15 Best Income Stocks To Invest In

Published May 11, 2022 at 1:05 pm EDT Updated September 7, 2026 at 11:31 am EDT

In this article, we discuss the 15 best income stocks to invest in.

Stocks can be incredibly volatile, and 2022 has provided yet another reminder of that fact. With stocks and investors alike struggling, one can’t help but wonder what the best course of action would be to mitigate risks to their portfolios. Enter income stocks. One of the many investment strategies that investors can utilize, income investing is a strategy that focuses on building a portfolio that is carefully structured to generate a passive stream of regular income. According to research conducted by Hartford Funds, 84% of the total return of the S&P 500 Index can be attributed to reinvested dividends and compounding since 1960, till 2021. Additionally, stocks of companies that offered dividends returned 10.68% on average from 1978 to 2021. Incidentally, unlike others, income stocks not only weathered the pandemic risks but even soared afterward. Based on a report by the Janus Henderson Global Dividend Index, global dividend payments jumped by 14.7%, reaching a record $1.47 trillion in 2021. Furthermore, such payments are expected to reach $1.52 trillion in 2022, heralding an underlying growth of 5.7%.

Given the changing market environment, investors would do well to pick their income stocks carefully. It would also be wise to select stocks that have been known to constantly grow their dividend yield over the years, despite a bad economy. Some of these stocks include Chevron Corporation (NYSE:CVX), International Business Machines Corporation (NYSE:IBM), and Altria Group, Inc. (NYSE:MO), among others listed below.

Our Methodology

For this list, we picked income stocks that look set to deliver shareholders stable returns for the year 2022. We focused on companies with solid business fundamentals and growth incentives. We also took into account company financials, most recent quarterly results, and the analyst and sentiment around these stocks.

The hedge fund sentiment around each stock was derived from Insider Monkey’s database which tracks 924 hedge funds as of the fourth quarter of 2021.

Best Income Stocks To Invest In

15. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 53

Dividend Yield (as of May 7): 3.33%

One of the successor companies of Standard Oil, Chevron Corporation is a California-based multinational energy corporation that is active in over 180 countries across the globe. Involved in the refining and marketing of crude oil products, the company also operates exploration and production facilities for oil and natural gas.

On February 15, Chevron Corporation declared a quarterly dividend of $1.42 per share. The dividend was distributed to shareholders of the company on March 10. Chevron Corporation delivers a dividend of 3.33% as of May 7.

On May 2, Credit Suisse analyst Manav Gupta raised the price target on Chevron Corporation to $190 from $180 following quarterly results. The analyst maintained an Outperform rating on the shares of the company.

Hedge fund sentiment around Chevron Corporation was extremely bullish at the end of the fourth quarter of 2021, as 53 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in the company, up from 51 in the preceding quarter worth $4.4 billion.

Much like Exxon Mobil Corporation (NYSE:XOM), International Business Machines Corporation, and Altria Group, Inc., Chevron Corporation is a decent income stock that investors should consider for their portfolios.

ClearBridge Investments, an investment management firm, mentioned Chevron Corporation in its Q1 2022 investor letter. Here is what the firm said:

“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”

14. Suncor Energy Inc. (NYSE:SU)

Number of Hedge Fund Holders: 33

Dividend Yield (as of May 7): 3.52%

Suncor Energy Inc. (NYSE:SU) is a Canadian integrated energy company based in Calgary, Alberta, that specializes in the production of synthetic crude from oil sands. The company delivers a dividend yield of 3.52% as of May 7.

On February 2, Suncor Energy Inc. declared a C$0.42 per share quarterly dividend, in line with the previous. The dividend was distributed to shareholders on March 25. Back in 2021, Suncor Energy Inc. reported a full-year revenue of approximately $31 billion, compared to $19.3 billion in the previous year, while the company’s net income for the year stood at $3.25 billion.

On April 18, Scotiabank analyst Jason Bouvier raised the price target on Suncor Energy Inc. to C$46 from C$45 and kept an Outperform rating on the shares of the company.

