In this article, we discuss 10 highest-yielding dividend aristocrats for 2022.
Dividend aristocrats are S&P 500 constituents that have raised their dividends annually for at least 25 consecutive years.
In the volatile macro backdrop, dividend stocks have decidedly been classified as effective inflation hedges. Big companies can withstand inflationary pressure and even benefit from higher prices, which in turn allows them to consistently pay dividends to shareholders. As inflation persists, revenue, earnings, and dividends will increase over the immediate and long-term as companies adjust to the new market dynamics.
Dividend payouts have accounted for about 40% of total stock market returns historically. Dividend aristocrats are solid market contenders that have a robust history of sharing profits with shareholders, solid cash flows, and a stable earnings profile. The most notable dividend aristocrats include Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), and The Procter & Gamble Company (NYSE:PG), however, we discuss the highest-yielding dividend aristocrats for 2022 in this article.
Our Methodology
We scoured the S&P 500 dividend aristocrats list for 2022 and selected the 10 highest-yield companies. For further context on each stock, we have mentioned the hedge fund sentiment, analyst ratings, latest available earnings, and number of years of consecutive dividend increases. Dividend yields as of May 6 are listed for all companies.
Insider Monkey’s database tracks 900+ elite hedge funds as of Q4 2021, and it was used to gauge the hedge fund sentiment around the holdings.
Photo by lucas Favre on Unsplash
Highest-Yielding Dividend Aristocrats for 2022
10. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Dividend Yield as of May 6: 4.33%
Number of Hedge Fund Holders: 42
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) was founded in 1901 and is based in Deerfield, Illinois. The company operates as a health and beauty retail company. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) has paid a dividend for 89 years and has raised the payouts for 46 consecutive years.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) reported earnings for the quarter ending February 2022 on March 31, posting an EPS of $1.59, above consensus by $0.19. The $33.76 billion revenue also outperformed market forecasts by $422.74 million.
On April 28, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) declared a $0.4775 per share quarterly dividend, in line with previous. The dividend is payable on June 10, to shareholders of record on May 20. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)’s dividend yield on May 6 stood at 4.33%, making it one of the highest-yielding dividend aristocrats for 2022.
Cowen analyst Charles Ryhee on April 12 maintained an Outperform rating on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) but lowered the firm’s price target on the shares to $50 from $55. The analyst updated his estimates after commentary on Q2 results. He believes his long-term thesis for Walgreens Boots Alliance, Inc. (NASDAQ:WBA) remains solid but noted that the short-term macro backdrop is a headwind.
According to Insider Monkey’s Q4 data, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) was found in the public stock portfolios of 42 hedge funds, up from 37 funds in the preceding quarter. Stephen Dubois’ Camber Capital Management is the largest shareholder of the company, with 3.50 million shares worth $182.56 million.
In addition to Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), and The Procter & Gamble Company (NYSE:PG), elite investors are piling into Walgreens Boots Alliance, Inc. (NASDAQ:WBA).
Here is what Miller Howard Investments has to say about Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q3 2021 investor letter:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
9. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of May 6: 4.83%
Number of Hedge Fund Holders: 44
International Business Machines Corporation (NYSE:IBM) is an American multinational technology company providing integrated solutions through Software, Consulting, Infrastructure, and Financing segments. International Business Machines Corporation (NYSE:IBM)’s dividend yield on May 6 stood at 4.83%.
International Business Machines Corporation (NYSE:IBM) declared on April 26 a $1.65 per share quarterly dividend, a 0.6% increase from its last dividend of $1.64. The dividend is payable on June 10, for shareholders of record on May 10. 2022 is the 27th year consecutive year that the company has increased its quarterly cash dividend.
On April 19, International Business Machines Corporation (NYSE:IBM) reported its financial results for the first fiscal quarter of 2022. The company announced earnings per share of $1.40, topping analysts’ predictions by $0.01. The $14.20 billion revenue dropped about 20% year-over-year but outperformed consensus estimates by approximately $353 million.
BofA analyst Wamsi Mohan on April 20 raised the price target on International Business Machines Corporation (NYSE:IBM) to $165 from $162 and kept a Buy rating on the shares after the company announced “solid” Q1 results and reported a “strong” outlook for 2022.
In the fourth quarter of 2021, 44 hedge funds were long International Business Machines Corporation (NYSE:IBM), compared to 41 funds in the prior quarter. The total stakes owned in Q4 amounted close to $1.3 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a significant shareholder of the company, with a position worth $440.5 million.
