In this article, we discuss 11 best American dividend stocks to buy now.
Due to the rising inflation and continuous interest rate hikes this year, dividend stocks are in great demand among investors. The companies that pay regular dividends provide an additional stream of income and add value to total shareholders’ returns. The returns of dividend stocks this year show their outperformance over other asset classes. According to a report by Wisdom Tree, high dividend stocks returned 2.61% as of August 2022, compared with a 16.14% drop in the S&P 500. The report further mentioned that dividends have grown by an average of 5.7% since 1957, over 2% above the rate of inflation.
In the second quarter of 2022, dividend payments in the US amounted to $144.4 billion, reaching their all-time quarterly high. Moreover, global dividends also rose by 19.1% on an underlying basis and reached $544.8 billion in Q2. Analysts believe that the trend will continue for the rest of the year as well. Richard Saldanha, lead manager on the Aviva Investors Global Equity Income strategy, talked about dividend stocks in one of his recent interviews with the firm. He said that dividend companies with strong cash flows and solid balance sheets are the best investment options in these times. He further asserted that even during the pandemic, many companies in the US maintained their dividends and some are even growing their payouts at double-digit rates, which will likely continue in the coming quarters as well.
Historically, dividend stocks have delivered solid returns to shareholders. According to a report by Forbes, from September 1921 to September 2021, the S&P 500 delivered an annual average return of 6.7%. However, with reinvested dividends, the percentage rose to 11%. Some of the best dividend stocks that are popular among investors include AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ). In this article, we will further discuss American dividend stocks to buy now.
New York Stock Exchange
Image: flickr.com
Our Methodology:
For this article, we selected companies that are based in America and are traded on American exchanges. We considered these companies’ dividend histories, balance sheets, and financial strength. The stocks are ranked according to their dividend yields, as recorded on October 4.
Best American Dividend Stocks to Buy Now
11. West Pharmaceutical Services, Inc. (NYSE:WST)
Dividend Yield as of October 4: 0.28%
West Pharmaceutical Services, Inc. (NYSE:WST) is an American pharmaceutical company that specializes in the manufacturing of injectable pharmaceutical packaging and delivery systems. In the first six months of the year, the company reported an operating cash flow of over $324.3 million, up 39% from the same period last year. Its free cash flow for the period came in at $192.4 million, an increase of 58.4% from the prior-year period. In Q2 2022, the company reported revenue of $771.3 million, showing a 6.6% year-over-year growth.
West Pharmaceutical Services, Inc. (NYSE:WST) currently pays a quarterly dividend of $0.18 per share, with a dividend yield of 0.28%, as of October 4. The company maintains a 29-year streak of consistent dividend growth, falling into the category of Dividend Aristocrats. This makes the company one of the best dividend stocks on our list.
At the end of Q2 2022, 34 hedge funds tracked by Insider Monkey owned stakes in West Pharmaceutical Services, Inc. (NYSE:WST), compared with 35 a quarter earlier. These stakes hold a collective value of over $802.8 million. Durable Capital Partners was the company’s leading stakeholder in Q2.
In addition to AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), West Pharmaceutical Services, Inc. (NYSE:WST) can be a good addition to dividend portfolios due to its dividend growth streak.
Baron Funds mentioned West Pharmaceutical Services, Inc. (NYSE:WST) in its Q2 2022 investor letter. Here is what the firm has to say:
“West Pharmaceutical Services, Inc. (NYSE:WST), a leader in integrated containment and delivery systems for injectable drugs, reported 3.5% growth from price increases during its first quarter, or almost three times greater than the 1.2% growth realized in the prior year.”
10. Albemarle Corporation (NYSE:ALB)
Dividend Yield as of October 4: 0.58%
Albemarle Corporation (NYSE:ALB) is a North Carolina-based chemical manufacturing company and has a leading position as a lithium and bromine refining catalyst. The company has been raising its dividends consistently for the past 28 years and has a five-year dividend CAGR of 4.48%. It currently pays a quarterly dividend of $0.395 per share, with a dividend yield of 0.58%, as of October 4.
In the second quarter of 2022, Albemarle Corporation (NYSE:ALB) reported revenue of nearly $1.5 billion, showing a 91.2% growth from the same period last year. At the end of June, the company reported $60.3 million in cash from operations and had approximately $930.6 million available in cash and cash equivalents. For FY22, it expects to generate operating cash flow between $1.4 billion to $1.7 billion.
In October, BofA raised its price target on Albemarle Corporation (NYSE:ALB) to $332 with a Neutral rating on the shares, as the firm used discounted cash flow analysis for its lithium coverage.
