In this article, we discuss 5 stocks for passive income in 2022. If you want our detailed analysis of these stocks, go directly to 10 Stocks For Passive Income In 2022.
5. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of February 18: 4.78%
Number of Hedge Fund Holders: 57
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications conglomerate, offering multiple products and services including cable television, landline, broadband, digital television, internet, and telematics. Verizon Communications Inc. (NYSE:VZ)’s dividend yield on February 18 came in at 4.78%, making it a reliable stock for passive income in 2022.
On January 25, Verizon Communications Inc. (NYSE:VZ) reported its Q4 earnings. The company announced an EPS of $1.31, beating estimates by $0.03. Verizon Communications Inc. (NYSE:VZ)’s revenue came in at $34.07 billion, outperforming estimates by $30.57 million.
Verizon Communications Inc. (NYSE:VZ) on December 2 declared a $0.64 per share quarterly dividend, in line with previous. The dividend was paid on February 1, for shareholders of record on January 10.
Deutsche Bank analyst Bryan Kraft raised the price target on Verizon Communications Inc. (NYSE:VZ) to $59 from $57 and kept a Hold rating on the shares on January 26. The analyst sees about 8% upside in the stock over the next 12 months, with the target increasing on higher free cash flow estimates, notwithstanding the reduction to his 2022 estimate due to a pull forward in capex from 2023, increased working capital usage, and rising cash taxes.
Among the hedge funds tracked by Insider Monkey in the third quarter, 57 funds were bullish on Verizon Communications Inc. (NYSE:VZ), as compared to 63 funds in the quarter prior. Berkshire Hathaway is the biggest Verizon Communications Inc. (NYSE:VZ) stakeholder as of Q3 2021, owning 158.8 million shares of the company, worth $8.5 billion.
Here is what Weitz Investment Management Hickory Fund has to say about Verizon Communications Inc. (NYSE:VZ) in its Q4 2021 investor letter:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connections or by building new fiber-optic networks).”
4. National Retail Properties, Inc. (NYSE:NNN)
Dividend Yield as of February 18: 4.89%
Number of Hedge Fund Holders: 21
Based in Orlando, Florida, National Retail Properties, Inc. (NYSE:NNN) is a real estate investment trust that invests in high-quality properties across the United States. The company has offered 32 consecutive years of increased annual dividends.
In a press release on February 9, National Retail Properties, Inc. (NYSE:NNN) reported a Q4 FFO of $0.75, beating estimates by $0.03. Revenue of the company came in at $187.26 million, up 14.7% on a year-over-year basis, outperforming estimates by $2.89 million.
On February 10, B. Riley analyst Craig Kucera lowered the price target on National Retail Properties, Inc. (NYSE:NNN) to $50 from $55 and kept a Buy rating on the shares. Rising inflation concerns are leading to over 10% peer multiple contraction, the analyst told investors in a research note, but shares remain attractive on a price/NAV basis.
National Retail Properties, Inc. (NYSE:NNN) declared on January 14 a $0.53 per share quarterly dividend, in line with previous. The dividend was paid on February 15, to shareholders of record on January 31. National Retail Properties, Inc. (NYSE:NNN)’s dividend yield on February 18 was 4.89%.
A total of 21 hedge funds held long positions in National Retail Properties, Inc. (NYSE:NNN), up from 19 funds in the quarter earlier. Israel Englander’s Millennium Management is the largest National Retail Properties, Inc. (NYSE:NNN) stakeholder as of Q3 2021, with 864,311 shares worth $37.3 million.
3. Enbridge Inc. (NYSE:ENB)
Dividend Yield as of February 18: 6.51%
Number of Hedge Fund Holders: 24
Enbridge Inc. (NYSE:ENB) is a Canadian multinational pipeline company that offers pipeline transport and storage services for oil, natural gas, and natural gas liquids across the United States and Canada.