Here is what St. James Investment Company has to say about International Business Machines Corporation (NYSE:IBM) in its Q4 2021 investor letter:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties, and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
8. Realty Income Corporation (NYSE:O)
Dividend Yield as of May 6: 4.49%
Number of Hedge Fund Holders: 30
Realty Income Corporation (NYSE:O) is a significant dividend aristocrat that has increased the monthly dividend 115 times since it became publicly listed in 1994. Realty Income Corporation (NYSE:O) is a real estate investment trust that owns and leases out single tenant commercial properties in the United States, Spain, and the United Kingdom.
On May 4, Realty Income Corporation (NYSE:O) posted its Q1 results, reporting an FFO of $0.98, beating estimates by $0.01. The revenue of $807.3 million jumped 82.3% year-over-year, outperforming market consensus by $58.61 million. The REIT also invested $1.56 billion in 213 properties, development, and expansion, including $796.4 million in Europe. The company expects a 2022 normalized FFO between $3.88 and $4.05, compared to a $3.95 consensus. Portfolio occupancy was 98.6% on March 31, 2022.
Wolfe Research analyst Andrew Rosivach on March 15 upgraded Realty Income Corporation (NYSE:O) to Outperform from Peer Perform.
Realty Income Corporation (NYSE:O) declared a $0.247 per share monthly dividend on April 13, in line with previous. The dividend is payable on May 13, for shareholders of the company at the close of business on May 2.
According to Insider Monkey’s Q4 database, Realty Income Corporation (NYSE:O) was found in the public stock portfolios of 30 hedge funds, compared to 22 funds in the last quarter. Matthew Barrett’s Glendon Capital Management is the largest stakeholder of the company, with 1.85 million shares worth approximately $133 million.
7. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of May 6: 3.88%
Number of Hedge Fund Holders: 71
Exxon Mobil Corporation (NYSE:XOM) was established in 1870 and is headquartered in Irving, Texas. It operates via Upstream, Downstream, and Chemical divisions, selling crude oil, natural gas, petroleum products, petrochemicals, and other specialty products. The company has raised its annual dividend payment to shareholders for 39 consecutive years.
Exxon Mobil Corporation (NYSE:XOM) reported on April 29 its Q1 2022 financial results, posting an EPS of $2.07, falling short of analysts’ predictions by $0.16. Revenue for the period climbed 53% year-over-year to $90.50 billion, outperforming consensus estimates by $6.93 billion.
On April 27, Exxon Mobil Corporation (NYSE:XOM) declared a quarterly dividend of $0.88 per share, in line with previous. The dividend is distributable on June 10, for shareholders of record on May 13. The company delivers a dividend yield of 3.88% as of May 6.
Cowen analyst Jason Gabelman on May 2 raised the price target on Exxon Mobil Corporation (NYSE:XOM) to $90 from $77 and reiterated a Market Perform rating on the stock. The analyst observed that earnings should benefit from industry leading refining exposure, however, Q2 will see some headwinds from higher maintenance across its portfolio. He also noted that Exxon Mobil Corporation (NYSE:XOM) intends to repurchase $15 billion per year in 2022 and 2023, effectively expanding and extending its buyback program.
Among the hedge funds tracked by Insider Monkey, 71 funds were long Exxon Mobil Corporation (NYSE:XOM) at the end of the fourth quarter of 2021, up from 64 funds in the last quarter. Rajiv Jain’s GQG Partners is the leading shareholder of the company, with 32.3 million shares worth about $2 billion.
Here is what Goehring & Rozencwajg Associates has to say about Exxon Mobil Corporation (NYSE:XOM) 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.”
6. Amcor plc (NYSE:AMCR)
Dividend Yield as of May 6: 3.74%
Number of Hedge Fund Holders: 24
Amcor plc (NYSE:AMCR) develops and sells flexible and rigid packaging products in Europe, North America, Latin America, Africa, and the Asia Pacific regions. The company was incorporated in 2018 and is headquartered in Zürich, Switzerland. On May 6, Amcor plc (NYSE:AMCR)’s dividend yield came in at 3.74%.
Amcor plc (NYSE:AMCR) declared on May 3 a $0.12 per share quarterly dividend, in line with previous. The dividend is distributable on June 14, to shareholders of the company at the close of business on May 25.
On May 5, Amcor plc (NYSE:AMCR) reported earnings for the first fiscal quarter of 2022. The company posted an EPS of $0.20, ahead of analysts’ estimates by $0.01. The Q1 revenue climbed 15.62% year-over-year to $3.71 billion, above market consensus by $272.64 million.
BofA analyst George Staphos downgraded Amcor plc (NYSE:AMCR) to Underperform from Buy with a price target of $12.30, down from $13.40. The analyst told investors that he has always viewed the stock as high quality and “bond-like”, but he sees other “fundamentally-equivalent specialty packagers” with comparatively attractive prices amid higher rates, some headwinds from Russia, and potential resin increases.
