In this article, we discuss 5 dividend stocks of all time.
Dividend investing is all the rage with investors these days as they seek profitable options due to fears of a possible recession. According to CNBC’s CFO survey, nearly 68% of chief financial officers expect a recession during the first half of 2023 and are looking for a consistent source of income to weather the market situation. Therefore, investors poured over $3 billion into dividend-focused ETFs in June, taking the total to $43 billion in 2022 so far.
Andrew McOrmond, managing director at WallachBeth Capital, mentioned in one of his interviews that value and dividend stocks are attractive during unstable market situation. He further said that yields from dividends provide a consistent flow of income as dividend-paying companies usually have higher levels of free cash flow. Historically, dividend stocks have contributed notably to total market returns. Companies that paid dividends generated a 9.6% total annual return from 1973 to 2021, compared with an 8.2% return of the S&P 500 during the same time period.
The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Merck & Co., Inc. (NYSE:MRK) are some of the major stocks investors are turning their attention to, as these offer solid dividend growth history.
Our Methodology:
For this list, we selected stocks that have raised their dividends regularly for years and delivered long-term stability to shareholders. These stocks have stood the test of time and weathered several economic stocks. These dividend stocks are also popular among the over 900 elite money managers tracked by Insider Monkey.
Best Dividend Stocks of All Time
10. Walmart Inc. (NYSE:WMT)
Dividend Yield as of July 19: 1.73%
Walmart Inc. (NYSE:WMT) is a multinational retail company that operates a chain of hypermarkets and grocery stores in the US.
At the end of fiscal Q1 2023, Walmart Inc. (NYSE:WMT) reported $246.1 billion in total assets, up from $244.8 billion in the previous quarter. In FY21, the company generated over $24 billion in operating cash flow and returned $15.9 billion in dividends to shareholders. Walmart Inc. (NYSE:WMT) has been raising its dividends consecutively for the past 45 years. It pays a quarterly dividend of $0.56 per share, with a yield of 1.73%, as of July 19. The company used 47.8% of its net income in dividends in Q1.
In June, Morgan Stanley raised its price target on Walmart Inc. (NYSE:WMT) to $156, with an Overweight rating on the shares, highlighting the company’s stable customer base.
At the end of Q1 2022, 60 hedge funds held stakes in Walmart Inc. (NYSE:WMT), down from 63 a quarter earlier, according to Insider Monkey’s database. These hedge funds hold stakes valued at $6.56 billion. Rajiv Jain’s GQG Partners was the company’s leading shareholder in Q1, owning stakes worth roughly $2.3 billion.
In addition to The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Merck & Co., Inc. (NYSE:MRK), Walmart Inc. (NYSE:WMT) is also one of the prominent dividend stocks to consider.
9. The Kroger Co. (NYSE:KR)
Dividend Yield as of July 19: 2.17%
The Kroger Co. (NYSE:KR) is an Ohio-based retail company that operates supermarkets across the US. The company has over 2,800 stores across 35 states.
In July, UBS called The Kroger Co. (NYSE:KR) one of its top ten stock ideas for the third quarter due to elevated food inflation and the company’s improving market trends. The firm kept a Buy on the stock.
On June 23, The Kroger Co. (NYSE:KR) announced a quarterly dividend of $0.26 per share, up 24% from the previous dividend. This was the company’s 16th consecutive year of dividend growth. The company’s payout ratio is 29%, which is consistent with its 5-year average and below the consumer staples industry average of 50%. The company’s strong financial health signals future dividend growth, as it expects to generate between $2 to $2.2 billion in free cash flow in FY22. As of July 19, the stock’s dividend yield came in at 2.17%.
As per Insider Monkey’s Q1 2022 database, 45 hedge funds held investments in The Kroger Co. (NYSE:KR), worth over $5.1 billion. In the previous quarter, 41 hedge funds owned $4.1 billion worth of stakes in the company.
8. Colgate-Palmolive Company (NYSE:CL)
Dividend Yield as of July 19: 2.42%
Colgate-Palmolive Company (NYSE:CL) is a New York-based consumer products company that deals in household, healthcare, and personal care products.
In June, Evercore ISI called Colgate-Palmolive Company (NYSE:CL) one of the best consumer staples stocks for investors due to its pricing power in inflation. The firm raised its price target on the stock to $90 with an Outperform rating on the shares.
At the end of Q1 2022, Colgate-Palmolive Company (NYSE:CL) reported $877 million in cash and cash equivalents, up from $832 million in the previous quarter. The company paid $378 million in dividends during the quarter, compared with $376 million paid during the same period last year. Colgate-Palmolive Company (NYSE:CL) has been making dividend payments consecutively for the past 58 years while raising its payouts for 21 years. The company’s payout ratio stands at 75%, which is above its five-year average of 60%. Its current quarterly payout stands at $0.47 per share, with a yield of 2.42%, as of July 19.
