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10 High Yield Dividend Kings for 2022

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·10 min read
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In this article, we discuss 10 high yield dividend kings for 2022. If you want to skip our detailed analysis of these stocks, go directly to 5 High Yield Dividend Kings for 2022.

Dividend kings are companies that have consistently increased their dividends for at least 50 years. These companies have withstood periods of inflation, recessions, market crashes, political instability, changing customer trends, and critical technology advancements.

The major indices announced double-digit returns in 2021, once the economy started to recover from the COVID-19 headwinds and pressures in 2020. The Federal Reserve supported the US equity markets by implementing lenient fiscal and monetary policies, and the S&P 500 gained 26.89% in 2021, marking its third consecutive positive year, and the Dow and Nasdaq also clocked in at 18.73% and 21.39% in 2021, respectively.

However, as the Fed tried to cope with the budget deficit in 2020, it started printing more money to fund the government’s excessive spending. This quantitative easing will only result in increasing inflation in the future, and many analysts have stated that dividend stocks are the real hedges against the stock market that is to come in the next few years.

Analysts and successful Wall Street investors have gone on record to state that diversifying portfolios with dividend stocks is the right call in the current stock market. Investors should pick companies that have been known to weather the fiscal and economic turndowns in the past, and have still consistently increased their dividend payments. A company’s management, cash flow position, and the resilience of their balance sheet should be of interest to investors, rather than solely focusing on higher yields. This is why dividend kings are some of the top stock picks of traders with a long-term investment horizon.

Over the years, hedge funds have been bullish on Johnson & Johnson (NYSE:JNJ), Altria Group, Inc. (NYSE:MO), and The Coca-Cola Company (NYSE:KO), given strong company fundamentals and a rich dividend history.

10 High Yield Dividend Kings for 2022
10 High Yield Dividend Kings for 2022

Photo by Vitaly Taranov on Unsplash

Our Methodology

We chose dividend kings with the highest yields to compile this list, ensuring that the companies have growth prospects and positive hedge fund sentiment. We have also mentioned available analyst ratings for each stock.

High Yield Dividend Kings for 2022

10. Johnson & Johnson (NYSE:JNJ)

Dividend Yield as of January 21: 2.57%

Number of Years of Dividend Increases: 59

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) is a New Jersey-based multinational company offering consumer health products, medical devices, and pharmaceutical products worldwide. On November 12, Johnson & Johnson (NYSE:JNJ) announced its intent to separate its Consumer Health business, thus creating a new publicly traded company. The new company would continue to deliver brands like Neutrogena, AVEENO, Tylenol, Listerine, JOHNSON’s, and BAND-AID to consumers.

Johnson & Johnson (NYSE:JNJ) on January 4 declared a $1.06 per share quarterly dividend, in line with previous. The dividend is payable on March 8, to shareholders of record on February 22. As of January 21, the company offers a 2.57% yield, with 59 consecutive years of dividend growth.

Credit Suisse analyst Matt Miksic reiterated an Outperform rating and a $200 price target on Johnson & Johnson (NYSE:JNJ) on December 29.

Among the hedge funds monitored by Insider Monkey’s database of 867 elite funds, 88 funds were bullish on Johnson & Johnson (NYSE:JNJ) in the third quarter of 2021, holding stakes totaling $6.8 billion. Fundsmith LLP is the largest stakeholder of Johnson & Johnson (NYSE:JNJ) as of Q3, with 7.20 million shares worth $1.16 billion.

Distillate Capital mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2021 investor letter. Here is what the firm has to say:

“The largest additions in the rebalance, Johnson & Johnson (NYSE:JNJ) was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”

9. The Coca-Cola Company (NYSE:KO)

Dividend Yield as of January 21: 2.78%

Number of Years of Dividend Increases: 59

Number of Hedge Fund Holders: 61

The Coca-Cola Company (NYSE:KO) is a multinational beverage corporation that supplies non-alcoholic and alcoholic drinks worldwide, with recognized brands including Minute Maid, Dasani, Nestea, Relentless, Sprite, and Fanta, among others. The Coca-Cola Company (NYSE:KO) has a rich history of dividend payments, with the company successively increasing its dividends for 59 years.

The Coca-Cola Company (NYSE:KO) declared a $0.42 per share quarterly dividend on October 27, which was paid on December 15, to shareholders of record on December 1. As of January 21, The Coca-Cola Company (NYSE:KO)’s dividend yield stands at 2.78%.

Laurent Grandet, an analyst from Guggenheim, upgraded The Coca-Cola Company (NYSE:KO) to Buy from Neutral, elevating the price target to $66 from $61. The company is exiting the fiscal 2021 transition year "stronger", the analyst tells investors in a research note, with a "compelling" valuation at current share levels and expected 12% annual earnings growth through fiscal 2023.

In the third quarter of 2021, 61 hedge funds were bullish on The Coca-Cola Company (NYSE:KO), with stakes valued at over $25 billion. Warren Buffett’s Berkshire Hathaway is a long-time stakeholder of The Coca-Cola Company (NYSE:KO), holding 400 million shares, worth approximately $21 billion. Buffett’s fund is the largest stakeholder of the company.

8. National Fuel Gas Company (NYSE:NFG)

Dividend Yield as of January 21: 3.08%

Number of Years of Dividend Increases: 51

Number of Hedge Fund Holders: 19

Headquartered in New York, National Fuel Gas Company (NYSE:NFG) is a diversified energy company that operates in five business segments via its subsidiaries, including Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing.

On December 3, National Fuel Gas Company (NYSE:NFG) declared a quarterly dividend of $0.455 per share, in line with previous. The dividend was paid on January 14, to shareholders on record since December 31. With 51 years of consecutive dividend increases, National Fuel Gas Company (NYSE:NFG) is one of the top high yield dividend kings for 2022.

BofA analyst John Abbott reinstated coverage of National Fuel Gas Company (NYSE:NFG) on January 10 with an Underperform rating and a $66 price target. National Fuel Gas Company (NYSE:NFG)’s position as a diversified energy company with four segments limits it upside, and the analyst has a relative preference for higher beta "oil" names given greater exposure to what he sees as a more constructive outlook versus the U.S. gas sector.

GAMCO Investors holds the largest stake in National Fuel Gas Company (NYSE:NFG) as of Q3 2021, owning 1.26 million shares worth $66.6 million. