10 Dividend Stocks to Buy for Financial Freedom

Published May 16, 2022 at 9:20 am EDT Updated August 19, 2026 at 7:52 am EDT

In this article, we discuss 10 dividend stocks to buy for financial freedom.

According to Goldman Sachs, investors expect higher share repurchases and increasing dividends in 2022. The investment bank raised the buyback estimate to $1 trillion, 12% more than in 2021, which is almost an all-time high. Goldman Sachs also increased its dividend growth projections to 10% from 8%, with energy stocks leading the dividend payments, driven by soaring oil prices and robust cash flows.

On March 29, Vanguard’s 2022 U.S. growth outlook remained unchanged at 3.5%, despite Russia’s invasion of Ukraine, which led to higher uncertainty in the global economy. The Fed has also indicated higher rate hikes ahead. Soaring oil prices have added inflationary pressure to the economy and downside risks to GDP growth.

Dividends are an effective hedge against inflation, and investors gravitate towards passive income opportunities to earn extra money. Entering the stock market to gain financial freedom, investing in dividend paying stocks is a lucrative strategy. Some of the most notable dividend stocks to buy for financial freedom include Johnson & Johnson (NYSE:JNJ), JPMorgan Chase & Co. (NYSE:JPM), and PepsiCo, Inc. (NASDAQ:PEP), among others discussed in detail below.

Our Methodology

We selected dividend stocks that have been consistent with dividend payments over the years, have solid business operations, and robust balance sheets. We have mentioned the analyst ratings for the stocks, which were carefully screened based on optimistic analyst sentiment as well.

Data from 900+ elite hedge funds tracked by Insider Monkey in Q4 2021 was used to identify the number of hedge funds that hold stakes in each company.

Photo by Zach Betten on Unsplash

Dividend Stocks to Buy for Financial Freedom

10. Bank of America Corporation (NYSE:BAC)

Dividend Yield as of May 12: 2.43%

Number of Hedge Fund Holders: 84

Bank of America Corporation (NYSE:BAC) was founded in 1784 and is based in Charlotte, North Carolina. The company offers financial products and services via Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets segments. Bank of America Corporation offers a dividend yield of 2.43% as of May 12.

On April 18, Bank of America Corporation reported earnings for Q1 2022, posting an EPS of $0.80, beating analysts’ estimates by $0.06. The revenue of $23.23 billion revenue surpassed market predictions by $135.77 million. On May 5, Bank of America Corporation announced that credit and debit card spending in April increased 13% compared to the same period last year, with credit card spending climbing 22% and debit card spending by 6%.

Bank of America Corporation declared on April 27 a $0.21 per share quarterly dividend, in line with previous. The dividend is payable on June 24, to shareholders of record on June 3. The bank also announced a regular quarterly dividend of $1.75 per share on the 7% Series B Cumulative Redeemable Preferred Stock. The dividend is payable on July 25, to shareholders of record on July 8.

Oppenheimer analyst Chris Kotowski on May 3 maintained an Outperform rating on Bank of America Corporation but lowered the price target on the shares to $50 from $52. According to the analyst, loan growth and soaring interest rates are good for the banking industry even amid a recession. He believes that banks should remain “solidly profitable with their dividends intact” and investors should take advantage of the recent share weakness.

According to Insider Monkey’s Q4 data, Bank of America Corporation was found in the public stock portfolios of 84 hedge funds, up from 72 funds in the last quarter. Bank of America Corporation is a notable dividend payer in Warren Buffett’s Berkshire Hathaway portfolio, with the hedge fund holding more than 1 billion shares worth about $45 billion. Berkshire Hathaway is the leading shareholder of the company as of Q4 2021.

