by investors and analysts in this current market situation.
Saturna Capital mentioned Stanley Black & Decker, Inc. (NYSE:SWK) in its Q3 2021 investor letter. Here is what the firm has to say:
“Stanley Black &Decker performed well through the first part of the year but struggled over the summer. China accounts for much of its production, and their zero-tolerance approach to pandemic safety measures has led to disruption, compounded by shipping difficulties and rising materials expenses. We still believe one outcome of the pandemic will be a buoyant home improvement market, given that one never knows when the next pandemic lockdown may occur.”
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Disclosure. None. Top 25 Dividend Stocks is originally published on Insider Monkey.
