10 Safe Dividend Stocks for 2022

In this article, we are going to talk about our list of the 10 safe dividend stocks to buy in 2022.

For veteran and amateur investors alike, dividend stocks present the best opportunity to retire early and receive added monthly, quarterly, or yearly income. To understand this better, consider how Warren Buffett made approximately $4.6 billion in dividend payments from his holdings in 2021, excluding capital gains and other profits made.

A recent study by Goldman Sachs projected that the S&P 500 will increase dividend payments by about 6% through 2022. This is a nod of approval to those looking to further enhance their portfolios by opting for dividend stocks that boast a history of consistent and increasing dividend payouts. Admittedly, 2020 was not a great year for dividend stocks, as many companies couldn’t afford to pay dividends and subsequently halted or reduced them. But the road towards recovery, ignited by rising vaccination rates, has once again surged investor interest in dividend stocks.

Some of the most notable long-term dividend stocks include The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ) and Verizon Communications Inc. (NYSE:VZ), among others discussed in detail below.

Photo by Dan Dennis on Unsplash

Our Methodology

We gauged each stock’s dividend history, and selected only those with many consecutive years of increasing dividend payments. We also added analyst ratings, business fundamentals, growth potentials, as well as latest news around each stock in order to paint a clear picture for our readers. Hedge fund sentiment around each stock was derived using Insider Monkey’s database of 867 elite hedge funds.

10 Safe Dividend Stocks for 2022

10. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Dividend Yield: 2.47% (as of January 4)

No. of Years of Consecutive Dividend Increase: 59

Starting off our list of 10 safe dividend stocks to buy is Johnson & Johnson (NYSE:JNJ), a healthcare products giant which deals through its segments: Consumer Health, Pharmaceutical, and Medical Devices. The company has one of the longest track-records of paying out dividends, having done so since 1989. In October, Johnson & Johnson (NYSE:JNJ) declared a $1.06 per share quarterly dividend, with its shares trading on the New York Stock Exchange at $171.40 as of January 4.

By the end of the third quarter, 88 hedge funds out of 867 from Insider Monkey’s database reported owning stakes in Johnson & Johnson (NYSE:JNJ), with a combined value of $6.87 billion. The same number of hedge funds reported owning stakes in the company a quarter ago as well.

On December 15, Citi analyst Joanne Wuensch kept a ‘Buy’ rating on Johnson & Johnson (NYSE:JNJ) shares, raising the price target from $192 to $195. The analyst notes that successive pandemic waves will eventually subside and utilization will pick up pace again, driving revenue growth for medical supply stocks.

Along with The Coca-Cola Company (NYSE:KO) and Verizon Communications Inc. (NYSE:VZ), Johnson & Johnson (NYSE:JNJ)  is one of the safest long-term dividend stocks to buy and hold in 2022.

9. Prosperity Bancshares, Inc. (NYSE:PB)

Number of Hedge Fund Holders: 16

Dividend Yield: 2.77% (as of January 4)

No. of Years of Consecutive Dividend Increase: 18

Up next on this list is Prosperity Bancshares, Inc. (NYSE:PB), a Texas-based bank holding company which provides retail and commercial banking services to consumers and businesses. As of January 4, the firm’s stock price rose 9.26% in the last 12 months.

Prosperity Bancshares, Inc. (NYSE:PB) posted an EPS of $1.39 for the third quarter, beating estimates by $0.02. Quarterly revenue amounted to $283.76 million, outperforming estimates by $3.93 million. In October, the Texas bank posted a quarterly dividend of $0.52 per, which is a 6.1% increase from the prior dividend of $0.49. Prosperity Bancshares, Inc. (NYSE:PB) is well positioned to benefit from an interest rate hike, given that its loan portfolio mostly consists of variable and floating-rate loans.

16 hedge funds were long Prosperity Bancshares, Inc. (NYSE:PB) at the end of the third quarter, holding a combined value of $102.63 million. The same number of hedge funds held stakes in the company a quarter ago as well. AQR Capital Management was the leading shareholder in Prosperity Bancshares, Inc. (NYSE:PB). The fund held approximately 363,000 shares worth $25.82 million in the company at the close of the third quarter.

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

Number of Hedge Fund Holders: 61

Dividend Yield: 2.78% (as of January 4)

No. of Years of Consecutive Dividend Increase: 59

Next up is The Coca-Cola Company (NYSE:KO), a dividend-paying giant that has been pleasing shareholders with payouts since 1989. The beverage-maker reported $10.4 billion in revenue for Q3 2021, exceeding estimates by $321.89 million. Earnings per share for the quarter stood at $0.65, beating consensus estimates by $0.07. The company possesses extraordinary pricing power to handle the most challenging economic ups-and-downs, and its asset-light business model, along with the brand leadership, give it a dominant position in the market as a very attractive business.