Here is what ClearBridge Investments has to say about Bank of America Corporation in its Q1 2021 investor letter:

“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”

9. JPMorgan Chase & Co. (NYSE:JPM)

Dividend Yield as of May 12: 3.45%

Number of Hedge Fund Holders: 107

JPMorgan Chase & Co. is an American multinational financial services corporation, providing investment management, banking, and lending products and services to consumers and corporations. JPMorgan Chase & Co.’s Q1 revenue of $30.72 billion outperformed estimates by $318.51 million.

JPMorgan Chase & Co. has consistently raised dividends for the last 11 years, making it a notable portfolio addition for financial freedom. The company declared a $1.00 per share quarterly dividend on March 15, which was distributed to shareholders on April 30. JPMorgan Chase & Co.’s dividend yield on May 12 came in at 3.45%.

On May 3, Oppenheimer analyst Chris Kotowski upgraded JPMorgan Chase & Co. to Outperform from Perform with a $167 price target, citing loan growth and rising interest rates positioning banks as strong contenders even during a recession. He believes investors should use the recent share weakness as a buy opportunity and noted that JPMorgan Chase & Co. has over 30% upside potential in the 12-18 months ahead.

According to Insider Monkey’s Q4 database, 107 hedge funds placed long calls on JPMorgan Chase & Co., up from 101 funds in the earlier quarter. The total stakes held in Q4 amounted to $6.5 billion, compared to $5.6 billion in Q3. Ken Fisher’s Fisher Asset Management owned the biggest position in the company, with 7.4 million shares worth $1.17 billion.

In addition to Johnson & Johnson, JPMorgan Chase & Co., and PepsiCo, Inc., elite investors are pouring into JPMorgan Chase & Co..

Here is what Ariel Investments has to say about JPMorgan Chase & Co. in its Q4 2021 investor letter:

“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.

“In our view, inflation will not just be a 2021 phenomenon.”

Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”

8. The Coca-Cola Company (NYSE:KO)

Dividend Yield as of May 12: 2.76%

Number of Hedge Fund Holders: 70

The Coca-Cola Company (NYSE:KO), an American multinational beverage corporation, is a reliable dividend king. 2022 marks the 60th consecutive annual dividend increase at The Coca-Cola Company. On April 27, the company declared a $0.44 per share quarterly dividend, in line with previous. The dividend is distributable on July 1, to shareholders of record on June 15.

The Coca-Cola Company reported on April 25 earnings for the first fiscal quarter of 2022. The company announced an EPS of $0.64, beating market estimates by $0.06. Revenue for the period grew 16.44% year-over-year to $10.50 billion, topping analysts’ predictions by about $671 million.

On May 9, BofA added The Coca-Cola Company to the firm’s “US 1” list, which is a compilation of its top investment ideas from the universe of Buy-rated, American securities covered by the firm’s fundamental equity research analysts.

Ken Griffin’s Citadel Investment Group is a significant shareholder of The Coca-Cola Company, with 10.6 million shares valued at $632.6 million. Overall, 70 hedge funds were bullish on the stock at the end of December 2021.

Here is what ClearBridge Investments Dividend Strategy has to say about The Coca-Cola Company in its Q4 2021 investor letter:

“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.”

7. Altria Group, Inc. (NYSE:MO)

Dividend Yield as of May 12: 6.94%

Number of Hedge Fund Holders: 39

Altria Group, Inc. (NYSE:MO) has increased its dividends for 52 years in a row, making it a prominent dividend king to buy for financial freedom. The company manufactures and sells smokeable and oral tobacco products in the United States. Altria Group, Inc. posted on April 28 earnings per share for the first fiscal quarter of 2022, amounting to $1.12, beating market consensus by $0.03.

Altria Group, Inc.’s dividend yield on May 12 stood at 6.94%, significantly higher than the consumer staples average yield of 1.89%. The company declared on February 25 a $0.90 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on April 29.

On April 29, Deutsche Bank analyst Steve Powers reiterated a Buy recommendation on Altria Group, Inc. and raised the firm’s price target on stock to $60 from $54 following the Q1 results.

