In this article, we discuss 5 dividend challengers for 2022. To check out some more dividend stocks in this list, click 10 Dividend Challengers for 2022.
5. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 37
Dividend Yield as of April 22: 1.96%
Number of Years of Consecutive Dividend Increases: 8
DICK’S Sporting Goods, Inc. (NYSE:DKS) is a Pennsylvania-based sporting equipment retailer that caters to customers in the eastern United States. The company was incorporated in 1948 and operates more than 700 storefronts across the country.
On March 16, DICK’S Sporting Goods, Inc. (NYSE:DKS) declared a $0.4875 per share quarterly dividend, an 11.4% increase from its prior dividend of $0.4375. The dividend was paid to shareholders on March 25, and the company delivers a dividend yield of 1.96% as of April 22.
Barclays analyst Adrienne Yih on April 1 maintained an Overweight rating on DICK’S Sporting Goods, Inc. (NYSE:DKS) but lowered the firm’s price target on the shares to $134 from $147. He downgraded the retail sector to Neutral, citing cost inflation, uncertain demand and supply, and heightened operational risk. However, on April 13, Cleveland Research announced that its checks reflect store sales at DICK’S Sporting Goods, Inc. (NYSE:DKS) appear on track to surpass consensus estimates in Q1-to-date, due to solid trends in February. Margins also look strong because of resilient full-price demand, less markdowns, and promotions in the current quarter.
In the fourth quarter of 2021, 37 hedge funds reported owning stakes in DICK’S Sporting Goods, Inc. (NYSE:DKS) according to Insider Monkey’s records, collectively worth approximately $1.3 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held one of the prominent positions in the company, with 1.6 million shares valued at $191 million.
4. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 39
Dividend Yield as of April 22: 5.80%
Number of Years of Consecutive Dividend Increases: 5
Kinder Morgan, Inc. (NYSE:KMI) is a Texas-based energy infrastructure company that functions via four segments – Natural Gas Pipelines, Products Pipelines, Terminals, and CO2. Kinder Morgan, Inc. (NYSE:KMI) is a significant dividend challenger to watch for 2022, with five years of consecutive dividend increases under its belt.
Reporting its financial results for the first quarter of 2022 on April 20, Kinder Morgan, Inc. (NYSE:KMI) announced earnings per share of $0.32, beating market consensus estimates by $0.04. Revenue for the period came in at $4.29 billion, exceeding analysts’ forecasts by $546.32 million.
On April 20, Kinder Morgan, Inc. (NYSE:KMI) declared a quarterly per share dividend of $0.2775, a 2.8% increase from its prior dividend of $0.27. The dividend is payable on May 16, to shareholders of the company at the close of business on May 2. Kinder Morgan, Inc. (NYSE:KMI)’s dividend yield as of April 22 stood at 5.80%.
Mizuho analyst Gabriel Moreen on April 21 maintained a Buy recommendation on Kinder Morgan, Inc. (NYSE:KMI) and raised the firm’s price target on the stock to $22 from $21. The company reported a strong quarter and announced its intention to pursue brownfield compression expansions on its two Permian natural gas takeaway pipelines, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 39 funds were bullish on Kinder Morgan, Inc. (NYSE:KMI) at the end of the fourth quarter of 2021, with combined stakes worth approximately $999 million. Bob Peck and Andy Raab’s FPR Partners held the leading position in the company, with 17.8 million shares valued at $282.7 million.
3. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 40
Dividend Yield as of April 22: 2.15%
Number of Years of Consecutive Dividend Increases: 8
Mondelez International, Inc. (NASDAQ:MDLZ) is an American multinational company that markets and distributes confectionary products, beverages, and snack foods in Latin America, North America, Asia, the Middle East, Africa, and Europe. The company has consecutively increased its dividends for the last eight years.
In 2021, Mondelez International, Inc. (NASDAQ:MDLZ) reported a full-year revenue of $28.7 billion, compared to a revenue of $26.5 billion in the previous year. The $4.3 billion net income in 2021 grew about 21% from the $3.5 billion income in 2020.
On April 12, Credit Suisse analyst Robert Moskow reinstated coverage of Mondelez International, Inc. (NASDAQ:MDLZ) with an Outperform rating and a $70 price target. The analyst noted that roughly 40% of Mondelez International, Inc. (NASDAQ:MDLZ)’s sales are generated from developing markets, and it is the best-positioned company to benefit from global GDP growth. He expects profit pressure in Q1 to prove transitory and believes Mondelez International, Inc. (NASDAQ:MDLZ)’s Investor Day on May 10 will offer a positive catalyst.
Mondelez International, Inc. (NASDAQ:MDLZ) declared on February 3 a $0.35 per share quarterly dividend, in line with previous. The dividend was paid on April 14, to shareholders of the company on March 31. Mondelez International, Inc. (NASDAQ:MDLZ) delivers a dividend yield of 2.15% as of April 22.
A total of 40 hedge funds were bullish on Mondelez International, Inc. (NASDAQ:MDLZ) at the end of the fourth quarter of 2021, compared to 46 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the biggest position holder in the company, with 9.2 million shares worth $611 million.