On December 13, JPMorgan analyst Andrea Teixeira upgraded The Coca-Cola Company (NYSE:KO) stock to ‘Overweight’ from ‘Neutral’, increasing the price target to $63 from $59. The analyst believes that the company’s sales momentum will build into 2022, driven by “reopening and pricing”.

As for the third quarter, 61 hedge funds held stakes in The Coca-Cola Company (NYSE:KO), worth $25.13 billion. In comparison, 62 hedge funds held $24.96 billion worth of stakes in the company a quarter ago. Warren Buffett’s Berkshire Hathaway is the leading shareholder of The Coca-Cola Company (NYSE:KO), with 400 million shares valued at approximately $21 billion.

7. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 74

Dividend Yield: 2.91% (as of January 4)

No. of Years of Consecutive Dividend Increase: 11

Then there’s Pfizer Inc. (NYSE:PFE), the biopharmaceutical company and the maker of the popular Covid vaccine. The company’s EPS for the third quarter came in at $1.34, which beat estimates by $0.25. Revenue of $24.09 billion was also above estimates by $1.28 billion. In December, Pfizer Inc. (NYSE:PFE) posted a $0.40 per share quarterly dividend, which was a 2.6% increase from the prior dividend of $0.39.

On December 15, BofA analyst Geoff Meacham kept a ‘Neutral’ rating on Pfizer Inc. (NYSE:PFE) shares, raising the price target to $54 from $48. The analyst notes that the market reacted favorably to the company’s announcement of an agreement to acquire Arena Pharmaceuticals (NASDAQ:ARNA) for $6.7 billion, which will help smooth its coming loss of exclusivity patent cliff.

Investors were seen loading up on Pfizer Inc. (NYSE:PFE) stock. 74 hedge funds out of 867 tracked by Insider Monkey reported owning stakes in the company at the end of the third quarter. In comparison, 67 hedge funds held stakes in Pfizer Inc. (NYSE:PFE) at the close of the second quarter.

Saturn Capital, an investment firm, mentioned Pfizer Inc. (NYSE:PFE) in its Q3 investor letter. Here’s what the fund said:

“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”

6. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 46

Dividend Yield: 3.28% (as of January 4)

No. of Years of Consecutive Dividend Increase: 63

3M Company (NYSE:MMM) is a provider of safety, industrial and consumer goods, and operates through its segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. The company boasts 63 consecutive years of dividend increase, and has seen its revenue, free cash flow, and net income increase over the last 5 years with a gross profit margin above 40%, and a profit margin exceeding 15%.

Investors are bullish on 3M Company (NYSE:MMM) stock, as 46 hedge funds reported owning stakes in the company worth $1.62 billion at the end of the third quarter. In contrast, 42 hedge funds held stakes in the firm a quarter earlier.

In addition to 3M Company (NYSE:MMM), Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO),  and Verizon Communications Inc. (NYSE:VZ) are some of the best dividend stocks investors can buy in 2022.

5. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)

Number of Hedge Fund Holders: 37

Dividend Yield: 3.55% (as of January 4)

No. of Years of Consecutive Dividend Increase: 6

Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a pharmacy-led health and beauty retail chain, with almost 9000 retail drugstores in the United States, and 4000 stores in 8 other countries. The firm has raised its dividend payout for 46 consecutive years, and has seen its share price rise since the sale of its Alliance Healthcare Business in late 2020. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is investing heavily towards growth and expansion.

The retail giant posted an EPS of $1.17 for the third quarter, beating estimates by $0.15. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) raked in $34.26 billion in quarterly revenue, outperforming estimates by $869.13 million.

On October 15, Truist analyst David MacDonald raised the firm’s price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $56 from $52, reiterating a ‘Hold’ rating on the company shares. The analyst cites the company’s strategic initiative into healthcare with the launch of Walgreens Health segment as a positive catalyst, and notes that its investments into key areas should drive long-term growth.

37 hedge funds were long Walgreens Boots Alliance, Inc. (NASDAQ:WBA) at the end of the third quarter. In comparison, 41 hedge funds were bullish on the company stock a quarter ago.