Among the hedge funds tracked by Insider Monkey, 39 funds reported owning stakes worth over $1 billion in Altria Group, Inc. at the end of the fourth quarter of 2021, compared to 45 funds in the prior quarter worth about $830 million. Rajiv Jain’s GQG Partners held the biggest position in Altria Group, Inc., with 9.17 million shares valued at $435 million.

Here is what Broyhill Asset Management has to say about Altria Group, Inc. in its Q2 2021 investor letter:

“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.

MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”

6. Exxon Mobil Corporation (NYSE:XOM)

Dividend Yield as of May 12: 4.15%

Number of Hedge Fund Holders: 71

Exxon Mobil Corporation (NYSE:XOM) is an American multinational oil and gas corporation, providing crude oil, oil products, natural gas, and petrochemicals. The company is also engaged in power generation. Exxon Mobil Corporation has paid dividends to shareholders consistently for more than 100 years, with dividend increases stretching back to 39 consecutive years.

On April 27, Exxon Mobil Corporation declared a quarterly dividend of $0.88 per share, in line with previous. The dividend is distributable on June 10, to shareholders of record on May 13. Exxon Mobil Corporation’s dividend yield on May 12 stood at 4.15%.

Argus analyst Bill Selesky on May 9 maintained a Buy rating on Exxon Mobil Corporation and raised the firm’s price target on the stock to $104 from $92. The analyst expects Exxon Mobil Corporation to be a beneficiary of the strong energy market. In addition to that, the company’s positive catalysts include an improving balance sheet, lower capital spending, and greater free cash flow. The analyst lifted his 2022 EPS estimate to $9.52 from $6.40, owing to the projections for continued high commodity prices over the rest of the year. He sees further upside in Exxon Mobil Corporation shares.

Exxon Mobil Corporation is a favorite oil stock of institutional investors. According to Insider Monkey’s database, 71 hedge funds held long positions in Exxon Mobil Corporation at the conclusion of Q4 2021, up from 64 funds in the earlier quarter. Jean-Marie Eveillard’s First Eagle Investment Management owned a prominent stake in the company, worth $1.45 billion.

Like Johnson & Johnson, JPMorgan Chase & Co., and PepsiCo, Inc., institutional investors gravitate towards Exxon Mobil Corporation for dividend income.

Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation in its Q3 2021 investor letter:

“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.

What should Chevron expect?

It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects.

According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”

5. PepsiCo, Inc. (NASDAQ:PEP)

Dividend Yield as of May 12: 2.71%

Number of Hedge Fund Holders: 60

2022 was the 50th consecutive year of dividend increases for PepsiCo, Inc., marking it as a prominent dividend king to invest in for financial freedom. On May 3, the company declared a $1.15 per share quarterly dividend, a 7% increase from its last dividend of $1.075. The dividend is payable on June 30, to shareholders of record on June 3.

PepsiCo, Inc. announced on April 26 its fiscal Q1 results, posting earnings per share of $1.29, beating consensus estimates by $0.06. The GAAP EPS of $3.06 also exceeded forecasts by $1.83. PepsiCo, Inc.’s revenue for the period grew 9.31% year-over-year to $16.20 billion, outperforming analysts’ predictions by $658.69 million.

On April 27, JPMorgan analyst Andrea Teixeira kept an Overweight rating on PepsiCo, Inc. and raised the price target on the stock to $186 from $183. The analyst views the company’s updated 2022 guidance as conservative and told investors that its underlying performance continues to impress.

In Q4 2021, Terry Smith’s Fundsmith LLP was the biggest PepsiCo, Inc. shareholder, with 10.4 million shares worth $1.80 billion. Overall, 60 hedge funds were bullish on the stock at the end of December 2021.

Here is what ClearBridge Investments had to say about PepsiCo, Inc. in its Q4 2021 investor letter:

“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.”

