In this article, we discuss 10 best high-yield dividend stocks for retirees in 2022. You can skip our detailed analysis of dividend investment for a retirement portfolio, and go directly to read 5 Best High-Yield Dividend Stocks for Retirees in 2022.
Staying financially afloat during retirement in the US is hard and requires rigorous planning and portfolio adjustment. According to a survey conducted by Schroders, 44% of retirees believe that expenses in retirement are higher than they expected. The survey also highlighted that 57% of retirees had less than $250,000 saved at retirement, which is significantly less than an estimated amount of $1.1 million required to retire comfortably.
According to CNBC, Nancy Davis, founder and managing partner of Quadratic Capital Management, believes that market volatility poses the biggest risk to those who are retired. Retirees are not getting any monthly paychecks and are relying on the income from their investments in retirement plans, Social Security, and pensions.
In the current market environment, investors are advised to rebalance their portfolios to increase their long-term earnings. In an interview with CNBC, Omar Aguilar, CEO at Schwab Asset Management, said that that investors should focus on the long-term investment targets and plan their portfolios strategically according to that. He further mentioned that a diversified approach is the best way to rebalance the portfolios which would be helpful to weather the current clampdown.
In addition to this, stocks that generate steady streams of income should be investors’ priority to comfortably live off their income. In this regard, high-yield dividend stocks are considered a suitable option, as they can be a hedge against inflation, considering the spike in prices globally. According to a report published by Charles Schwab, stocks that grew and initiated their dividends between 1981 and 2020 delivered an annual average return of 13.7%, compared with a 9.60% return of those stocks that did not pay dividends. Some of the most notable dividend stocks that are grabbing investors’ attention these days include The Coca-Cola Company (NYSE:KO), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ). In this article, we will focus on some other high-yield dividend stocks for retirees.
Image by Mike Flynn from Pixabay
Our Methodology:
We chose dividend stocks with yields above 3%, as recorded on August 21. These stocks have safe dividends based on their balance sheets and have the ability to generate cash, which is rewarding for retirees. In addition to this, these companies have the potential to grow their dividends in the future as well and can be good opportunities for retirees in the current market situation. These stocks are also popular among elite funds, according to Insider Monkey’s Q2 2022 data.
10 Best High-Yield Dividend Stocks for Retirees in 2022
10. Black Hills Corporation (NYSE:BKH)
Dividend Yield as of August 21: 3.01%
Black Hills Corporation (NYSE:BKH) is a South Dakota-based diversified energy company that sells power throughout the American West. The company maintains one of the longest dividend growth records in the utility sector, growing its payouts consistently for the past 51 years. It pays a quarterly dividend of $0.595 per share and has a yield of 3.01%, as of August 21.
In Q2 2022, Black Hills Corporation (NYSE:BKH) reported strong cash generation with an operating cash flow of $178 million and $20.8 million in free cash flow. The company’s revenue jumped 27.3% year-over-year to $474.2 million. In addition to this, it also reported $72.4 million in net income in Q2, compared with $67.3 million in the previous quarter.
As of the close of Q2 2022, 19 hedge funds in Insider Monkey’s database owned stakes in Black Hills Corporation (NYSE:BKH), up from 16 in the previous quarter. These stakes hold a collective value of over $111.3 million. Among these hedge funds, Millennium Management was the company’s leading stakeholder in Q2.
In addition to popular dividend stocks like The Coca-Cola Company (NYSE:KO), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ), Black Hills Corporation (NYSE:BKH) can be a good retirement dividend stocks because of the consistent growth in its payouts.
9. Eastman Chemical Company (NYSE:EMN)
Dividend Yield as of August 21: 3.08%
Eastman Chemical Company (NYSE:EMN) is a global chemical industry company that manufactures a wide range of advanced materials, chemicals, and fibers. Appreciating the company’s strong Q2 2022 results, RBC Capital raised its price target on the stock to $98 in August and maintained a Sector Perform rating on the shares.
Eastman Chemical Company (NYSE:EMN) pays a quarterly dividend of $0.76 per share, raising it by 10% in October 2021. This marked the company’s 12th consecutive year of dividend growth. As of August 21, the stock’s dividend yield stood at 3.08%.