According to the fourth quarter database of Insider Monkey, 33 hedge funds held long positions in Suncor Energy Inc., compared to 32 funds in the earlier quarter. The total stakes owned in Q4 amounted to $1.30 billion, up from $1.08 billion in the previous quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the biggest shareholder in the company, with 9.3 million shares worth approximately $235 million.

Here is what ClearBridge Investments International Growth ADR Strategy has to say about Suncor Energy Inc. in its Q1 2022 investor letter:

“Also within the structural bucket, we added to our commodity exposure with the purchase of Suncor Energy. Suncor, a past holding, is a Canadian integrated oil company where we capitalized on attractive valuation due to a COVID-19-induced slowdown. We expect recovery in oil demand and strong pricing will result in faster than expected free cash flow growth and financial deleveraging.

The structural bucket has the shortest investment horizon across the spectrum of growth companies we target in the Strategy. We closely monitor the macro impacts and turnaround progress of these companies and will be disciplined sellers when the thesis for a holding plays out.”

13. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 82

Dividend Yield (as of May 7): 3.69%

AbbVie Inc. (NYSE:ABBV) is an American publicly-traded biopharmaceutical company that originated as a spin-off of Abbott Laboratories. A member of the S&P Dividend Aristocrats Index, the company is involved in the development, manufacture, and sales of pharmaceuticals worldwide.

On February 17, 2022, AbbVie Inc. declared a quarterly cash dividend of $1.41 per share of its common stock, which is payable on May 16 to investors of record on April 15.

Earlier on April 29, AbbVie Inc. released a report which detailed the company’s earnings for the fiscal first quarter of 2022. The company registered an EPS of $3.16, beating expert estimates by $0.02. Moreover, the company’s revenues grew 4.66% on a year-over-year basis, reaching $13.54 billion.

Morgan Stanley analyst Terence Flynn lowered the price target on AbbVie to $188 from $192 but maintained an Overweight rating on the shares on May 2. Although he made a few adjustments to his model, the analyst states that there is no change to his view on the company’s key growth drivers following the earnings report and he views recent weakness as a buying opportunity.

Out of the 924 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 82 were long AbbVie Inc. with stakes worth $374.43 million, an increase from 81 funds in the preceding quarter. Of these, Warren Buffett’s Berkshire Hathaway was the top stakeholder, owning over 3 million shares worth roughly $410.7 million.

Miller Howard Investments, an investment management firm, published its third-quarter 2021 investor letter in which it mentioned AbbVie Inc.. Here is what the firm had to say:

“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”

12. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 71

Dividend Yield (as of May 7): 3.84%

Exxon Mobil Corporation, stylized as ExxonMobil, is an American multinational oil and gas corporation headquartered in Irving, Texas. The company has consistently increased its dividend payouts for 39 years and delivers a dividend yield of 3.84% as of May 7.

On April 29, Exxon Mobil Corporation reported that its earnings per share for the fiscal first quarter of 2022 came to $2.07, falling short of EPS estimates by $0.16. On the other hand, the company’s quarterly revenues came in at $90.5 billion, an increase of 53.01% on a year-over-year basis, surpassing revenue estimates by $6.93 billion.

On May 2, Cowen analyst Jason Gabelman raised his price target on Exxon Mobil Corporation to $90 from $77 and kept a Market Perform rating on the shares following the company’s quarterly results.

Exxon Mobil Corporation is a popular stock pick among elite hedge funds, and by the end of Q4 2021, 71 hedge funds held long positions in the company worth roughly $5.38 billion, compared to 64 hedge funds in the previous quarter with stakes worth $4.64 billion. Rajiv Jain’s GQG Partners is the most prominent investor in Exxon Mobil Corporation with stakes worth approximately $2 billion in the company.

Saturna Capital mentioned Exxon Mobil Corporation in the firm’s fourth-quarter 2021 investor letter. Here is what the firm had to say:

“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”

11. Blackstone Inc. (NYSE:BX)

Number of Hedge Fund Holders: 62

Dividend Yield (as of May 7): 4.00%

Blackstone Inc. (NYSE:BX) is a financial services firm that invests in early-stage companies, real estate, corporate private equity, and other areas. The company delivers a dividend yield of 4.00% as of May 7. Additionally, Blackstone Inc. declared on April 29 a $1.32 per share quarterly dividend, which was payable on May 9.