According to Insider Monkey’s Q4 data, 24 hedge funds were long Amcor plc (NYSE:AMCR), up from 19 funds in the prior quarter. Bernard Horn’s Polaris Capital Management is the largest shareholder of the company, with 13.3 million shares worth $160.3 million.
Like Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), and The Procter & Gamble Company (NYSE:PG), Amcor plc (NYSE:AMCR) is a notable dividend aristocrat to look out for.
5. T. Rowe Price Group, Inc. (NASDAQ:TROW)
Dividend Yield as of May 6: 3.82%
Number of Hedge Fund Holders: 30
T. Rowe Price Group, Inc. (NASDAQ:TROW) is an American global investment management firm that specializes in mutual funds, advisory services, and retirement planning, among other financial services. T. Rowe Price Group, Inc. (NASDAQ:TROW)’s dividend yield on May 6 stood at 3.82%.
On April 28, T. Rowe Price Group, Inc. (NASDAQ:TROW) reported its Q1 results, posting earnings per share of $2.62, missing estimates by $0.14. The $1.86 billion revenue outperformed analysts’ predictions by $687,130.
T. Rowe Price Group, Inc. (NASDAQ:TROW) declared on February 8 a $1.20 per share quarterly dividend, an 11.1% increase from its last dividend of $1.08, marking the 36th consecutive year since the company’s public listing that it will have increased its common annual dividend. The dividend was paid to shareholders on March 30.
T. Rowe Price Group, Inc. (NASDAQ:TROW) announced on May 4 that it has joined the Net Zero Asset Managers initiative to promote net zero greenhouse gas emissions by 2050 or sooner. The company is solidifying its commitment to offering investment products for customers with net zero goals.
BMO Capital analyst James Fotheringham reiterated an Outperform rating on T. Rowe Price Group, Inc. (NASDAQ:TROW) but lowered the firm’s price target on the stock to $160 from $204. The analyst cited the company’s Q1 earnings miss and revised expense guidance, slashing his FY22 EPS view to $11.38 from $12.50, and noting that market depreciation poses a risk to his new estimates. However, the analyst still projects “modest organic growth” and sees upside potential for T. Rowe Price Group, Inc. (NASDAQ:TROW)’s earnings multiple, which is presently at “only” 10-times expected forward earnings.
According to Insider Monkey’s Q4 database, T. Rowe Price Group, Inc. (NASDAQ:TROW) was found in the public stock portfolios of 30 hedge funds, compared to 35 funds in the prior quarter. Cliff Asness’ AQR Capital Management is the largest shareholder of the company, with 710,753 shares worth $139.7 million.
4. Franklin Resources, Inc. (NYSE:BEN)
Dividend Yield as of May 6: 4.64%
Number of Hedge Fund Holders: 29
Franklin Resources, Inc. (NYSE:BEN) is a public asset management holding company that specializes in equity, fixed income, balanced, and multi-asset mutual funds. Franklin Resources, Inc. (NYSE:BEN) delivers a dividend yield of 4.64% as of May 6.
On February 23, Franklin Resources, Inc. (NYSE:BEN) declared a $0.29 per share quarterly dividend, a 4.0% increase from its prior dividend of $0.28. The dividend was distributed to shareholders on April 14. The company has been increasing its dividends for 42 consecutive years.
Franklin Resources, Inc. (NYSE:BEN) reported on May 3 its financial results for Q1 2022. The company announced earnings per share of $0.96, beating analysts’ estimates by $0.15. The $2.08 billion revenue also outperformed market consensus by $1.50 million.
Citi analyst William Katz on April 12 downgraded Franklin Resources, Inc. (NYSE:BEN) to Neutral from Buy with a price target of $28, down from $44.50. Ahead of U.S. asset manager Q1 earnings season, the analyst slashed earnings projections through 2024, lowered 12-month target prices, and restacked his relative sector ranks. The analyst sees higher attrition risk for Franklin Resources, Inc. (NYSE:BEN).
Among the hedge funds tracked by Insider Monkey, 29 funds were bullish on Franklin Resources, Inc. (NYSE:BEN) at the end of December 2021, with collective stakes worth over $401 million. Ken Griffin’s Citadel Investment Group is the largest shareholder of the company, with 3.2 million shares worth $109.4 million.
3. Leggett & Platt, Incorporated (NYSE:LEG)
Dividend Yield as of May 6: 4.53%
Number of Hedge Fund Holders: 21
Leggett & Platt, Incorporated (NYSE:LEG) has a reliable dividend history, with 50 years of consistent dividend growth under its belt. The company designs and manufactures engineered components and products, operating via Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products segments.
