In this article, we discuss 10 safe dividend stocks with over 4% yield. You can skip our detailed analysis of dividend stocks and their performance, and go directly to read 5 Safe Dividend Stocks with Over 4% Yield.
During the current market situation, of all the asset classes, dividend stocks seem to perform well this year because of investors’ inclination towards stable income. This is evident from the year-to-date returns of the S&P 500 High Dividend Index, which gained 2.64% as of August 15 close, compared with a 10.4% loss of the wider market in 2022 so far.
Historically, dividend stocks have shown resilience in volatile market situations. According to a report published by Lord Abbett, a private investment management company, dividends have outperformed their peers when the market returns remained below average. For example, in each decade since 1929, when annualized returns were less than 10%, dividend stocks’ average contribution to the S&P 500’s total return stood at 76%. The report further mentioned that considering the market’s adaption to the post-pandemic world, this decade is following the same pattern as the 2010s, extending importance to dividend stocks. Another report by Nuveen also mentioned that from 1973 to 2021, dividend growers and initiators have generated positive returns with fewer risks than companies that slashed their payouts or offered no dividends at all. So, dividend stocks like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ) are grabbing investors’ attention in today’s market environment.
Dividend companies with compelling long-term performance and solid yield show quality and ability to maintain those payouts in the future. Kendall Capital Management’s CEO Clark A. Kendall recommends a strategy called ‘Dogs of the Dow’, which suggests investing in the highest dividend yields in the Dow Jones Industrial Average. He mentioned that high dividend-paying stocks offer a great opportunity for increasing revenues that would provide safety against inflationary periods.
Our Methodology
We picked dividend stocks with over 4% yield and strong dividend growth track record. These stocks are reliable during volatile market situation and are also popular among over 900 elite money managers tracked by Insider Monkey as of the end of March this year.
10. The Toronto-Dominion Bank (NYSE:TD)
Dividend Yield as of August 16: 4.07%
The Toronto-Dominion Bank (NYSE:TD) is a Canadian multinational banking and financial services company that provides banking and mortgage-related services to its customers.
In Q2 2022, The Toronto-Dominion Bank (NYSE:TD) reported a net income of over $3.8 billion, up from $3.6 billion in the same period last year. The company’s revenue for the quarter came in at C$11.26 billion, showing a 10.1% year-over-year growth. Moreover, its asset under management also grew 4% year-over-year to $411 billion. The Toronto-Dominion Bank (NYSE:TD) pays a quarterly dividend of C$0.89 per share, with a dividend yield of 4.07%, as of August 16. The company maintains an 11-year track record of consistent dividend growth.
At the end of Q1 2022, 21 hedge funds tracked by Insider Monkey reported owning stakes in The Toronto-Dominion Bank (NYSE:TD), up from 17 in the previous quarter. These stakes have a total value of over $188.3 million. Ken Griffin’s Citadel Investment Group was one of the company’s most prominent stakeholders in Q1.
In addition to famous dividend stocks like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ), The Toronto-Dominion Bank (NYSE:TD) can also be a good addition to dividend portfolios.
9. Canadian Natural Resources Limited (NYSE:CNQ)
Dividend Yield as of August 16: 4.26%
Canadian Natural Resources Limited (NYSE:CNQ) is an oil and natural gas company and is one of the largest producers of heavy crude oil in Canada. In Q2 2022, the company generated approximately $5.4 billion in adjusted funds flow, while its free cash flow came in at $3.3 billion. The dividend payments for the quarter amounted to $900 million, indicating strong FCF generation. Canadian Natural Resources Limited (NYSE:CNQ)’s management announced that it will allocate 50% of its free cash flow to share repurchases.
On August 4, Canadian Natural Resources Limited (NYSE:CNQ) declared a quarterly dividend of C$0.75 per share, with a special dividend of C$1.50 per share. The company has been raising its dividends consistently for the past 22 years. As of August 16, the stock’s dividend yield came in at 4.26%.
In July, BofA upgraded Canadian Natural Resources Limited (NYSE:CNQ) to Buy with a $100 price target, presenting a positive stance on the oil industry.
The number of hedge funds tracked by Insider Monkey owning stakes in Canadian Natural Resources Limited (NYSE:CNQ) stood at 32 in Q1 2022, growing from 23 in the previous quarter. The collective value of these stakes is over $2.5 billion.
8. Leggett & Platt, Incorporated (NYSE:LEG)
Dividend Yield as of August 16: 4.29%
A Missouri-based manufacturing company, Leggett & Platt, Incorporated (NYSE:LEG) reported an operating cash flow of nearly $90 million in Q2 2022, up from $39 million in the previous quarter. The company’s free cash flow came in at over $67.7 million, compared with $20.3 million in the preceding quarter, which shows that the company’s dividends are well covered. For FY22, the company expects its operating cash flow of approximately $600 million.
Leggett & Platt, Incorporated (NYSE:LEG) offers $0.44 per share in quarterly dividends and has a dividend yield of 4.29%, as of August 16. The company holds one of the longest dividend growth track records, raising its payouts consecutively for 51 years.
At the end of Q1 2022, Renaissance Technologies was the largest stakeholder of Leggett & Platt, Incorporated (NYSE:LEG), owning stakes worth over $24.8 million. In addition to this, 15 hedge funds tracked by Insider Monkey owned investments in the manufacturing company in Q1, with a total value of nearly $102 million.