As of the close of Q2 2022, 39 hedge funds tracked by Insider Monkey owned stakes in Albemarle Corporation (NYSE:ALB), compared with 44 in the previous quarter. These stakes hold a combined value of over $600.6 million.
9. Roper Technologies, Inc. (NYSE:ROP)
Dividend Yield as of October 4: 0.66%
Roper Technologies, Inc. (NYSE:ROP) is an American diversified industrial company that manufactures engineered products. The company provides a wide range of products and services to its customers in over 100 countries. In August, Bernstein assumed its coverage on the stock with a Market Perform rating and a $490 price target. The firm appreciated the company’s industrial businesses.
At the end of June, Roper Technologies, Inc. (NYSE:ROP) reported over $2.8 billion in cash and cash equivalents, up from $351 million six months ago. The company’s total assets amounted to nearly $5 billion, compared with $2.4 billion at the end of December 2021. Its revenue for Q2 2022 showed a 10.1% year-over-year growth at $1.31 billion.
On September 16, Roper Technologies, Inc. (NYSE:ROP) declared a quarterly dividend of $0.62 per share, in line with its previous dividend. The company has been raising its dividends consistently for the past 31 years, coming through as one of the best dividend stocks in the US. In the past five years, it has raised its payouts at a CAGR of 12.41%. As of October 4, the stock’s dividend yield came in at 0.66%.
The number of hedge funds tracked by Insider Monkey owning stakes in Roper Technologies, Inc. (NYSE:ROP) grew to 48 in Q2 2022, from 38 a quarter earlier. The total value of these stakes is over $1.7 billion. With over 1.6 million shares, Akre Capital Management was the company’s leading stakeholder in Q2.
Weitz Investment Management mentioned Roper Technologies, Inc. (NYSE:ROP) in its Q2 2022 investor letter. Here is what the firm has to say:
“Consistent with that approach, portfolio activity among our long holdings tilted toward purchases. We added to almost half our holdings by varying degrees, and we were pleased to initiate new positions in Roper Technologies (NYSE:ROP) at attractive prices. Originally an industrial equipment manufacturer, Roper has successfully evolved into a provider of software and technology services. (Investors can find an in-depth discussion of our Roper Technologies investment thesis in colleague Barton Hooper’s November 2021 “Analyst Corner” feature.) The business generate significant free cash flow, possess strong competitive positions, and have excellent management teams with demonstrated acquisition records.”
8. Waste Connections, Inc. (NYSE:WCN)
Dividend Yield as of October 4: 0.67%
Waste Connections, Inc. (NYSE:WCN) is a Texas-based waste management company that provides recycling, disposal, transfer services, primarily of solid waste. The company was a part of 34 hedge fund portfolios in Q2 2022, compared with 35 in the previous quarter, as per Insider Monkey’s data. These stakes hold a collective value of over $1.07 billion.
In the second quarter of 2022, Waste Connections, Inc. (NYSE:WCN) reported strong results which surpassed Street estimates. The company posted an EPS of $1.00 and revenue of $1.82 billion, which beat analysts’ consensus by $0.05 and $20 million, respectively. Its operating cash flow stood at $532.7 million, up from $440.8 million in the previous quarter. The company’s free cash flow also jumped to $313.6 million, from $288.5 million in the preceding quarter.
Waste Connections, Inc. (NYSE:WCN) currently pays $0.23 per share in quarterly dividend. The company holds a 12-year track record of consistent dividend growth. As of October 4, the company’s shares has a yield of 0.67%.
In August, Deutsche Bank raised its price target on Waste Connections, Inc. (NYSE:WCN) to $154 with a Buy rating on the shares, as the company showed robust pricing and also raised its full year outlook.
7. Griffon Corporation (NYSE:GFF)
Dividend Yield as of October 4: 1.18%
Griffon Corporation (NYSE:GFF) is a New York-based multinational management and holding company that conducts business through its wholly-owned subsidiaries. In fiscal Q3 2022, the company reported an operating cash flow of $124.6 million, up from $71.4 million during the same period last year. Its free cash flow for the quarter amounted to $113 million, compared with $68.3 million in the prior-year quarter. The company’s revenue of $768 million showed a 31.5% year-over-year growth.
Griffon Corporation (NYSE:GFF) is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past nine years. It currently pays a quarterly dividend of $0.09 per share and has a dividend yield of 1.18%, as of October 4.
In September, Griffon Corporation (NYSE:GFF) was added to ‘Analyst Current Favorites’ list at Raymond James. The firm holds a Strong Buy rating on the stock.
