Yield is not the be-all and end-all when it comes to finding the best dividend stocks. Regular dividend increases over a long period of time and solid company fundamentals can not be beaten when it comes to dividend investing.
Starting the research on dividend plays utilizing the Dividend Aristocrats Index can be a good start, however, long-term investors know that there are certain high-quality companies that haven’t made that list just yet.
If on the lookout for dividend stocks to invest in for 2022, the following five companies should be on investors’ watchlists due to their continued dividend increase, payout, and rising revenues.
Johnson & Johnson (NYSE: JNJ)
If looking to put the focus on ‘conventional’ stocks then it doesn’t get better than J&J, which is arguably one of the best dividend stocks for 2022. This blue-chip stock has been paying out regular dividends to shareholders for six consecutive decades. They supplemented this feat by also raising the dividend payout each year.
The current dividend stands at 2.33% and is pretty secure even in turbulent market times. Their diversification across three major business segments of medical devices, pharmaceuticals, and consumer health brands adds fortitude to this dividend stock.
Emerson Electric (NYSE: EMR)
With a reasonable annual yield of 2.15%, plenty of cash flow, and a record of 66 consecutive years of annual payout boost, this company is a no-brainer for dividend investors.
Emerson Electric serves customers in various industries and makes things as varied as devices pharmaceutical companies need to make medicines to the equipment needed to fuel cars.
Besides its legacy business of providing automation solutions to companies, Emerson is also investing in future businesses such as the hydrogen economy. With generated revenue of $18.2 billion in 2021 and an outlook for this performance to continue, investors can rest assured that there will be enough cash flow to cover dividends.
PepsiCo (NASDAQ: PEP)
Market participants learned that the predicted long-term slide in sales of carbonated beverages was a secular trend. Grand View Research predicts that carbonated beverages will have an annual growth rate of 4.7% all the way to 2028.
But PepsiCo is not only a beverage company, their snack business is equally as strong, boasting the most popular snack brands such as Doritos, Rold Gold pretzels, and many others. The hard data shows that the company had its 49th straight annual dividend increase in 2021.
The annual dividend now stands at 2.49%, with strong predicted growth for the company and the market niches it is serving the dividend seems secure and ready to continue increasing in 2022 as well.
3M (NYSE: MMM)
To end Q4 2021 the company reported record revenue growth, income, and earnings per share, Fears of inflation affecting the ability of the company to raise margins has pummeled the stock making the 3M one of the poorer performers in the Dow Index.
Annual revenue grew by 12% and net income by 22% which more than ensures dividend payout and stability for this behemoth. 3M is considered to be a Dividend King – a company that has raised its dividend for at least 50 consecutive years.
The yield currently stands at 3.5% and even if the stock underperforms the market this year the yield is secure thanks to revenue growth and cash flow the company has.
Walmart (NYSE: WMT)
The discount retail king that operates in 26 countries is a free cash flow machine. It has maintained a 49-year streak of consecutive dividend increases with the current yield standing at 1.43%. Shareholders can count on the continuation of this positive trend as the company’s operating income for 2021 grew by 5.9%.
Same-store sales in the U.S. grew an amazing 6.4% and e-commerce sales grew 11% despite tough competition in the space. This shows that consumers are showing interest in Walmart’s initiatives to steer the company in the right direction.
Sticking to the gameplan
Long-term investors know that having an investment strategy is a must to weather tough market conditions and deal with emotions when the markets go down. Market crashes are an investment inevitability.
Being invested in strong companies that have amazing track records and are still growing their sales can help investors sleep better at night. Couple that with income from dividends, then it seems that being patient is all that is required to be successful.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.