On February 11, Enbridge Inc. (NYSE:ENB)’s fourth quarter results were published. The company posted GAAP earnings per share of $0.71, surpassing consensus estimates by $0.13. Revenue over the period increased 24.68% from the prior-year quarter, reaching $9.82 billion, exceeding estimates by $3.48 billion.
Enbridge (NYSE:ENB) declared a C$0.860 per share quarterly dividend on December 7, a 3% increase from its prior dividend of C$0.835. The dividend is payable on March 1, to shareholders of record on February 15.
BMO Capital analyst Ben Pham raised the price target on Enbridge (NYSE:ENB) to C$59 from C$57 and kept an Outperform rating on the shares on February 14.
According to the third quarter database of Insider Monkey, Arrowstreet Capital held a significant stake in Enbridge (NYSE:ENB), with 837,902 shares worth $33.3 million. Overall, 24 hedge funds were bullish on the stock in Q3 2021.
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.”
2. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of February 18: 7.01%
Number of Hedge Fund Holders: 45
Altria Group, Inc. (NYSE:MO) is one of the largest American tobacco producers that distributes cigarettes and smokeless tobacco products. Altria Group, Inc. (NYSE:MO)’s dividend on February 18 came in at 7.01%, making it one of the top stocks for passive income in 2022.
On December 8, Altria Group, Inc. (NYSE:MO) reported a $0.90 per share quarterly dividend, in line with previous. The dividend was paid on January 10, to shareholders of record on December 23.
Altria Group, Inc. (NYSE:MO) published its Q4 results on January 27, posting an EPS of $1.09, beating estimates by $0.01. The $5.09 billion revenue surpassed market consensus estimates by $88.06 million.
BofA analyst Lisa Lewandowski downgraded Altria Group, Inc. (NYSE:MO) to Neutral from Buy with a price target of $50, down from $56. The company is likely to remain a “steady” earnings performer with limited input inflation and margin expansion, but the expectations of regulatory news flow may be an overhang on the stock in 2022, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 45 funds held long positions in Altria Group, Inc. (NYSE:MO), down from 47 funds in the quarter earlier. Harris Associates owned a leading stake in Altria Group, Inc. (NYSE:MO), with over 5 million shares worth $232.6 million.
Here is what Broyhill Asset Management has to say about Altria Group, Inc. (NYSE:MO) in its Q2 2021 investor letter:
“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
1. OneMain Holdings, Inc. (NYSE:OMF)
Dividend Yield as of February 18: 7.23%
Number of Hedge Fund Holders: 41
OneMain Holdings, Inc. (NYSE:OMF) is a financial services company based in Indiana, operating consumer finance and insurance businesses. In Q3 2021, 41 hedge funds were bullish on OneMain Holdings, Inc. (NYSE:OMF), with combined stakes equaling $1.04 billion. Basswood Capital held a significant stake in the company, with 2.3 million shares worth $129 million.
On February 2, OneMain Holdings, Inc. (NYSE:OMF) announced its Q4 earnings, posting an EPS of $2.38, topping estimates by $0.03. The $1.02 billion revenue was up 3.44% year-on-year.
OneMain Holdings, Inc. (NYSE:OMF) declared on February 2 a $0.95 per share quarterly dividend, a 35.7% increase from its prior dividend of $0.70. The dividend was paid on February 18, to shareholders of record on February 14. OneMain Holdings, Inc. (NYSE:OMF) delivers a 7.23% dividend yield, and is one of the top stocks for passive income in 2022.
JPMorgan analyst Richard Shane lowered the price target on OneMain Holdings, Inc. (NYSE:OMF) on January 19 to $56 from $64 and kept an Overweight rating on the shares. The analyst reduced target multiples on consumer finance companies by 8%, on average. He views 2022 as a transition year and believes that the probability is shifting from 2023 earnings representing normalized earnings to 2023.
You can also take a look at Retirement Stock Portfolio: 10 Safe Tech Stocks To Consider and 10 Best Dividend Aristocrats to Buy for 2022.