At the end of Q1 2022, 50 hedge funds in Insider Monkey’s database owned stakes in Colgate-Palmolive Company (NYSE:CL), up from 48 in the previous quarter. The collective value of these stakes is nearly $2.6 billion. First Eagle Investment Management held the largest stake in the company in Q1, worth over $856.6 million.
7. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of July 19: 2.55%
The Procter & Gamble Company (NYSE:PG) was appreciated by Wells Fargo in June as consumer demand increased and the company’s sales momentum is strong. The firm kept an Overweight rating on the consumer goods company with a $170 price target.
In Q1 2022, The Procter & Gamble Company (NYSE:PG) spent over $2.2 billion in dividends and generated $3.2 billion in operating cash flow. The company’s adjusted free cash flow productivity stood at 75% in Q1 and the company expects it to reach 95% in FY22 with $8 billion allocated in dividend payments. On July 12, The Procter & Gamble Company (NYSE:PG) announced a quarterly dividend of $0.9133 per share, in line with its previous dividend. The company holds a 66-year track record of dividend growth. As of July 19, the stock’s dividend yield came in at 2.55%.
The Procter & Gamble Company (NYSE:PG) was a popular stock among elite funds in Q1, as 72 hedge funds in Insider Monkey’s database owned stakes in the company, up from 67 in the previous quarter. These stakes are collectively valued at over $6 billion.
6. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of July 19: 2.59%
Johnson & Johnson (NYSE:JNJ) is one of the oldest pharmaceutical industry companies. It specializes in medical devices, pharmaceuticals, and consumer goods.
In the second quarter of 2022, Johnson & Johnson (NYSE:JNJ) beat Street estimates, generating revenue of $24 billion, up 3% from the same period last year. In the past decade, the stock’s share price has tripled and sales are 50% higher than a ten-year ago period. Johnson & Johnson (NYSE:JNJ) has raised its dividend consecutively for the past 60 years, with a five-year CAGR of 5.87%. It currently pays a quarterly dividend of $1.13 per share, with a yield of 2.59%, as of July 19.
In July, Wells Fargo raised its price target on Johnson & Johnson (NYSE:JNJ) to $195 with an Overweight rating on the shares. The firm appreciated the company’s Q2 performance and believes that JNJ is well-positioned to overcome market volatility. Like JNJ, analysts and investors are also positive about The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Merck & Co., Inc. (NYSE:MRK).
As per Insider Monkey’s data, 83 hedge funds owned stakes in Johnson & Johnson (NYSE:JNJ) in Q1 2022, the same as in the previous quarter. The consolidated value of those stakes was over $7.4 billion.
Distillate Capital, an investment firm, discussed Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the fund said:
“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”
5. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of July 19: 2.85%
An American beverage company, The Coca-Cola Company (NYSE:KO) was added to Wells Fargo’s recession stock portfolio, as the stock is up 4.67% year-to-date, as of the close of July 19. The firm has an Overweight rating on the stock.
In Q1 2022, The Coca-Cola Company (NYSE:KO) generated $400 million in free cash flow and expects the number to reach $10.5 billion in FY22. The company’s cash flow from operations stood at $620 million at the end of the quarter. In February, The Coca-Cola Company (NYSE:KO) raised its quarterly dividend for the 60th consecutive year to $0.44 per share. Its payout ratio stands at 71.7%, improving from 82.2% in 2021. As of July 19, the stock’s dividend yield came in at 2.85%.
At the end of Q1 2022, 64 hedge funds in Insider Monkey’s database owned stakes in The Coca-Cola Company (NYSE:KO), down from 70 a quarter earlier. These stakes hold a collective value of over $29 billion. Warren Buffett’s Berkshire Hathaway was the largest stakeholder of the Georgia-based company in Q1, owning 400 million shares.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here is what the firm had to say:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
4. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of July 19: 2.97%
Merck & Co., Inc. (NYSE:MRK) is a New Jersey-based multinational pharmaceutical company that also operates outside US and Canada under different brand names.
Merck & Co., Inc. (NYSE:MRK) offers an annual payout of $2.76 per share, up 8.6% from a year earlier. The company has not slashed its dividend since 1985 and maintains an 11-year track record of consistent dividend growth. In Q1 2022, Merck & Co., Inc. (NYSE:MRK) generated $14.7 billion in free cash flow and expects it to reach $25 billion by the end of the year. Its payout ratio sits at 39.5%, down from 43.2% in 2021. As of July 19, the stock’s dividend yield came in at 2.97%.
