In this article, we discuss 10 high-yield dividend stocks to buy in July.
In 2022, dividend stocks like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T) have grabbed the attention of investors who were previously more interested in the stocks of mega tech companies with high valuations. Due to rising interest rates and fears of recession, investors have turned to stocks that offer them a regular stream of income, especially those that have a stable dividend growth history. This complies with CNBC’s latest report, which states that investors should put money in companies that have a solid history of raising dividends during recessionary periods.
According to The Wealth Alliance’s president Eric Diton, dividend-paying stocks are profitable and in a rising interest-rate environment, they are one of the most reliable sources of income for investors. Since the start of the year, dividend payments have reached a record high, as more and more companies increase their payouts. In the second quarter of 2022, the companies in the S&P 500 paid out $140.6 billion in dividends, up from $123.4 billion paid during the same period last year, as reported by The Wall Street Journal. Analysts further expect a nearly 10% jump in dividend payments by the end of 2022 compared to last year’s figure of $511.2 billion.
Moreover, dividend-focused exchange-traded funds are also seeing record inflows this year, with assets amounting to $50 billion at the end of the first half of 2022. The trend is expected to continue for the rest of the year as investors don’t anticipate a near-term recovery in the more speculative corners of the market. This gives an advantage to dividend stocks like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T) that are up year-to-date and have surpassed the broader market so far in 2022. Considering this, we will focus on high-yield dividend stocks in this article.
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Our Methodology:
For this list, we took dividend stocks with greater than 4% yields. We also focused on the respective companies’ dividend history and analysts’ ratings. The stocks mentioned below are also popular among elite funds, according to Insider Monkey’s database.
10 High-Yield Dividend Stocks to Buy in July
10. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of July 13: 4.74%
International Business Machines Corporation (NYSE:IBM) is an American information technology company that manufactures and sells computer hardware and software and also offers related services to consumers.
In June, Wells Fargo added International Business Machines Corporation (NYSE:IBM) to its recession stock portfolio and upgraded the stock to ‘Overweight’.
International Business Machines Corporation (NYSE:IBM) has a run of making dividend payments since 1916 while raising its annual payouts during each of the past 27 years. In 2021, the company paid nearly $6 billion in dividends and generated over $12 billion in operating cash flow. International Business Machines Corporation (NYSE:IBM) also reduced its net debt to $51.7 billion in 2021, from $62.8 billion in 2019. The company offers a quarterly payout of $1.65 per share, with a yield of 4.74%, recorded on July 13.
The number of hedge funds tracked by Insider Monkey that own stakes in International Business Machines Corporation (NYSE:IBM) stands at 43 as of March 31, down from 44 in the previous quarter. The collective value of these stakes is over $1.16 billion. Arrowstreet Capital was the company’s leading shareholder in Q1.
Just like Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), IBM is also one of the prominent dividend stocks to consider.
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)
9. Leggett & Platt, Incorporated (NYSE:LEG)
Dividend Yield as of July 13: 4.76%
Leggett & Platt, Incorporated (NYSE:LEG) is an American manufacturing company that designs and produces home products and automobile-related products.
Leggett & Platt, Incorporated (NYSE:LEG) has raised its dividend 51 years in a row. In Q1 2022, the company generated $39 million in operating cash flows and has over $327.3 million in cash and cash equivalents as of the end of March. The company’s payout ratio stands at 56.7%, improving from 94% in 2020. Leggett & Platt, Incorporated (NYSE:LEG) currently pays a quarterly dividend of $0.44%, raising it by 5% in May. As of July, the stock’s dividend yield came in at 4.76%.
In June, Piper Sandler lowered its price target on Leggett & Platt, Incorporated (NYSE:LEG) to $36 with a ‘Neutral’ rating on the shares, highlighting the weak demand for retailers due to inflation.
At the end of March 2022, 15 hedge funds tracked by Insider Monkey’s database owned stakes in Leggett & Platt, Incorporated (NYSE:LEG), down from 21 a quarter earlier. Those stakes held a consolidated value of nearly $102 million.
8. Best Buy Co., Inc. (NYSE:BBY)
Dividend Yield as of July 13: 5.00%
Best Buy Co., Inc. (NYSE:BBY) is a Minnesota-based consumer electronics retailer that sells a wide variety of electronic products to customers in Mexico, Canada, and the U.S.
On May 25, Best Buy Co., Inc. (NYSE:BBY) declared a quarterly dividend of $0.88 per share, increasing it by 26% in March. The company has been raising its dividend annually for the past 9 years, with a 5-year CAGR of 20.6%. Its dividends are well covered by a 34% payout ratio, which indicates the company’s financial strength. In Q1, Best Buy Co., Inc. (NYSE:BBY) paid nearly $200 million in dividends to shareholders, up from $175 million paid during the same period last year. As of July 13, the stock’s dividend yield came in at 5%.