4. Chubb Limited (NYSE:CB)

Dividend Yield as of May 12: 1.57%

Number of Hedge Fund Holders: 34

Chubb Limited (NYSE:CB) was incorporated in 1985 and is headquartered in Zurich, Switzerland, providing insurance and reinsurance products worldwide. Chubb Limited is a reliable dividend stock to buy for financial freedom. The company is heading towards its 29th consecutive annual dividend increase to shareholders in 2022.

On April 26, Chubb Limited reported Q1 earnings per share of $3.82, beating consensus estimates by $0.34. The last quarterly dividend of $0.80 per share was declared on February 24, which was paid to shareholders on April 8.

Raymond James analyst C. Gregory Peters on April 28 reiterated a Strong Buy rating on Chubb Limited and raised the firm’s price target on the shares to $250 from $240 after Q1 results came in above consensus estimates. While the analyst expects rate increases to continue to moderate, he believes rates will remain above loss cost trends through FY22.

According to Insider Monkey’s database, 34 hedge funds were bullish on Chubb Limited at the end of December 2021, up from 30 funds in the earlier quarter. The total stakes owned in Q4 amounted to $1.7 billion, compared to $1.2 billion in Q3. Billionaire Andreas Halvorsen’s Viking Global is the largest shareholder of the company, with 3.6 million shares worth $713.6 million.

Here is what Davis Funds has to say about Chubb Limited in their Q4 2020 investor letter:

“Chubb is now among the Fund’s largest P&C holdings at 5.2% and illustrates well why we thought there was an opportunity to add to our P&C names. Through September 30, 2020, Chubb had returned −24% for the year, reflecting investors’ fears that (1) the insurance industry would be compelled to cover substantial business interruption claims that were never intended as part of insured’s policies, (2) declining long-term rates would diminish the value of “float” (i.e., customers’ funds that insurers get to hold and invest until claims are paid), and (3) adverse trends (pre-dating the pandemic) in insured loss rates (e.g., rising litigation and settlement costs, increased frequency and severity of catastrophe losses, etc.).

With industry economics already soft, it was only a matter of time before insurance pricing would have to adjust. In fact, P&C pricing had already begun to increase in a number of business lines before COVID hit, and that trend has only increased and broadened since then. Chubb disclosed in Q3 2020 that North American commercial P&C pricing increased by more than 15% in aggregate. Some of the price increase will go to cover rising insurance loss rates, but we certainly do anticipate some dropping into underwriting profit too. Admittedly, some of that increased underwriting profit will itself get offset by a decline in investment income owing to lower interest rates, but that is a “feature,” if you will, of P&C insurance companies. Unlike a bank, where the floor on its deposit funding costs practically speaking is zero, there is in theory no reason underwriting profit cannot increase to offset low interest rates, so it is feasible for its earnings to “normalize” far in advance of an eventual rise in long-term rates. (Click here to read full text)

3. General Dynamics Corporation (NYSE:GD)

Dividend Yield as of May 12: 2.26%

Number of Hedge Fund Holders: 48

General Dynamics Corporation (NYSE:GD) is a Virginia-based aerospace and defense company that operates via four segments – Aerospace, Marine Systems, Combat Systems, and Technologies. General Dynamics Corporation’s dividend yield on May 12 came in at 2.26%, and the board approved its 25th consecutive annual dividend hike in 2022.

On March 2, General Dynamics Corporation declared a $1.26 per share quarterly dividend, a 5.9% increase from its prior dividend of $1.19. The dividend was distributed on May 6, to shareholders of the company as of April 8.

General Dynamics Corporation reported its first quarter financial results on April 27, posting earnings per share of $2.61, above consensus by $0.09. The Q1 revenue of $9.39 billion also outperformed analysts’ predictions by $371.23 million.

Susquehanna analyst Charles Minervino on April 28 maintained a Positive rating on General Dynamics Corporation and raised the price objective on the shares to $285 from $280. The analyst observed that the company continues to benefit from a strong recovery in the business jet market due to the robust Aerospace orders, which should generate high revenue growth and margin expansion in the coming years.