GAMCO Investors owned over 3.4 million shares in Griffon Corporation (NYSE:GFF), becoming the company’s largest stakeholder in Q2 2022. Overall, 21 hedge funds in Insider Monkey’s database owned stakes in the company in Q2, up from 12 in the previous quarter. These stakes have a total value of over $218.7 million.
6. Church & Dwight Co., Inc. (NYSE:CHD)
Dividend Yield as of October 4: 1.44%
Church & Dwight Co., Inc. (NYSE:CHD) is a New Jersey-based manufacturing company that mainly specializes in household products. In September, Wells Fargo maintained an Overweight rating on the stock with a $90 price target as the company announced the acquisition of Hero Cosmetics. The firm also mentioned the growing demand for the company’s products.
Church & Dwight Co., Inc. (NYSE:CHD) has paid uninterrupted dividends to shareholders for 485 quarters. The company has raised its payouts consecutively for 26 years. Since 1976, the stock has raised its dividends at an annual average of 12.4%. Church & Dwight Co., Inc. (NYSE:CHD) currently offers a quarterly dividend of $0.2625 per share, with a yield of 1.44, as of October 4.
At the end of Q2 2022, 32 hedge funds tracked by Insider Monkey owned stakes in Church & Dwight Co., Inc. (NYSE:CHD), down from 33 in the previous quarter. These stakes have a collective value of over $1.33 billion. Terry Smith, Ray Dalio, and Jim Simons were some of the company’s major stakeholders in Q2.
In addition to popular companies like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), Church & Dwight Co., Inc. (NYSE:CHD) is also one of the best dividend stocks to buy now.
5. Automatic Data Processing, Inc. (NASDAQ:ADP)
Dividend Yield as of October 4: 1.79%
Automatic Data Processing, Inc. (NASDAQ:ADP) is an American company that specializes in human resources management software and services. The company reported a strong cash position in the second quarter of 2022. Its operating cash flow stood at $913 million and it generated $768.6 million in free cash flow. The company’s revenue for the quarter came in at $4.13 billion, which showed an 11.6% growth from the same period last year.
On August 3, Automatic Data Processing, Inc. (NASDAQ:ADP) declared a quarterly dividend of $1.04 per share, consistent with its previous dividend. The company holds a strong dividend growth history, having raised its dividends consistently for the past 47 years. As of October 4, the stock’s dividend yield was 1.79%.
In August, Mizuho raised its price target on Automatic Data Processing, Inc. (NASDAQ:ADP) to $257 with a Buy rating on the shares, calling the company’s result ‘solid across the board’. The firm also appreciated the company’s financial payments segment.
At the end of Q2 2022, 39 hedge funds tracked by Insider Monkey owned stakes in Automatic Data Processing, Inc. (NASDAQ:ADP), compared with 47 in the previous quarter. These stakes hold a collective value of nearly $2.5 billion. Fundsmith LLP was the company’s major stakeholder in Q2.
4. Matson, Inc. (NYSE:MATX)
Dividend Yield as of October 4: 1.90%
Matson, Inc. (NYSE:MATX) is a Hawaii-based shipping and navigation services company that provides related services across the Pacific. In July, Stifel maintained a Buy rating on the stock as the company could benefit from the Ocean Shipping Reform Act. The act was expected to control the supply chain blockages.
At the end of June 2022, Matson, Inc. (NYSE:MATX) reported strong cash generation, with its operating cash flow standing at $691 million, up from $238.8 million during the same period last year. The company had $326 million in cash and cash equivalents, compared with $282.4 million in the prior-year period. It paid $25 million in dividends to shareholders during this period.
Matson, Inc. (NYSE:MATX) currently pays a quarterly dividend of $0.31 per share and has a dividend yield of 1.90%, as of October 4. The company last raised its dividend in June this year, taking its dividend growth streak to ten years.
At the end of Q2 2022, 25 hedge funds tracked by Insider Monkey owned stakes in Matson, Inc. (NYSE:MATX), up from 22 in the previous quarter. The collective value of these stakes is roughly $98 million.
Meridian Funds mentioned Matson, Inc. (NYSE:MATX) in its Q2 2022 investor letter. Here is what the firm has to say:
“Matson, Inc. (NYSE:MATX) is a US-based ocean and logistics company with a leading position in Pacific shipping that provides a vital lifeline to Hawaii, Alaska, and Guam as well as premium and expedited service from China to the US. Given its unique position and terminal assets, Matson has an unparalleled speed advantage over other ocean transportation companies. This speed advantage has been highly valuable to customers given supply chain disruptions which has helped improve inventory velocity. Although the company recently reported strong quarterly earnings growth, its stock declined on signs of slower shipping demand due to rising inventories within the consumer channel and improving port congestion. Given these dynamics, overall container rates have begun to recede from the robust levels experienced in 2021 but still remain at levels that are nearly 4x that of pre-pandemic levels. Although we expect container rates to continue to normalize, we believe the company’s unique speed advantage and increased service capacity between Asia and the U.S. could help offset some of these headwinds. Matson continues to generate strong free cash flow and has proven to be a strong allocator of capital, including increasing dividend payouts for shareholders and buying back stock. During the period, we trimmed our position in the company.”