Earlier this April, Blackstone Inc. reported that its earnings per share for the fiscal first quarter of 2022 were valued at $1.55, beating expert estimates by $0.50. Additionally, the company generated revenues of $3.50 billion, up 71.06% year over year, and outperformed market consensus by $988.17 million.

BMO Capital analyst James Fotheringham raised the price target on Blackstone Inc. to $142 from $124 but maintained a Market Perform rating on the shares on April 22. According to the analyst, the company’s Q1 investment performance was “notably strong” and its Real Estate, Infrastructure, and Credit businesses appear well-positioned for a higher inflation/rate environment.

According to Insider Monkey’s database, 62 hedge funds held long positions in Blackstone Inc. by the end of the fourth quarter of 2021. Of these, the majority stakes were held by Unio Capital, making it the most prominent investor in Blackstone Inc., with stakes worth approximately $613 million in the company.

Similar to Chevron Corporation, International Business Machines Corporation, and Altria Group, Inc., Blackstone Inc. is an income stock with strong business fundamentals.

Here is what Third Avenue Management Real Estate Value Fund has to say about Blackstone Inc. in its Q1 2022 investor letter:

“Along these lines, funds affiliated with the Blackstone Group launched a takeover offer for one of the Fund’s holdings for the second time in the previous three quarters. In this case, the bid related to Preferred Apartment Communities, Inc. (NYSE:APTS)- a US-based Real Estate Investment Trust (“REIT”) that predominantly owns a portfolio of modern and well-located multi-family properties in the Sunbelt region as well as grocery-anchored retail properties across the same geographic footprint. While the Fund’s investment was only established in 2021, Blackstone’s offer price represented a substantial premium to the Fund’s cost basis. The process undertaken by the Board to eliminate the disconnect between the company’s public and private market values also seemed robust.”

10. Realty Income Corporation (NYSE:O)

Number of Hedge Fund Holders: 30

Dividend Yield (as of April 7): 4.48%

Realty Income Corporation (NYSE:O) is a real estate investment trust that invests in free-standing, single-tenant commercial properties in the United States, Spain and the United Kingdom. One of the most prominent monthly dividend-paying stocks, it has grown its dividend payment to shareholders for 25 years in a row, with the company’s compound average annual dividend growth rate standing at approximately 4.4%. On April 12, Realty Income Corporation declared a $0.247 per share monthly dividend, which was in-line with the previous, and the firm’s dividend yield stood at 4.48% as of May 7.

The company posted strong financials for the first quarter of 2022. The EPS was reported to be at $1.01, beating estimates by $0.04. Additionally, the revenue came in at $807.34 million, an increase of 93.29% on a year-over-year basis, surpassing market predictions by $58.66 million. Wolfe Research analyst Andrew Rosivach upgraded Realty Income Corporation to Outperform from Peer Perform on March 15.

Based on Insider Monkey’s Q4 database, 30 hedge funds were bullish on Realty Income Corporation, up from 22 funds in the preceding quarter. The total stakes held in Q4 2021 amounted to approximately $399 million. Matthew Barrett’s Glendon Capital Management is the largest shareholder of the company, with a position worth roughly $133 million.

9. Gilead Sciences, Inc. (NASDAQ:GILD)

Number of Hedge Fund Holders: 54

Dividend Yield (as of May 7): 4.73%

Gilead Sciences, Inc. (NASDAQ:GILD) is an American biopharmaceutical company headquartered in Foster City, California, that focuses on researching and developing antiviral drugs used in the treatment of HIV/AIDS, hepatitis B, hepatitis C, and influenza. The company’s dividend yield on May 7 came in at 4.73%.

On April 27, Gilead Sciences, Inc. declared a $0.73 per share quarterly dividend, the same as the previous amount. The dividend will be distributed to shareholders of the company on June 29.