4. Consolidated Edison, Inc. (NYSE:ED)

Number of Hedge Fund Holders: 24

Dividend Yield: 3.63% (as of January 4)

No. of Years of Consecutive Dividend Increase: 47

Next up on our list of safe dividend stocks to buy in 2022 is Consolidated Edison, Inc. (NYSE:ED), a New York-based company that offers regulated electric, gas, and steam delivery services. The firm has grown its dividend payout for 16 consecutive years, offering a 3.63% yield that is high relative to peers. Consolidated Edison, Inc. (NYSE:ED) was reported in the portfolio of 24 hedge funds at the end of the third quarter, down from 30 hedge funds in the preceding quarter.

Consolidated Edison, Inc. (NYSE:ED) posted earnings per share of $1.41, which missed estimates by $0.07. However, quarterly revenue was $3.61 billion, outperforming estimates by $152.85 million.

On December 8, research firm Citigroup maintained its ‘Neutral’ rating on Consolidated Edison, Inc. (NYSE:ED) stock, setting the price target at $84. Having expanded its footprint in the renewable energy segment in recent years, the company is well-positioned to benefit from the decarbonization mega-trend.

3. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 57

Dividend Yield: 4.78% (as of January 4)

No. of Years of Consecutive Dividend Increase: 8

Verizon Communications Inc. (NYSE:VZ) is a telecommunication giant based in the United States, offering communications, technology, information and entertainment products and services. The company has invested heavily in 5G technology, and shareholders are expected to continue reaping the benefits as the high dividend yield provides good downside protection in the near term. Verizon Communications Inc. (NYSE:VZ) is also continuing to see net additions to its broadband and postpaid phone segments.

For the third quarter, Verizon Communications Inc. (NYSE:VZ) reported earnings per share of $1.41, exceeding analysts’ forecasts by $0.05. In December, the firm declared quarterly dividend of $0.64 per share, with shares trading at $53.52 as of January 4.

On October 21, Cowen analyst Colby Synesael raised the price target on Verizon Communications Inc. (NYSE:VZ) stock to $71 from $68, reiterating an ‘Outperform’ rating. The analyst holds that the stock is meaningfully undervalued at current levels.

As of the end of the third quarter, 57 hedge funds held positions in Verizon Communications Inc. (NYSE:VZ) worth $10.35 billion, down from 63 hedge funds in the second quarter of 2021.

2. Enbridge Inc. (NYSE:ENB)

Number of Hedge Fund Holders: 24

Dividend Yield: 6.93% (as of January 4)

No. of Years of Consecutive Dividend Increase: 8

Enbridge Inc. (NYSE:ENB) is an energy infrastructure company based in Canada, operating through its segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.  The company declared a quarterly dividend of CAD 0.860 per share, which is a 3% increase from prior dividend of CAD 0.835. Yield stands at an impressive 6.93%, which appears sustainable given the company’s incredibly stable cash flows and significant growth potential in the renewables segment.

Investors are loading up on Enbridge Inc. (NYSE:ENB), which is the largest midstream company in North America. 24 hedge funds held Enbridge Inc. (NYSE:ENB) stock in their portfolios at the end of the third quarter, up from 19 in the preceding quarter.

1. Enterprise Products Partners L.P. (NYSE:EPD)

Number of Hedge Fund Holders: 25

Dividend Yield: 7.86% (as of January 4)

No. of Years of Consecutive Dividend Increase: 22

Enterprise Products Partners L.P. (NYSE:EPD) deals in the production and sale of natural gas and petrochemicals. For the third quarter, Enterprise Products Partners L.P. (NYSE:EPD) posted an EPS of $0.54, beating estimates by $0.03. Quarterly revenue amounted to $10.83 billion, exceeding analysts’ forecasts by $2.33 billion.

Enterprise Products Partners L.P. (NYSE:EPD) has increased its payout for 23 consecutive years, and returned more than $40 billion in capital to shareholders.

As of the third quarter, 25 hedge funds were bullish on Enterprise Products Partners L.P. (NYSE:EPD) stock, in comparison to 28 stocks a quarter ago.

In October, Mizuho analyst Gabriel Moreen reiterated a ‘Buy’ rating on Enterprise Products Partners L.P. (NYSE:EPD) stock, raising the price target to $29 from $28. The analyst noted that the company was positioned to benefit in a $75 per barrel crude environment, similar to other midstream outperformers, and has the ability to translate earnings to cash return.

You can also take a look at Bill Gates’ Stock Portfolio: Top 15 Picks and 10 Best Dividend Stocks Under $20

Follow Insider Monkey on Twitter