In this article, we discuss the 5 best dividend champions to buy for 2022. If you want our detailed analysis of these stocks, go directly to 10 Best Dividend Champions to Buy for 2022.
5. Chevron Corporation (NYSE:CVX)
Dividend Yield as of January 20: 4.17%
Number of Years of Dividend Increases: 34
Number of Hedge Fund Holders: 51
Chevron Corporation (NYSE:CVX) is an American multinational energy corporation, serving customers in more than 180 countries. Chevron Corporation (NYSE:CVX) deals in oil, natural gas, hydrocarbon exploration, refining, marketing and transport, chemicals manufacturing, and power generation.
On October 27, Chevron Corporation (NYSE:CVX) declared a $1.34 per share quarterly dividend, in line with previous. The dividend was paid on December 10, to shareholders of record on November 18. Chevron Corporation (NYSE:CVX) made it to our list of the top dividend champions to buy for 2022, since the company has been elevating its dividend payments consistently for 34 years.
Truist analyst Neal Dingmann raised the price target on Chevron Corporation (NYSE:CVX) to $167 from $150 and kept a Buy rating on the shares on January 14. The analyst notes that more oil-weighted exploration and production names warrant higher price targets as he increases his 2022 oil price estimates by about 10% and his 2023 estimates by about 8%.
Berkshire Hathaway is the largest Chevron Corporation (NYSE:CVX) stakeholder as of the third quarter of 2021, with 28.70 million shares worth $2.91 million. Overall, 51 hedge funds were long Chevron Corporation (NYSE:CVX) in Q3, with stakes amounting to $4.4 billion.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation (NYSE:CVX) 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.”
4. National Retail Properties, Inc. (NYSE:NNN)
Dividend Yield as of January 20: 4.87%
Number of Years of Dividend Increases: 32
Number of Hedge Fund Holders: 21
National Retail Properties, Inc. (NYSE:NNN) is a Florida-based real estate investment trust that rents out long-term leases for high quality establishments. National Retail Properties, Inc. (NYSE:NNN) has had 32 years of consecutive dividend increases.
Offering a yield of 4.87%, National Retail Properties, Inc. (NYSE:NNN) on January 14 declared a $0.53 per share quarterly dividend, in line with previous. The dividend is payable on February 15, to shareholders of record on January 31.
BofA analyst Joshua Dennerlein on January 20 downgraded National Retail Properties, Inc. (NYSE:NNN) to Underperform from Buy and slashed his price target to $47 from $52 as part of a broader sector note on triple-net REITs. The analyst is updating his models to reflect his view that net lease investors should focus on a mixture of dividend yield and earnings growth.
In the third quarter of 2021, 21 hedge funds were long National Retail Properties, Inc. (NYSE:NNN), with stakes totaling $120 million. Millennium Management is the largest National Retail Properties, Inc. (NYSE:NNN) stakeholder, holding 864,311 shares worth $37.3 million.
3. Universal Health Realty Income Trust (NYSE:UHT)
Dividend Yield as of January 20: 4.98%
Number of Years of Dividend Increases: 36
Number of Hedge Fund Holders: 9
Universal Health Realty Income Trust (NYSE:UHT) is a real estate investment trust focusing its investments in healthcare facilities including acute care hospitals, rehabilitation hospitals, sub-acute care facilities, medical/office buildings, free-standing emergency departments, and childcare centers. Universal Health Realty Income Trust (NYSE:UHT) operates in 20 American states.
On December 1, Universal Health Realty Income Trust (NYSE:UHT) declared a $0.705 per share quarterly dividend, which is a 0.7% increase from the prior dividend of $0.700. The dividend was paid on December 30, to shareholders of record on December 15.
Among the hedge funds tracked by Insider Monkey in the third quarter of 2021, 9 funds were bullish on Universal Health Realty Income Trust (NYSE:UHT), with stakes totaling $27.9 million. Renaissance Technologies is the biggest stakeholder of Universal Health Realty Income Trust (NYSE:UHT), with 307,510 shares worth roughly $17 million.
2. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of January 20: 5.01%
Number of Years of Dividend Increases: 26
Number of Hedge Fund Holders: 41
International Business Machines Corporation (NYSE:IBM) provides integrated technology solutions worldwide, including cloud services, software for vertical and domain-specific solutions, customer information control systems, analytics, and integration software solutions, among other related products and services.
On October 26, International Business Machines Corporation (NYSE:IBM) declared a $1.64 per share quarterly dividend, in line with previous. This dividend was paid on December 10, to shareholders of record on November 10.
International Business Machines Corporation (NYSE:IBM) announced on January 21 that it has signed a definitive agreement under which Francisco Partners will acquire healthcare data and analytics assets from International Business Machines Corporation (NYSE:IBM) that are currently part of the Watson Health business.
Goldman Sachs analyst Brian Essex on January 9 initiated coverage of International Business Machines Corporation (NYSE:IBM) with a Neutral rating and a $140 price target. The analyst believes that International Business Machines Corporation (NYSE:IBM) is well positioned for better growth, profitability, and sustainable shareholder return with elevated enterprise transformation demand anticipated ahead. However, it could take the company some time to drive better shareholder value.
In the third quarter of 2021, 41 hedge funds were long International Business Machines Corporation (NYSE:IBM), with stakes equaling $1.40 billion. Arrowstreet Capital is one of the leading stakeholders of the company, holding 2.86 million shares worth $398.1 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)
1. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of January 20: 6.52%
Number of Years of Dividend Increases: 27
Number of Hedge Fund Holders: 24
Enbridge Inc. (NYSE:ENB) is an energy infrastructure company that operates through five segments, including liquids pipelines, gas transmission and midstream, gas distribution and storage, renewable power generation, and energy services. Enbridge Inc. (NYSE:ENB) is one of the most notable dividend champions to buy for 2022.
Enbridge Inc. (NYSE:ENB) declared on December 7 a C$0.860 per share quarterly dividend, which is a 3% increase from the prior dividend of C$0.835. The dividend is payable on March 1, to shareholders of record on February 15. Enbridge Inc. (NYSE:ENB)’s rich dividend history suggests 27 consecutive years of dividend increases.
On January 11, CIBC analyst Robert Catellier raised the price target on Enbridge Inc. (NYSE:ENB) to C$57 from C$55 and kept an Outperform rating on the shares.
Enbridge Inc. (NYSE:ENB) announced on December 31 that it plans to purchase approximately 31 million common shares worth C$1.5 billion. Enbridge Inc. (NYSE:ENB) will purchase the shares over the course of one year through the New York Stock Exchange, Toronto Stock Exchange, and other exchanges on January 5.
A total of 24 hedge funds were bullish on Enbridge Inc. (NYSE:ENB) in the third quarter of 2021, up from 19 funds in the preceding quarter. Galibier Capital Management is one of the leading Enbridge Inc. (NYSE:ENB) shareholders, with 785,587 shares worth $31.2 million.
Here is what ClearBridge Investments Dividend Strategy has to say about Enbridge Inc. (NYSE:ENB) in its Q3 2021 investor letter:
“We are meaningfully overweight energy, particularly within North American energy infrastructure. Enbridge and Williams, our two infrastructure holdings, possess crown jewel infrastructure assets. They each deliver meaningful proportions of the overall energy produced and consumed in North America. Their revenues are backed by long-term contracts with high-quality counterparties and have little direct commodity price exposure. Their growth has been driven by the increasing production of North American energy. The advent of unconventional oil and gas production (oil sand and shale) has made North America a low-cost competitor on a global basis. We expect strong North American production to be an enduring feature of global energy supply for decades to come.”
You can also take a look at 10 High Yield Monthly Dividend Stocks and 10 Best Dividend Aristocrats to Buy for 2022.