Piper Sandler analyst Do Kim raised the price target on Gilead Sciences, Inc. to $73 from $72 and maintained a Neutral rating on its shares on April 29. According to the analyst, the company reported Q1 revenue and earnings that beat consensus estimates, driven by higher Veklury sales and lower costs. He also expects pipeline updates to primarily drive the shares going forward.

Based on Insider Monkey’s Q4 data, Gilead Sciences, Inc. was found in the public stock portfolios of 54 hedge funds, with collectively held stakes worth $2.36 billion. Jim Simons’ Renaissance Technologies is one of the most notable position holders in the company, with more than 9 million shares valued at $659.4 million.

ClearBridge Investments, in its “Sustainability Leaders Strategy” fourth quarter 2021 investor letter, mentioned Gilead Sciences, Inc.. Here is what the fund said:

“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”

8. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 44

Dividend Yield (as of May 7): 4.79%

International Business Machines Corporation is an American multinational technology corporation that provides technology integrated solutions and services worldwide. One of the highest yielding technology dividend stocks from the S&P 500 list, the company has four core business segments – Software, Consulting, Infrastructure, and Financing.

International Business Machines Corporation recently declared a $1.65 per share quarterly dividend, a 0.6% increase from its prior dividend of $1.64. The dividend is payable on June 10, to shareholders of the company as of May 10. The company’s dividend yield as of May 7 stood at 4.79%.

On April 19, International Business Machines Corporation reported earnings for the first quarter of 2022, posting an EPS of $1.40, beating market consensus by $0.01. The Q1 revenue came in at $14.20 billion, outperforming analysts’ estimates by approximately $353 million.

Earlier this April, BofA analyst Wamsi Mohan raised the price target on International Business Machines Corporation to $165 from $162 and kept a Buy rating on the shares after the company reported a “solid” set of quarterly results and gave a “strong” outlook for 2022. The analyst believes that the company has made significant progress, with its portfolio being defensive and able to outperform in a difficult macro environment. Furthermore, he expects sustained revenue growth beyond 2022.

Among the hedge funds tracked by Insider Monkey, 44 funds reported owning stakes in International Business Machines Corporation at the end of December 2021, compared to 41 funds in the preceding quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held one of the leading positions in the company, with 3.2 million shares worth $440.5 million.

Here is what St. James Investment Company has to say about International Business Machines Corporation 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)

7. Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders: 47

Dividend Yield (as of May 7): 5.01%

Philip Morris International Inc. (NYSE:PM) is a Swiss-American multinational cigarette and tobacco manufacturing company, with products sold in over 180 countries. As of May 7, Philip Morris International Inc.’s dividend yield stood at 5.01%.

Philip Morris International Inc. posted above expected earnings for the first quarter of 2022 on April 21 with an EPS of $1.56, crossing market estimates by $0.07. The $7.75 billion revenue grew 2.12% on a year-over-year basis, exceeding analysts’ predictions by $315.53 million.

On April 24, BofA analyst Lisa Lewandowski raised her price target on Philip Morris International Inc. to $117 from $107 and maintained a Buy rating on the shares of the company. Despite challenges in 2022, the analyst expects Philip Morris International Inc. to pivot its focus to other high potential markets and work through the temporary cost pressures of shifting production away from Russia. Additionally, the analyst likes its attractive yield, strategy to shift smokers to higher margin, and less harmful smoking alternatives.

Among the hedge funds tracked by Insider Monkey in Q4 2021, 47 funds reported owning stakes in Philip Morris International Inc. worth $6.1 billion, compared to 48 funds in the prior quarter, holding stakes in the company valued at $5.9 billion. Terry Smith’s Fundsmith LLP is the biggest position holder in Philip Morris International Inc., with 20.4 million shares worth $1.94 billion.

Broyhill Asset Management mentioned Philip Morris International Inc. in its Q2 2021 investor letter. Here is what the firm had to say:

“Philip Morris (PM) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 23%. We shared our thoughts on these regulations during the quarter, which are available here.