In May, DA Davidson raised its price target on Best Buy Co., Inc. (NYSE:BBY) to $110 with a ‘Buy’ rating on the shares, expecting the company to perform better in the second half of the year.
At the end of Q1 2022, 25 hedge funds in Insider Monkey’s database held investments in Best Buy Co., Inc. (NYSE:BBY), worth $251.4 million. In the previous quarter, 29 hedge funds owned stakes in the company, valued at $386.4 million. AQR Capital Management was the company’s leading shareholder in Q1, owning BBY shares worth nearly $90 million.
7. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Dividend Yield as of July 13: 5.03%
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is an Illinois-based holding company that owns retail pharmacy chains and several pharmaceutical manufacturing companies.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a Dividend Aristocrat, raising its annual dividend payouts each of the past 46 years, while also making dividend payments for the past 89 years. In fiscal Q3 2022, the company generated $1.3 billion in free cash flow and $1.6 billion in operating cash flow. The company’s payout ratio is also healthy at 38.7%. Walgreens Boots Alliance, Inc. (NASDAQ:WBA) currently offers a quarterly payout of $0.4775 per share, which yields 5.03% as of the close of July 13.
In July, JPMorgan lowered its price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $45 with a ‘Neutral’ rating on the shares, as the firm sees a decline in Covid-related spending.
According to Insider Monkey’s data, 38 hedge funds owned stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in Q1, down from 42 in the previous quarter. The collective value of those stakes was $736.8 million.
Miller Howard Investments mentioned Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q3 2021 investor letter. 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 took a position in Walgreens (WBA) based on its low valuation, high dividend yield, and stable business model.”
6. W. P. Carey Inc. (NYSE:WPC)
Dividend Yield as of July 13: 5.15%
An American real estate investment trust, W. P. Carey Inc. (NYSE:WPC) raised its quarterly dividend in June to $1.059 per share. Though the company’s dividend growth has been slow, it has managed to raise its dividends through every market clampdown in the past 26 years. Moreover, it also paid special dividends in 2007, 2009, and 2013, a period when some other major companies were trimming their dividends due to the Great Recession of 2008. At the end of Q1 2022, W. P. Carey Inc. (NYSE:WPC) had over $205.4 million available in cash and cash equivalents, up from $165.4 million in the previous quarter. As of July 13, the stock’s dividend yield was 5.15%.
In June, Wolfe Research initiated its coverage of W. P. Carey Inc. (NYSE:WPC) with a ‘Peer Perform’ rating and an $88 price target.
As of the quarter ended March 2022, 22 hedge funds tracked by Insider Monkey’s database held a bullish stance on W. P. Carey Inc. (NYSE:WPC), up from 20 a quarter earlier. The combined value of the long positions held by those 22 hedge funds stood at $128.3 million.
Like major dividend stocks such as Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), and AT&T Inc. (NYSE:T), WPC is also a coveted dividend stock among income investors.
5. Philip Morris International Inc. (NYSE:PM)
Dividend Yield as of July 13: 5.33%
Philip Morris International Inc. (NYSE:PM) sells and markets tobacco products in over 180 countries and is the second-largest seller of tobacco in the world.
On June 17, Philip Morris International Inc. (NYSE:PM) declared a quarterly dividend of $1.25 per share, consistent with the previous dividend. The company has been raising its dividend each year since it went public in 2008. In the past ten years, the company has raised its dividend by 56.4%, which makes it one of the best high-yield dividend stocks. Though its payout ratio is currently set at 80%, Philip Morris International Inc. (NYSE:PM) expects to stabilize its payout ratio in the upcoming quarters. In Q1 2022, the company generated operating cash flow of around $10 billion, which shows that it is well-positioned to carry out its operations smoothly.
At the end of Q1 2022, 55 of the hedge funds that are monitored by Insider Monkey’s database owned stakes in Philip Morris International Inc. (NYSE:PM), valued at over $6.6 billion. In comparison, 47 hedge funds held positions in the New York-based company in the previous quarter, with stakes valued at roughly $6.2 billion.
4. Universal Corporation (NYSE:UVV)
Dividend Yield as of July 13: 5.79%
Universal Corporation (NYSE:UVV) is a Virginia-based tobacco merchant that specializes in contracting, financing, and processing leaf tobacco for sale.
Universal Corporation (NYSE:UVV) has a solid dividend history, raising its payout every year since 1971. In Q1 2022, the company paid $76.4 million in dividends, up from $75 million paid during the same period last year. Moreover, it also grew its net income in Q1 to $103.6 million, from $96.3 million in the prior-year quarter. On May 25, Universal Corporation (NYSE:UVV) announced a 1.3% hike in its quarterly dividend to $0.79 per share, which equates to a yield of 5.79% as of July 13.