In Q2 2022, Eastman Chemical Company (NYSE:EMN) generated $245 million in operating cash flow, up significantly from $17 million in the previous quarter. The company’s free cash flow came in at $106 million. In the first half of the year, it paid $948 million to shareholders in dividends and share repurchases. The company’s dividends are well covered within a payout ratio of 32.4%.
With stakes worth over $59 million, Two Sigma Advisors held the largest position in the company. In addition to this, 29 hedge funds tracked by Insider Monkey owned stakes in the Tennessee-based company in Q2 2022, valued at over $308.8 million.
8. Flowers Foods, Inc. (NYSE:FLO)
Dividend Yield as of August 21: 3.10%
Flowers Foods, Inc. (NYSE:FLO) is a Georgia-based bakery company that produces and markets packed bakery foods. At the end of Q2 2022, the company was a part of 24 hedge fund portfolios, compared with 25 a quarter earlier. These hedge funds owned total stakes worth over $327.7 million in the company.
Flowers Foods, Inc. (NYSE:FLO) offers a quarterly dividend of $0.22 per share and has a yield of 3.10%, as of August 21. The company has raised its dividends for 20 years in a row and has paid uninterrupted dividends for consecutive 79 quarters.
In Q2 2022, Flowers Foods, Inc. (NYSE:FLO) reported a 10.8% year-over-year growth in its revenue to $1.13 billion. The company paid $93.4 million to shareholders in dividends during the first half of 2022, up from $89 million paid in December 2021. It ended the quarter with $162.5 million available in cash and cash equivalents.
7. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield as of August 21: 3.12%
An American multinational tech company, Cisco Systems, Inc. (NASDAQ:CSCO) was appreciated at Deutsche Bank in August due to its constructive messaging around customer demand and top-line trends. In view of this, the firm raised its price target on the stock to $54.
In fiscal Q4 2022, Cisco Systems, Inc. (NASDAQ:CSCO) reported revenue of $13 billion, which beat estimates by $320 million. The company’s strong cash flow generation enabled it to return nearly $4 billion to shareholders during the quarter, $1.6 billion of which represented dividend payments. This takes the company’s payout ratio to 53.1%.
On June 6, Cisco Systems, Inc. (NASDAQ:CSCO) declared a quarterly dividend of $0.38 per share, consistent with its previous dividend. The company maintains an 11-year track record of consistent dividend growth. The stock’s dividend yield was recorded at 3.12% on August 21.
At the end of Q2 2022, 63 hedge funds in Insider Monkey’s database reported owning stakes in Cisco Systems, Inc. (NASDAQ:CSCO), down from 66 a quarter earlier. These stakes hold a total value of roughly $2 billion.
Carillon Tower Advisers mentioned Cisco Systems, Inc. (NASDAQ:CSCO) in its Q1 2022 investor letter. Here is what the firm has to say:
“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”
6. Kimberly-Clark Corporation (NYSE:KMB)
Dividend Yield as of August 21: 3.39%
Kimberly-Clark Corporation (NYSE:KMB) is an American multinational manufacturing company that produces paper-based consumer products.
In Q2 2022, Kimberly-Clark Corporation’s (NYSE:KMB) cash from operations stood at $740 million, up from $565 million during the same period last year. The company paid $388 million in dividends in the first half of 2022, 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 3.39%, as recorded on August 21. The company holds a 49-year track record of consistent dividend growth. Its current payout ratio sits at 88.4%.
As of the close of Q2 2022, 24 hedge funds in Insider Monkey’s database owned stakes in Kimberly-Clark Corporation (NYSE:KMB), down from 33 in the previous quarter. These stakes hold a collective value of $507.2 million. Ray Dalio, Ken Griffin, and Cliff Asness were the company’s major stakeholders in Q2.
Kimberly-Clark Corporation (NYSE:KMB) is considered one of the safest stocks for retirees along with The Coca-Cola Company (NYSE:KO), AbbVie Inc. (NYSE:ABBV), and Johnson & Johnson (NYSE:JNJ).
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Disclosure. None. 10 Best High-Yield Dividend Stocks for Retirees in 2022 is originally published on Insider Monkey.