‘PM Valuation. PM is up ~ 15% YTD and would have the most to gain under a nicotine cap. A cap would likely accelerate conversion to iQOS, which is 100% incremental for PM (PM also has zero exposure to combustible cigarettes in the U.S. and licenses its IQOS product for MO to distribute domestically). As such, the decline in PM was much more muted, with the stock hitting new 52 week highs a day after the Biden headline, driven by yesterday’s earnings release. It didn’t take long for investors to shift their attention back to fundamentals and the fundamentals here are best in class. In short, results beat estimates across the board (a recurring theme here), and management raised guidance for the full year (another recurring theme). IQOS continued to deliver impressive growth, recording continued market share gains on the heels of continued user acquisition growth, up 1.5M to 19.1M total users. Importantly, IQOS now represents nearly 30% of PM net revenues (management expects “smoke-free” products to represent more than half of their business by 2025, which should make the ESG folks happy), which is driving top-line growth and margin expansion. Hard to believe that they have created a product with higher margins than combustible cigarettes!! We expect PM operating margins to increase by 100bps – 200bps annually as IQOS continues to gain share. The stock trades at ~ 15x today or 2/3 of the market’s multiple for a business likely to generate $35B in cash flow – or 25% of the market cap – in just the next three years. Over the last decade, shares have traded at an average multiple of 18x and within a range of ~ 14x – 22x (+/-1 standard deviation). The stock yields 5.1% at the current price, and we expect management to resume share purchases in the back half of this year.’”

6. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 70

Dividend Yield (as of May 7): 5.68%

The world’s largest telecommunications company and the largest provider of mobile telephone services in the United States, AT&T Inc. is an American multinational telecommunications holding company based in Dallas, Texas, that offers wireless voice and data plans, cloud solutions, different kinds of telephony services, and cloud solutions.

Goldman Sachs analyst Brett Feldman reinstated coverage of AT&T Inc. with a Buy rating and a $23 price target, which represents a 23.5% potential total return on April 25. According to the analyst’s notes, the company’s communications-focused business model and adjusted capital allocation priorities following its recently completed asset sales and spin-off of WarnerMedia better positions it to invest in the core growth opportunities of fiber and 5G, and “sustain more durable trends” in revenues and adjusted earnings.

AT&T Inc. reported earnings for Q1 2022 on April 21, posting an EPS of $0.77, above market estimates by $0.08. The $38.11 billion revenue also outperformed Street consensus estimates by $8.68 billion. Shares of the company rose after these results surpassed expectations, with the latest performance being partly attributed to the aggressive expansion of its 5G services.

According to Insider Monkey’s database, AT&T Inc. was spotted on 70 investment portfolios by the end of the fourth quarter of 2021. The total stakes of these funds in the company amounted to approximately $4.9 billion, up from $3.2 billion in the previous quarter with 66 positions. As of December 31, Ken Griffin’s Citadel Investment Group is the largest stakeholder in AT&T Inc., with stakes valued at $1 billion.

In addition to Chevron Corporation, International Business Machines Corporation, and Altria Group, Inc., AT&T Inc. is one of the best income stocks to buy right now.

Here is what Weitz Investment Management Hickory Fund has to say about AT&T Inc. in its Q4 2021 investor letter:

“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”

5. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 51

Dividend Yield (as of May 7): 5.80%

Devon Energy Corporation (NYSE:DVN) announced its financial results for the first fiscal quarter of 2022 on May 5, posting an EPS of $1.88, crossing market estimates by $0.12. Revenue for the quarter increased 116.35% on a year-over-year basis to $3.81 billion, surpassing predictions by $242.30 million.

Devon Energy Corporation’s dividend yield on May 7 came in at 5.80%. On May 2, Devon Energy Corporation declared a $1.27 per share quarterly dividend, surpassing the previous. The dividend will be paid to shareholders on June 30.

Truist analyst Neal Dingmann raised his price target on Devon Energy Corporation to $100 from $91 and kept a Buy rating on the shares. Based on the analyst’s notes, the company will continue its multi-pronged shareholder return program of leading with dividends along with “meaningful buybacks” that are expected to rise. He also adds that the company’s current position of about 4,000 low-risk/high-return locations along with about 2,500 incremental operated locations could lead to material upside.