As per Insider Monkey’s Q1 2022 database, 10 hedge funds held investments in Universal Corporation (NYSE:UVV), up from 7 in the previous quarter. Those investments were collectively valued at over $85.6 million. With 890,281 UVV shares, Pzena Investment Management held the largest position in the Virginia-based company in Q1.
3. Northwest Bancshares, Inc. (NASDAQ:NWBI)
Dividend Yield as of July 13: 6.27%
Northwest Bancshares, Inc. (NASDAQ:NWBI) is an Ohio-based savings bank that provides personal and business banking solutions.
Northwest Bancshares, Inc. (NASDAQ:NWBI) currently pays a quarterly dividend of $0.20 per share, with shares yielding 6.27% as of July 13. Based on its Q1 results, the company has a relatively high payout ratio of 90% but a dividend cut is not expected due to its strong financials. Moreover, the company also reached a payout of 100% in both 2020 and 2016 but managed to grow its dividends in those years as well. Northwest Bancshares, Inc. (NASDAQ:NWBI) has made dividend payments for the past 110 quarters while maintaining a 13-year track record of consistent dividend growth.
In July, B. Riley expressed concerns regarding rising interest rates, which pose risk to loan growth and credit. In light of this, the firm lowered its price target on Northwest Bancshares, Inc. (NASDAQ:NWBI) to $11 with a ‘Neutral’ rating on the shares.
At the end of March 2022, Northwest Bancshares, Inc. (NASDAQ:NWBI) was a part of 12 hedge funds’ portfolios, down from 13 in the previous quarter, according to Insider Monkey’s database. The consolidated value of the stakes held by those 12 hedge funds stood at over $12.5 million. Ken Griffin, D E Shaw, and Ryan Tolkin were some of the company’s major shareholders in Q1.
2. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of July 13: 6.32%
Enbridge Inc. (NYSE:ENB) is a Canadian energy infrastructure company that has a delivery network of crude oil, natural gas, and renewable energy.
In Q1 2022, Enbridge Inc. (NYSE:ENB) reported a 14.3% year-over-year growth in its operating cash flow to C$2.93 billion. Its free cash flow of C$1.46 billion was not sufficient for dividend coverage of C$1.7 billion during the quarter, which pushed its payout ratio to 84.3%. However, the company has raised its dividend payments for the past 27 years and expects to continue with this practice in the coming years as well. Enbridge Inc. (NYSE:ENB) currently offers a quarterly payout of C$0.86 per share, which provides a yield of 6.32% as of July 13.
In May, both RBC Capital and National Bank lifted their price targets on Enbridge Inc. (NYSE:ENB), to C$65 and C$60, respectively.
Rajiv Jain’s GQG Partners was the largest shareholder of Enbridge Inc. (NYSE:ENB) in Q1, owning a stake worth over $2 billion. In addition to this, 24 hedge funds tracked by Insider Monkey’s database reported owning stakes in the company, valued at nearly $2.4 billion.
ClearBridge Investments mentioned Enbridge Inc. (NYSE:ENB) in its Q3 2021 investor letter. Here is what the firm had to say:
“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.”
1. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of July 13: 8.51%
Altria Group, Inc. (NYSE:MO) is a Virginia-based manufacturing company, specializing in the production of tobacco, cigarettes, and related products. The stock rose 1.41% on July 11, gaining investors’ attention due to having the second-highest yield in the S&P 500 index.
Altria Group, Inc. (NYSE:MO)’s strong dividend history makes it one of the best high-yield dividend stocks, as the company has managed to raise its dividend 56 times over the past 52 years. The company’s payout ratio of 74% is below its goal of 80%, which shows that it’s well positioned for its 2022 dividend raise. Altria Group, Inc. (NYSE:MO) ended Q1 with over $5.3 billion available in cash and cash equivalents, up from $4.5 billion a quarter earlier. Currently, it offers a quarterly payout of $0.90 per share, which yields 8.51% as of July 13.
In June, Morgan Stanley upgraded Altria Group, Inc. (NYSE:MO) to ‘Equal Weight’, appreciating the company’s strong fundamentals. The firm kept a $43 price target on the stock.
According to Insider Monkey’s Q1 database, 47 hedge funds owned stakes in Altria Group, Inc. (NYSE:MO), up from 39 in the previous quarter. Those 47 stakes held a collective value of approximately $2 billion.
You can also take a look at Top Stock Picks of Michael Burry and 10 Low Beta Dividend Stocks with High Yields
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Disclosure. None. 10 High-Yield Dividend Stocks to Buy in July is originally published on Insider Monkey.