7. National Retail Properties, Inc. (NYSE:NNN)
Dividend Yield as of August 16: 4.57%
National Retail Properties, Inc. (NYSE:NNN) is a Florida-based real estate investment trust that invests in high-quality properties subjected to long-term leases. The stock’s price target was raised to $54 by Stifel in August as the company beat Street estimates in its recent earnings report. The firm maintained its Buy rating on the stock.
In Q2 2022, National Retail Properties, Inc. (NYSE:NNN) reported revenue of $190.7 million, presenting a 6.6% growth from the same period last year. The company’s free cash flow for the quarter came in at nearly $111 million while its total assets amounted to over $7.8 billion.
On July 15, National Retail Properties, Inc. (NYSE:NNN) declared a quarterly dividend of $0.55 per share, raising it by 4%. This marked the company’s 33rd consecutive year of dividend growth. As of August 16, the stock’s dividend yield stood at 4.57%.
As per Insider Monkey’s Q1 2022 database, 18 hedge funds owned stakes in National Retail Properties, Inc. (NYSE:NNN), up from 16 in the preceding quarter. The combined value of these stakes is over $92.5 million.
6. W. P. Carey Inc. (NYSE:WPC)
Dividend Yield as of August 16: 4.79%
W. P. Carey Inc. (NYSE:WPC) is an American real estate investment trust company that owns over 1,200 properties in 25 countries. In Q2 2022, the company posted an FFO of $1.27, which beat estimates by $0.04. The company’s revenue stood at $344.3 million, up 9.4% from the same period last year. Its dividend payments are safe within its free cash flow and amounted to $207.5 million in Q2, compared with $203.8 million in the preceding quarter.
In June, W. P. Carey Inc. (NYSE:WPC) declared a quarterly dividend of $1.059 per share, growing it by 0.2% from the previous dividend. The company maintains a 26-year streak of dividend growth. The stock’s dividend yield stood at 4.79%, as of August 16.
As of the close of Q1 2022, 22 hedge funds owned stakes in W. P. Carey Inc. (NYSE:WPC), compared with 20 a quarter earlier, as shown by Insider Monkey’s data. The stakes hold a combined value of over $128.3 million. Jim Simons and Ken Griffin were the company’s most prominent stakeholders in Q1. In addition to WPC, hedge funds were also bullish on other dividend stocks like AbbVie Inc. (NYSE:ABBV), Exxon Mobil Corporation (NYSE:XOM), and Johnson & Johnson (NYSE:JNJ) in Q1.
Click to continue reading and see 5 Safe Dividend Stocks with Over 4% Yield.
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Disclosure. None. 10 Safe Dividend Stocks with Over 4% Yield is originally published on Insider Monkey.
I specialize in financial markets and investment strategies, particularly focusing on dividend stocks and their performance within various market conditions. My expertise stems from years of active involvement in analyzing market trends, studying financial reports, and monitoring investor sentiments. Over time, I have cultivated a deep understanding of dividend-paying companies, their historical performances, and their potential to generate stable income for investors.
The article you provided discusses safe dividend stocks with over a 4% yield, highlighting their resilience and attractiveness to investors, especially during volatile market periods. It underscores the importance of dividend stocks in a portfolio, particularly in times of economic uncertainty.
Let's break down the key concepts mentioned in the article:
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S&P 500 High Dividend Index Performance: The S&P 500 High Dividend Index's year-to-date returns, gaining 2.64% as of August 15, are contrasted with the wider market's 10.4% loss in 2022 so far. This illustrates the relative outperformance of dividend stocks during the stated period.
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Historical Performance of Dividend Stocks: Historical data, as cited from a report by Lord Abbett, indicates that dividend stocks have consistently contributed significantly to the S&P 500's total return during decades of below-average market returns.
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Importance of Dividend Stocks in Post-Pandemic Markets: The article suggests that the current market environment resembles the post-pandemic world, where dividend stocks continue to hold importance, as indicated by reports from investment management firms like Lord Abbett and Nuveen.
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Kendall Capital Management's 'Dogs of the Dow' Strategy: The strategy involves investing in high dividend-yielding stocks in the Dow Jones Industrial Average, emphasizing their potential to provide stable income and mitigate risks during inflationary periods.
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Methodology for Selecting Dividend Stocks: The article outlines a methodology for selecting dividend stocks with over a 4% yield and a strong track record of dividend growth. It mentions these stocks are favored by elite money managers tracked by Insider Monkey.
Now, let's briefly discuss the five safe dividend stocks highlighted in the article:
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The Toronto-Dominion Bank (NYSE: TD): A Canadian multinational banking and financial services company with a 4.07% dividend yield and a consistent track record of dividend growth.
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Canadian Natural Resources Limited (NYSE: CNQ): A major producer of oil and natural gas with a dividend yield of 4.26% and a history of raising dividends for the past 22 years.
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Leggett & Platt, Incorporated (NYSE: LEG): A Missouri-based manufacturing company with a 4.29% dividend yield and a remarkable streak of increasing dividends for 51 consecutive years.
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National Retail Properties, Inc. (NYSE: NNN): A real estate investment trust (REIT) based in Florida, offering a 4.57% dividend yield and maintaining 33 years of consecutive dividend growth.
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W. P. Carey Inc. (NYSE: WPC): A real estate investment trust owning properties globally, boasting a dividend yield of 4.79% and a 26-year history of consistent dividend increases.
These stocks exemplify the criteria outlined in the article for safe dividend investments, offering attractive yields and a demonstrated commitment to returning value to shareholders through dividends.