A top dividend stock among investors and one of the best income stocks to invest in, 51 hedge funds were long Devon Energy Corporation in the fourth quarter of 2021, up from 48 funds in the preceding quarter. The total stakes held in Q4 amounted to $1.74 billion, compared to $1.40 billion in the last quarter. Rajiv Jain’s GQG Partners is the company’s biggest shareholder, with a position worth roughly $639 million.

Here is what GoodHaven Capital Management has to say about Devon Energy Corporation in their Q4 2020 investor letter:

“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”

4. Kinder Morgan, Inc. (NYSE:KMI)

Number of Hedge Fund Holders: 39

Dividend Yield (as of May 7): 5.97%

Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy infrastructure companies in North America. Founded in 1936 and headquartered in Houston, Texas, the company specializes in owning and controlling oil and gas pipelines and terminals. The company’s 85,000 miles of pipelines serve major consuming domestic markets and transport approximately 40% of the natural gas consumed in the United States.

Kinder Morgan, Inc. declared a $0.2775 per share quarterly dividend on April 20, a 2.8% increase from its prior dividend of $0.27. The dividend is payable on May 16, to shareholders of the company as of May 2. The company’s dividend yield on May 7 came in at 5.97%.

On April 20, Kinder Morgan, Inc. announced its financial results for the first fiscal quarter of 2022, posting an EPS of $0.32, beating Street estimates by $0.04. The $4.29 billion revenue surpassed market consensus forecasts by $546.32 million.

Earlier this April, Wells Fargo analyst Michael Blum upgraded Kinder Morgan, Inc. to Equal Weight from Underweight with a price target of $21, up from $19, to reflect higher assumed multiples for refined products assets in his sum-of-the-parts valuation. With inflation rising, the analyst believes Kinder Morgan, Inc. could benefit from a number of tailwinds, including higher products pipeline growth, higher CO2 segment earnings, strong demand for natural gas, and potential LNG liquefaction projects.

According to the fourth quarter database of Insider Monkey, 39 hedge funds held long positions in Kinder Morgan, Inc., with collective stakes worth about $999 million. Bob Peck and Andy Raab’s FPR Partners is the leading shareholder of the company, with 17.8 million shares worth $282.7 million.

3. ONEOK, Inc. (NYSE:OKE)

Number of Hedge Fund Holders: 25

Dividend Yield (as of May 7): 6.06%

ONEOK, Inc. (NYSE:OKE) is an American diversified corporation focused primarily on the natural gas industry. Based in Oklahoma, the company is engaged in processing, storing, and transporting natural gas in the United States. The gas company delivers a dividend yield of 6.06% as of May 7. ONEOK, Inc. on April 21 declared a $0.935 per share quarterly dividend, in line with previous. The dividend is payable on May 16.

Morgan Stanley analyst Robert Kad raised his price target on ONEOK, Inc. to $81 from $70 and kept an Equal Weight rating on the shares of the company. He remains bullish on the outlook for the midstream sector over the balance of 2022 and generally expects strong Q1 prints and constructive management outlooks given the favorable commodity backdrop.

According to Insider Monkey’s Q4 database, 25 hedge funds were long ONEOK, Inc., up from 18 funds in the prior quarter. The total stakes owned in the fourth quarter of 2021 amounted to $94.5 million. Phill Gross and Robert Atchinson’s Adage Capital Management is the largest shareholder of the company, with 475,200 shares worth roughly $28 million.

Miller Howard Investments, in its Q3 2021 investor letter, mentioned ONEOK, Inc. and discussed its stance on the firm. Here is what the fund said:

“In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK Inc. (OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”

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

Number of Hedge Fund Holders: 39

Dividend Yield (as of May 7): 6.51%

A Virginia-based corporation and a worldwide distributor, Altria Group, Inc. is one of the world’s largest producers and marketers of tobacco, cigarettes, and related products. One of the highest yielding S&P 500 dividend stocks, the tobacco company is a dividend king with a history of 52 years of consecutive dividend growth.

