In this article, we discuss 10 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).
5. The Scotts Miracle-Gro Company (NYSE:SMG)
Dividend Yield as of August 21: 3.43%
The Scotts Miracle-Gro Company (NYSE:SMG) is an Ohio-based multinational corporation that manufactures and sells consumer lawn, garden, and pest control products. In fiscal Q3 2022, the company reported cash and cash equivalents of over $27.8 million, while its total assets stood at over $2.5 billion. Its cash flow generation also remained stable, reporting $463 million in operating cash flow and $430 million in free cash flow. The Scotts Miracle-Gro Company (NYSE:SMG) has a safe dividend payout ratio of 36.2%.
On August 2, The Scotts Miracle-Gro Company (NYSE:SMG) declared a quarterly dividend of $0.66 per share, in line with its previous dividend. The company holds a 12-year streak of dividend growth, coming through as one of the best stocks for retirees. As of August 21, the stock’s dividend yield came in at 3.43%.
As of the close of Q2 2022, 25 hedge funds in Insider Monkey’s database owned stakes in The Scotts Miracle-Gro Company (NYSE:SMG), up from 19 in the previous quarter. These stakes are valued at over $142.8 million. First Eagle Investment Management was the company’s largest stakeholder in Q2, owning over 1.7 million shares.
4. ManpowerGroup Inc. (NYSE:MAN)
Dividend Yield as of August 21: 3.44%
ManpowerGroup Inc. (NYSE:MAN) is an American multinational company that specializes in staffing and also provides innovative workforce solutions. In Q2 2022, the company reported revenue of over $5.1 billion and its gross profit margin came in at 18.2%. It ended the quarter with cash and cash equivalents of $886.2 million and its total assets stood at over $6.4 billion.
ManpowerGroup Inc. (NYSE:MAN) is one of the best retirement stocks because of its distinct dividend policy of offering semi-annual dividends. It pays a dividend of $1.36 per share twice a year, raising it by 7.9% in May. The company has been hiking its dividend consecutively for the past 13 years. As of August 21, the stock’s dividend yield stood at 3.44%.
As the labor/supply-demand imbalance is still near record highs, Baird lowered its estimates on the staffing sector in July. Given this, the firm set a $94 price target on ManpowerGroup Inc. (NYSE:MAN) with an Outperform rating on the shares.
Insider Monkey’s data shows that 24 hedge funds owned stakes in ManpowerGroup Inc. (NYSE:MAN) in Q2 2022, down from 25 in the previous quarter. These stakes are collectively valued at roughly $170 million.
3. Spire Inc. (NYSE:SR)
Dividend Yield as of August 21: 3.58%
Spire Inc. (NYSE:SR) is an American natural gas distribution company that provides related services to its consumers.
Spire Inc. (NYSE:SR) is one of the most suitable options for a retirement portfolio as it has been making continuous dividend payments since 1946. In addition to this, the company has also raised its dividends for 19 years in a row. It pays a quarterly dividend of $0.685 per share, with a yield of 3.58%, as of August 21.
In June, Mizuho raised its price target on Spire Inc. (NYSE:SR) to $77, highlighting the higher natural gas prices due to the ongoing geo-political issues.
Hudson Bay Capital Management owned the largest stake in Spire Inc. (NYSE:SR) in Q2 2022, valued at over $14.5 million. In addition to this, 16 hedge funds in Insider Monkey’s database owned stakes in the Missouri-based company, with a collective value of over $34 million.
2. Chevron Corporation (NYSE:CVX)
Dividend Yield as of August 21: 3.60%
An American multinational energy company, Chevron Corporation (NYSE:CVX) reported an operating cash flow of over $13.7 billion in Q2 2022, up from $8 billion in the previous quarter. The company’s free cash flow generation was also stable, standing at $10.6 billion, compared with $6 billion in Q1. Its revenue for the quarter jumped by 82.9% year-over-year to $68.7 billion.
In 2022, Chevron Corporation (NYSE:CVX) extended its dividend growth streak to 35 years. It pays a quarterly dividend of $1.42 per share, with a dividend yield of 3.60%, as of August 21.
On August 10, Credit Suisse initiated its coverage of Chevron Corporation (NYSE:CVX) with an Outperform rating and an unchanged price target of $202.
The number of hedge funds owning stakes in Chevron Corporation (NYSE:CVX) grew to 59 in Q2 2022, from 53 in the previous quarter, as recorded by Insider Monkey. These stakes own a combined value of over $26 billion.
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. ALLETE, Inc. (NYSE:ALE)
Dividend Yield as of August 21: 4.11%
ALLETE, Inc. (NYSE:ALE) is a Minnesota-based electric services company that provides energy and also invests in transmission infrastructure. The company was a popular stock among money managers in Q2 2022, as 22 hedge funds owned positions in the company, up from 16 in the previous quarter, according to Insider Monkey’s data. The stakes owned by hedge funds have a total value of over $107.2 million.
ALLETE, Inc. (NYSE:ALE) has one of the strongest dividend policies, offering uninterrupted payouts to shareholders since 1950. It’s quarterly dividend stands at $0.65 per share, with a dividend yield of 4.11%, as recorded on August 21.
In Q2 2022, ALLETE, Inc. (NYSE:ALE) reported revenue of $373 million, showing an 11.2% year-over-year growth. The company ended first six months of the year with $74.6 million available in cash and cash equivalents, up from $45 million at the end of December. Its cash generation is strong as it pays 71.3% of its net income in dividends.
You can also take a look at Low-Risk Retirement Portfolio: Top 10 Stocks and 10 Dividend ETFs to Buy in August
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Disclosure. None. 10 Best High-Yield Dividend Stocks for Retirees in 2022 is originally published on Insider Monkey.