3. Atmos Energy Corporation (NYSE:ATO)
Dividend Yield as of October 4: 2.59%
Atmos Energy Corporation (NYSE:ATO) is a Texas-based natural gas distribution company that serves over three million customers in the state. The company is one of the best dividend stocks on our list as it holds a 37-year track record of consistent dividend growth. It currently pays a quarterly dividend of $0.68 per share, with a dividend yield of 2.59%, as recorded on October 4.
In fiscal Q3 2022, Atmos Energy Corporation (NYSE:ATO) reported a total investment income of $816.4 million, up 34.8% from the same period last year. The company’s operating cash flow for the quarter stood at $288.8 million, compared with $74.2 million in the prior-year quarter. In August, it paid its 155th consecutive quarterly dividend to shareholders.
In July, Barclays maintained an Equal Weight rating on Atmos Energy Corporation (NYSE:ATO) with a $115 price target as the firm updated its price targets for the North American power and utility sectors.
The number of hedge funds tracked by Insider Monkey owning stakes in Atmos Energy Corporation (NYSE:ATO) grew to 21 in Q2 2022, from 16 in the previous quarter. These stakes hold a combined value of $852.5 million, compared with $636 million worth of stakes owned by hedge funds in the preceding quarter.
Aristotle Capital Management mentioned Atmos Energy Corporation (NYSE:ATO) in its Q1 2022 investor letter. Here is what the firm has to say:
“Headquartered in Dallas, Atmos Energy is the largest fully regulated natural gas-only utility in the U.S. It serves over three million distribution customers across eight states, primarily in the South. Approximately 70% of its revenue comes from Texas, where it owns one of the largest natural gas pipeline systems in the state. (Click here to view the full text)
2. Simmons First National Corporation (NASDAQ:SFNC)
Dividend Yield as of October 4: 3.42%
Simmons First National Corporation (NASDAQ:SFNC) is an American financial holding company that provides banking and other financial products and services to its consumers. In Q2 2022, the company posted an operating cash flow of over $117.3 million, compared with $60.5 million in the previous quarter. Its free cash also jumped to $107.4 million, from $53.3 million in the preceding quarter. The company’s revenue showed a 19.6% year-over-year growth at $225.4 million.
Simmons First National Corporation (NASDAQ:SFNC) has been making consecutive dividend payments for the past 113 years, which makes it one of the best dividend stocks on our list. In addition to this, the company has been raising its payouts for the past 10 years. It pays a quarterly dividend of $0.19 per share, with a dividend yield of 3.42%, as of October 4.
At the end of Q2 2022, 17 hedge funds in Insider Monkey’s database owned stakes in Simmons First National Corporation (NASDAQ:SFNC), up from 11 in the previous quarter. The total value of these stakes is over $42.4 million. Among these hedge funds, Citadel Investment Group owned the largest position in the company.
1. Public Service Enterprise Group Incorporated (NYSE:PEG)
Dividend Yield as of October 4: 3.71%
Public Service Enterprise Group Incorporated (NYSE:PEG) is a New Jersey-based electric services company that provides sustainable energy services to its consumers. The company has raised its dividends 18 times in the past 19 years. Moreover, 2022 marked the company’s 115th consecutive year of consistent dividend payment. It currently pays a quarterly dividend of $0.54 per share, with a dividend yield of 3.71%, as of October 4.
In August, Morgan Stanley raised its price target on Public Service Enterprise Group Incorporated (NYSE:PEG) to $81 with an Overweight rating on the shares, as the firm presented a positive outlook on clean energy stocks.
As of the close of Q2 2022, 31 hedge funds tracked by Insider Monkey owned stakes in Public Service Enterprise Group Incorporated (NYSE:PEG), the same as in the previous quarter. These stakes hold a collective value of over $825 million. Ken Griffin and Israel Englander were some of the company’s major stakeholders in Q2.
You can also take a look at 10 Best Diversified Dividend Stocks to Buy Now and 11 Best Dividend Paying Stocks Under $50
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Disclosure. None. 11 Best American Dividend Stocks to Buy Now is originally published on Insider Monkey.
