In this article, we discuss 5 dividend stocks of all time. If you want to read our detailed analysis of the past performance of dividend stocks, go directly to read 10 Best Dividend Stocks of All Time.
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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