On May 2, Leggett & Platt, Incorporated (NYSE:LEG) reported its Q1 2022 financial results. The company announced an EPS of $0.66, topping analysts’ predictions by $0.10. Revenue for the period grew almost 15% year-over-year to $1.32 billion, ahead of market forecasts by $63.78 million.
Leggett & Platt, Incorporated (NYSE:LEG) declared on February 22 a $0.42 per share quarterly dividend, a 5.0% increase from its prior dividend of $0.40. The dividend was distributed on April 15. Leggett & Platt, Incorporated (NYSE:LEG)’s dividend yield on May 6 came in at 4.53%.
Raymond James analyst Bobby Griffin downgraded Leggett & Platt, Incorporated (NYSE:LEG) to Market Perform from Outperform without a price target on May 4. The analyst told investors that the downgrade is due to the recent slowdown and uncertainty surrounding home durables demand in 2022, as well as the tight global supply chain. The analyst also does not see a high possibility of material upside to financial results in the short-term as management’s guidance already reflects a reacceleration in sales volume.
In Q4 2021, 21 hedge funds were bullish on Leggett & Platt, Incorporated (NYSE:LEG), up from 16 funds in the earlier quarter. Billionaire Israel Englander’s Millennium Management is the largest shareholder of the company, with 1.16 million shares worth $47.8 million.
2. 3M Company (NYSE:MMM)
Dividend Yield as of May 6: 4.03%
Number of Hedge Fund Holders: 41
3M Company (NYSE:MMM) is a diversified American technology company that operates through four segments – Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. 2022 marks the 64th consecutive year of dividend increases by 3M Company (NYSE:MMM).
On February 8, 3M Company (NYSE:MMM) declared a $1.49 per share quarterly dividend, a 0.7% increase from its last dividend of $1.48. The dividend was distributed on March 12, to shareholders of record on February 18. 3M Company (NYSE:MMM)’s dividend yield on May 6 stood at 4.03%.
3M Company (NYSE:MMM) reported on April 26 its earnings for the first fiscal quarter of 2022. The company posted an EPS of $2.65, topping market estimates by $0.34. The $8.83 billion revenue also surpassed analysts’ predictions by $81.35 million. The GAAP EPS of $2.26, however, missed Street forecasts by $0.05.
Argus analyst John Eade downgraded 3M Company (NYSE:MMM) to Hold from Buy on April 28. The analyst cited the company’s Q1 earnings miss that came in light of underperformance over the last quarter. He added that while 3M Company (NYSE:MMM) delivers value with its 4.1% dividend yield, he “has doubts” about its earnings outlook.
According to Insider Monkey’s Q4 data, 41 hedge funds were bullish on 3M Company (NYSE:MMM), compared to 46 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the leading shareholder of the company, with 5.7 million shares worth over $1 billion.
1. V.F. Corporation (NYSE:VFC)
Dividend Yield as of May 6: 4.17%
Number of Hedge Fund Holders: 21
V.F. Corporation (NYSE:VFC) was founded in 1899 and is headquartered in Denver, Colorado. The company designs and markets branded apparel, footwear, and fashion products for men, women, and children. V.F. Corporation (NYSE:VFC)’s dividend yield on May 6 stood at 4.17%.
On January 28, V.F. Corporation (NYSE:VFC) declared a $0.50 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on March 21. V.F. Corporation (NYSE:VFC) has increased its dividend for 49 years in a row.
Wells Fargo analyst Ike Boruchow downgraded V.F. Corporation (NYSE:VFC) to Equal Weight from Overweight, slashing the price target to $58 from $75. With the V.F. Corporation (NYSE:VFC) equity driven by Vans, the analyst expects the company success to remain limited as the Vans brand works to regain momentum under new brand head, Doug Palladini. The analyst noted that any long-term brand targets around Vans issued by V.F. Corporation (NYSE:VFC) are likely to delay long-term growth targets to fiscal 2024 and beyond.
According to Insider Monkey’s database, V.F. Corporation (NYSE:VFC) was found in the public stock portfolios of 21 hedge funds at the end of Q4 2021, compared to 23 funds in the last quarter. Ric Dillon’s Diamond Hill Capital is the largest shareholder of the company, with 5.90 million shares worth $432.3 million.
You can also take a look at 10 Favorite Stocks of Dan Loeb’s Third Point and 10 Best Micro-Cap Stocks to Buy According to Hedge Funds.
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Disclosure: None. 10 Highest-Yielding Dividend Aristocrats for 2022 is originally published on Insider Monkey.
