In this article, we discuss 5 dividend stocks for college students that Redditors recommend. If you want to read our detailed analysis of the current investing environment, go directly to read Redditors Recommend These 10 Dividend Stocks for College Students.
5. Air Products and Chemicals, Inc. (NYSE:APD)
Dividend Yield as of August 16: 2.37%
Air Products and Chemicals, Inc. (NYSE:APD) is an American chemical industry company that sells gases and chemicals for industrial uses. In its fiscal Q3 2022, the company reported an operating cash flow of over $908 million, up from $520 million in the previous quarter. The company’s free cash flow for the quarter came in at $202.7 million. Its revenue also jumped by 22.7% year-over-year to $3.19 billion. This shows that the company’s fundamentals are solid that will support the dividend growth going forward, making it a suitable option for college students.
Air Products and Chemicals, Inc. (NYSE:APD) currently pays a quarterly dividend of $1.62 per share, with a dividend yield of 2.37%, as of August 16. The company has raised its dividends for 40 years in a row and has a safe payout ratio of 62.6%.
In August, BMO Capital upgraded Air Products and Chemicals, Inc. (NYSE:APD) to Outperform with a $321 price target, appreciating the company’s improving profile in this uncertain market situation.
As per Insider Monkey’s Q1 2022 database, 39 hedge funds owned stakes in Air Products and Chemicals, Inc. (NYSE:APD), down from 40 a quarter earlier. These stakes hold a consolidated value of nearly $859 million.
Renaissance Technologies was the company’s leading shareholder in the first quarter.
ClearBridge Investments mentioned Air Products and Chemicals, Inc. (NYSE:APD) in its Q1 2022 investor letter. Here is what the firm has to say:
“While commodities-exposed areas of the materials sector such as mining and steel fared well in the quarter, we tend to have less direct exposure to commodities across our portfolio. Holdings like industrial gas company Air Products and Chemicals (NYSE:APD) faced sharp input cost escalation, driving meaningful margin compression, which was not well-received by investors. While negative in the short term, we remain confident that the company will be able to adjust pricing accordingly and recover margins over the medium term.”
4. Target Corporation (NYSE:TGT)
Dividend Yield as of August 16: 2.37%
An American big-box store company, Target Corporation (NYSE:TGT) has improved its grocery margins over the years and has a decent grocery section online. The company holds one of the longest track records of dividend growth, raising its dividends consistently for the past 51 years. It pays a quarterly dividend of $1.08 per share and has a dividend yield of 2.37%, as recorded on August 16.
In Q1 2022, Target Corporation (NYSE:TGT) reported a 22.9% year-over-year growth in its comparable sales and a 50.2% growth in its digital comparable sales. The company ended the quarter with over $1.1 billion available in cash and cash equivalents, with total assets standing at over $50.8 billion. It paid $424 million to shareholders during the quarter, up from $340 million paid during the same period last year.
In August, JPMorgan lifted its price target on Target Corporation (NYSE:TGT) to $190 with an Overweight rating on the shares, expecting the company to report solid Q2 earnings.
Target Corporation (NYSE:TGT) was a part of 50 hedge fund portfolios in Q1 2022, up from 49 in the previous quarter, as shown by Insider Monkey’s database. These hedge funds owned stakes worth nearly $3 billion in the company. Jim Simons, Israel Englander, and Ken Griffin were some of the company’s major stakeholders in Q1.
3. Caterpillar Inc. (NYSE:CAT)
Dividend Yield as of August 16: 2.43%
Caterpillar Inc. (NYSE:CAT) is an Illinois-based construction company that deals in the production of industrial machinery. The company has great growth potential because a lot of its equipment is needed for mining purposes and the production of EVs, which is reporting strong global sales. In August, Credit Suisse appreciated the company’s strong pricing power and sees strong demand across its all segments. Given this, the firm raised its price target on the stock to $236 with an Outperform rating on the shares.
In the first half of 2022, Caterpillar Inc. (NYSE:CAT) generated $2.5 billion in free cash flow and spent over $600 million in dividends during this time. The company’s strong financials confirm that its dividends are well-covered for the future as well. On June 8, Caterpillar Inc. (NYSE:CAT) announced an 8% hike in its quarterly dividend to $1.20 per share. This was the company’s 28th year of dividend growth with an 89-year history of uninterrupted dividend payments. As of August 16, the stock’s dividend yield stood at 2.43%.
As of the close of Q1 2022, Bill & Melinda Gates Foundation Trust owned $1.6 billion worth of stakes in Caterpillar Inc. (NYSE:CAT), becoming the company’s largest stakeholder. In addition to this, 54 hedge funds in Insider Monkey’s database were bullish on the company in Q1, owning stakes worth over $4 billion.
Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
2. Kellogg Company (NYSE:K)
Dividend Yield as of August 16: 3.01%
Kellogg Company (NYSE:K) is an American multinational food manufacturing company. The stock is relatively cheap, trading at $75.6 per share, which makes it a good investment for students.
In Q2 2022, Kellogg Company (NYSE:K) generated $349 million in free cash flow, up from $189 million in the previous quarter. The company’s operating cash flow came in at $478 million, growing from $327 million in the preceding quarter. During the quarter, it paid over $394 million in dividends to shareholders.
On July 29, Kellogg Company (NYSE:K) hiked its quarterly dividend by 2% to $0.59 per share. This was the company’s 18th consecutive year of dividend growth. As of August 16, the stock’s dividend yield came in at 3.01%.
At the end of Q1 2022, 22 hedge funds tracked by Insider Monkey reported owning stakes in Kellogg Company (NYSE:K), down from 31 in the previous quarter. The collective value of these stakes is over $382.8 million, compared with $350.7 million worth of stakes owned by hedge funds in the previous quarter.
1. Realty Income Corporation (NYSE:O)
Dividend Yield as of August 16: 4.00%
Realty Income Corporation (NYSE:O) is an American real estate investment trust. The company is a suitable option for college students as it pays monthly dividends to shareholders. Moreover, it has a strong 53-year history of paying dividends, while raising its payouts consistently for the past 28 years. It currently pays a monthly dividend of $0.2475 per share, with a dividend yield of 4%, as recorded on August 16.
In June, Credit Suisse mentioned Realty Income Corporation (NYSE:O) as one of its Top Picks and initiated its coverage of the stock with an Outperform rating and a $75 price target. In the same month, Jefferies gave a Buy rating to the stock.
At the end of Q1 2022, 22 hedge funds in Insider Monkey’s database held investments in Realty Income Corporation (NYSE:O), worth $284.8 million. In the previous quarter, 30 hedge funds owned stakes in the company, with a total value of nearly $400 million.
You can also take a look at 10 Best Dividend Stocks to Buy in 2022 and 10 Best REIT ETFs to Buy Now