Altria Group, Inc. declared a $0.90 per share quarterly dividend on February 25, in line with the previous. The dividend was payable on April 29, for shareholders of record on March 25. As of May 7, the company has a dividend yield of 6.51%.

On April 28, Altria Group, Inc. reported earnings for the first quarter of 2022. The company announced an EPS of $1.12, beating analysts’ predictions by $0.03. Furthermore, the revenue for the quarter came in at $4.82 billion. Following the company’s Q1 results, Deutsche Bank analyst Steve Powers raised the price target on Altria Group, Inc. to $60 from $54 and kept a Buy rating on the shares on April 29.

A total of 39 hedge funds were long Altria Group, Inc. in Q4 2021, compared to 45 funds in the previous quarter. Rajiv Jain’s GQG Partners owned the leading stake in the company, with more than 9 million shares worth approximately $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.”

1. Lumen Technologies, Inc. (NYSE:LUMN)

Number of Hedge Fund Holders: 39

Dividend Yield (as of May 7): 8.97%

Lumen Technologies, Inc. (NYSE:LUMN) is an American technology and communications company, offering integrated solutions and services under the Lumen, Quantum Fiber, and CenturyLink brands. As of May 7, the company has a dividend yield of 8.97%.

On February 24, Lumen Technologies, Inc. declared a quarterly dividend of $0.25 per share, which was distributed to shareholders of the company on March 18.

Lumen Technologies, Inc. posted its Q1 results on May 4, reporting earnings per share of $0.59, which beat market estimates by $0.14. The company also reported a revenue of $4.68 billion for the quarter.

The investor sentiment for the stock has largely been positive, making Lumen Technologies a notable income stock. According to Insider Monkey’s fourth quarter database, 39 funds reported owning stakes in Lumen Technologies, Inc., up from 25 funds in the previous quarter. Fred Knoll’s Knoll Capital Management reported owning 100,000 shares of the company in Q4, worth $1.25 million.

Here is what Longleaf Partners Global Fund has to say about Lumen Technologies, Inc. in its Q4 2021 investor letter:

“In a year that saw various times when the stock market acted like the pre-COVID, during-COVID, and post-COVID “environments” (not necessarily in that order), the good news was that our two largest holdings – which we feel can thrive in all three of these environments – Lumen and EXOR, were among our top contributors for the year. We believe that both remain underappreciated by the market and offer significant upside from today’s discounted prices.

Lumen (40%, 3.06%; 3%, 0.31%), the global fiber company, was the top contributor for the year. CEO Jeff Storey took two actions this year to substantially increase the business’s value and address the stock’s enormous discount (it trades below 35% of our appraisal value). First, during the third quarter, Lumen sold its Latin American fiber for a good price [9x earnings before interest, taxes, and depreciation (EBITDA)] and the weaker half of its US consumer business for an encouraging 5.5x EBITDA. Both multiples came in above our appraisals and demonstrate how cheap the consolidated Lumen RemainCo is today at less than 6x P/FCF and EV/EBITDA. The majority of Lumen’s remaining EBITDA comes from its US Enterprise and Small and Medium Business (SMB) segments, which grow faster than Lumen’s disposed LatAm fiber and are worth higher multiples. The weakest segment of the new Lumen, the western half of Consumer, is superior to the assets the company just sold for 5.5x EBITDA. Second, Storey quickly repurchased 7% of Lumen’s shares, adding meaningfully to value per share and free cash flow per share. When the dispositions close, proceeds will reduce debt meaningfully, putting net debt right at the company’s leverage ratio target even though that target was based on the prior, inferior business mix. We are pleased that our engagement since filing an amended 13D helped the company begin to deliver positive corporate actions. The market has fixated on the potential for another dividend cut, but Lumen’s FCF is more than sufficient to cover the $1/share payout while investing aggressively into high-return, edge-out capex to grow revenues.”

You can also take a look at 15 Best Technology Stocks To Buy Now and 12 Safe Stocks To Buy For Beginner Investors.

Follow Insider Monkey on Twitter