In July, Street analysts presented a positive outlook on Merck & Co., Inc. (NYSE:MRK) ahead of its Q2 earnings. Both Morgan Stanley and UBS raised their price targets on the stock to $88 and $98, respectively.
According to Insider Monkey’s database, 84 hedge funds owned positions in Merck & Co., Inc. (NYSE:MRK), with stakes valued at over $5.8 billion. In comparison, 80 hedge funds owned stakes in the company in the previous quarter, worth $3.7 billion.
Carillon Tower Advisers mentioned Merck & Co., Inc. (NYSE:MRK) in its Q1 2022 investor letter. Here is what the firm has to say:
“Merck (NYSE:MRK) is a global pharmaceutical and chemicals company based in Germany. Shares fell along with other vaccine-linked names after the U.S. Supreme Court blocked a rule mandating that businesses with more than 100 employees require those employed to either be vaccinated or tested weekly.”
3. Chevron Corporation (NYSE:CVX)
Dividend Yield as of July 19: 4.06%
Chevron Corporation (NYSE:CVX) is a California-based energy company that sells diesel, gasoline, and aviation fuels. The company has five US fuel refineries and also owns a network of service stations.
In Q1 2022, Chevron Corporation (NYSE:CVX) reported total assets worth over $2.6 billion, up from $2.5 billion in the previous quarter. With the company’s current market cap of $279 billion, it is expected to generate $31.3 billion in free cash flow over the next three years. Chevron Corporation (NYSE:CVX) has raised its dividend consistently for the past 25 years, falling into the category of Dividend Champion. In the past 10 years, it raised its dividend by 62%, which shows its financial strength. The company currently pays a quarterly dividend of $1.42 per share, with a yield of 4.06%, as of the close of July 19.
In July, BofA lowered its price target on Chevron Corporation (NYSE:CVX) but kept a Buy rating on the shares, as oil prices rise in the US.
At the end of March 2022, 53 hedge funds in Insider Monkey’s database owned stakes in Chevron Corporation (NYSE:CVX), the same as in the previous quarter. The collective value of these stakes is nearly $28 billion. Warren Buffett, Ken Fisher, and Ken Griffin were some of the company’s prominent stakeholders in the first quarter.
Diamond Hill Capital mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
2. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of July 19: 4.09%
Exxon Mobil Corporation (NYSE:XOM) is a Texas-based international oil and gas company that also develops next-generation technologies to meet the world’s growing energy needs.
In Q1 2022, Exxon Mobil Corporation (NYSE:XOM) generated over $14.8 billion in cash flow from operating activities, which is more than covering capital investment and shareholder distributions. Free cash flow for the quarter came in at $11 billion, up from $7 billion in the same period last year. Exxon Mobil Corporation (NYSE:XOM) maintains a 39-year streak of dividend growth. The company pays a quarterly dividend of $0.88 per share, with a dividend yield of 4.09%, as of July 19.
In July, Piper Sandler upgraded Exxon Mobil Corporation (NYSE:XOM) to Overweight, as the company continued to invest in major oil and gas projects globally.
The number of hedge funds tracked by Insider Monkey owning stakes in Exxon Mobil Corporation (NYSE:XOM) grew to 83 in Q1 2022, from 71 a quarter earlier. These hedge funds hold a collective stake worth over $8.5 billion.
Saturna Capital mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter. Here is what the firm has 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.”
1. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of July 19: 4.78%
An American multinational tech company, International Business Machines Corporation (NYSE:IBM) generated $1.3 billion in net cash from operating activities and $2.1 billion in free cash flow. The company returned $1.5 billion to shareholders through dividends in Q2. International Business Machines Corporation (NYSE:IBM) has been making consistent dividend payments since 1916 while maintaining a 27-year track record of dividend growth. As of July 19, the stock’s dividend yield came in at 4.78%.
In July, Morgan Stanley lifted its price target on International Business Machines Corporation (NYSE:IBM) to $157, with an Overweight rating on the shares. The firm mentioned IBM as one of the best-performing stocks in its coverage in 2022 so far and expects the company’s outperformance in the second half of the year.
According to Insider Monkey’s database for Q1, 43 hedge funds owned stakes in International Business Machines Corporation (NYSE:IBM), down slightly from 44 in the previous quarter. These stakes are collectively valued at nearly $1.2 billion. Arrowstreet Capital was the company’s leading shareholder in Q1.
St. James Investment Company mentioned International Business Machines Corporation (NYSE:IBM) in its Q4 2021 investor letter. Here is what the firm had to say:
“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)
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Disclosure. None. 10 Best Dividend Stocks of All Time is originally published on Insider Monkey.