2. Dollar General Corporation (NYSE:DG)
Number of Hedge Fund Holders: 44
Dividend Yield as of April 22: 0.88%
Number of Years of Consecutive Dividend Increases: 8
Dollar General Corporation (NYSE:DG) is an American discount retailer that sells clothing, cleaning supplies, home decor, health and beauty aids, pet supplies, toys, seasonal items, and groceries. Dollar General Corporation (NYSE:DG) has a history of consistently raising its dividends for eight years.
On March 17, Dollar General Corporation (NYSE:DG) declared a $0.55 per share quarterly dividend, a 31% increase from its prior dividend of $0.42. The dividend was paid on April 19, to shareholders of the company as of April 5.
Deutsche Bank analyst Krisztina Katai on March 18 reiterated a Buy recommendation on Dollar General Corporation (NYSE:DG) and raised the firm’s price target on the shares to $242 from $230. The analyst noted that while the company’s Q4 results “were a bit softer”, with same-store sales and gross margin detracting, she is positive about the “constructive” 2022 outlook.
According to Insider Monkey’s Q4 data, 44 hedge funds held long positions in Dollar General Corporation (NYSE:DG), with collective stakes valued at $2.20 billion. Tim Hurd and Ed Magnus’ BlueSpruce Investments is the largest position holder in the company, with 2.70 million shares worth approximately $637 million.
Here is what LRT Capital Management has to say about Dollar General Corporation (NYSE:DG) in its Q3 2021 investor letter:
“Executive Summary
At LRT Capital Management we are continuously searching the market for great investment opportunities. Our favorite finds are companies with moats and growth opportunities that justify a higher price than what the stock is trading for. One of our holdings (approximately 1.5% of our long exposure) is Dollar General (DG), so today, we wanted to tell you a bit about this great company.
Company Overview
Dollar General is a discount retailer with the largest brick-and-mortar presence in the United States by store count. The company’s largest concentration of stores can be found in the southern, southwestern, midwestern, and eastern parts of the United States.10 Dollar General was founded in 1939 by J.L. Turner, who originally named the company “J.L. Turner and Son, Wholesale”. As the name suggests, the company began its life as a wholesaler, but quickly turned to a retailer of general store goods. By the early 1950s, the company had annual sales of $2 million per year,12 which is the equivalent of $22.95 million in 2021 dollars when adjusted for inflation.
The first Dollar General store opened on June 1st, 1955 in Springfield Kentucky. The simple concept was that no item in the store would cost more than one dollar. The company changed its name to Dollar General Corporation in 1968 when Dollar General became publicly traded. At the time of its initial public offering, the business generated more than $40 million in annual sales. The company’s common stock was publicly traded from 1968 until July 2007, when it was taken private by KKR. The company went public again in November 2009, under the ticker DG.
Today, Dollar General is an evolved, and phenomenal business with more room for growth. Annual sales reached a record $33.7 billion in fiscal year 2021 after consecutively growing the top line for many years. The company’s main products are every-day necessities and consumables purchased by lower income consumers on tight budgets…”
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 95
Dividend Yield as of April 22: 0.21%
Number of Years of Consecutive Dividend Increases: 5
Thermo Fisher Scientific Inc. (NYSE:TMO) is a Massachusetts-based company that provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and services worldwide. Thermo Fisher Scientific Inc. (NYSE:TMO) made it to our list of dividend challengers for 2022, with a history of increasing dividends consecutively for five years.
On February 23, Thermo Fisher Scientific Inc. (NYSE:TMO) declared a $0.30 per share quarterly dividend, a 15% increase from its earlier dividend of $0.26. The dividend was paid to shareholders of the company for April 14.
Thermo Fisher Scientific Inc. (NYSE:TMO) posted its Q4 2021 results on February 2, announcing earnings per share of $6.54, beating market consensus by $1.27. The $10.70 billion revenue outperformed analysts’ predictions by $1.45 billion.
On April 20, the company inaugurated its new high-tech production facility in Utah, to develop vaccines and targeted therapies. The $44 million facility is part of Thermo Fisher Scientific Inc. (NYSE:TMO)’s $650 million multi-year investment announced last year, to promote flexible, scalable, and dependable production of new and existing biologics and vaccines, including for COVID-19.
According to the fourth quarter database of Insider Monkey, 95 hedge funds were bullish on Thermo Fisher Scientific Inc. (NYSE:TMO), compared to 94 funds in the prior quarter. The total stakes held in Q4 amounted to $9.4 billion, up from $8.2 billion. Ken Fisher’s Fisher Asset Management is the biggest shareholder of the company, with a position worth $1.4 billion.
Here is what ClearBridge Investments Sustainability Leaders Strategy has to say about Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q4 2021 investor letter:
“Improving health remains a key impact theme for the portfolio, and over the past year or so we have increased our exposure to the health care sector, through the addition of Thermo Fisher Scientific, a leading health care tools company, a leading provider of fertility benefit management services to self-insured employers that offers a rare win-win-win for employers, employees, health systems, and doctors, with clear savings and quality improvements.”
You can also take a look at 10 Blue Chip Stocks with Dividends and 10 Dividend Stocks Better Than Cryptocurrencies.