According to Insider Monkey’s Q4 data, 48 hedge funds were long General Dynamics Corporation, up from 36 funds in the prior quarter. James A. Star’s Longview Asset Management held the largest stake in the company, with more than 30 million shares worth $6.2 billion.

Here is what Oakmark Global Fund has to say about General Dynamics Corporation in their Q1 2021 investor letter:

“The second new U.S. equity purchase was General Dynamics, a leading U.S. defense contractor and owner of the world’s premier business jet franchise (Gulfstream). We were able to purchase this high-quality and durable business at a meaningful discount to our estimate of its intrinsic value after a series of near-term concerns hurt its share price. Taking a longer term view, the company’s business jet franchise should benefit from a multi-year investment program in new, differentiated products. Also, its free cash flow conversion is set to improve materially and the company is poised to benefit from a highly visible ramp up in revenue related to next generation nuclear-powered submarines. As these positives come into clearer view, we expect sentiment to improve, along with the company’s share price.”

2. Atmos Energy Corporation (NYSE:ATO)

Dividend Yield as of May 12: 2.43%

Number of Hedge Fund Holders: 20

Atmos Energy Corporation (NYSE:ATO) is a Texas-based company that offers regulated natural gas distribution, as well as gas pipelines and storage in the United States. Atmos Energy Corporation declared on May 4 a $0.68 per share quarterly dividend, payable on June 6, to shareholders of record on May 23. The company has raised its dividend payouts for 37 years consistently.

On May 4, Atmos Energy Corporation reported earnings for the first fiscal quarter of 2022. The company posted an EPS of $2.37, beating consensus estimates by $0.03. The Q1 revenue came in at $1.65 billion, up 25.07% year-over-year, outperforming analysts’ predictions by $256.51 million.

Wells Fargo analyst Sarah Akers maintained an Overweight rating on Atmos Energy Corporation and raised the price target on the shares to $130 from $120 on May 5. With fiscal Q2 in the books, Atmos Energy Corporation updated the 2022 EPS guidance range to $5.50-5.60, the analyst noted. She remains impressed by Atmos Energy Corporation’s execution, which is driven by strong underlying customer growth and constructive regulatory treatment.

According to Insider Monkey’s fourth quarter database, 20 hedge funds were long Atmos Energy Corporation, up from 16 funds in the preceding quarter. Rajiv Jain’s GQG Partners held the largest position in the company, with 3.5 million shares worth $375.2 million.

1. Johnson & Johnson (NYSE:JNJ)

Dividend Yield as of May 12: 2.56%

Number of Hedge Fund Holders: 83

Johnson & Johnson, the American multinational healthcare corporation, is one of the most notable dividend stocks. 2022 marked the 60th annual dividend increase at Johnson & Johnson, which merits its inclusion in our list of dividend stocks to buy for financial freedom.

On April 19, Johnson & Johnson declared a $1.13 per share quarterly dividend, a 6.6% increase from its prior dividend of $1.06. The dividend is payable on June 7, to shareholders of the company as of May 24. Johnson & Johnson’s dividend yield on May 12 stood at 2.56%.

Citi analyst Joanne Wuensch on April 20 reiterated a Buy recommendation on Johnson & Johnson and raised the price target on the shares to $210 from $203. The company’s Q1 results reflected a recovery across the business balanced by expense and currency headwinds, the analyst told investors. The core business “seems to be gaining its footing with forward commentary fairly robust”, said the analyst.

According to Insider Monkey’s Q4 database, 83 hedge funds were bullish on Johnson & Johnson, with collective stakes worth $7.3 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a prominent shareholder of the company, with 4.8 million shares worth $829.3 million.

You can also take a look at 10 Best Micro-Cap Stocks to Buy According to Hedge Funds and 10 Growth ETFs to Buy Now.

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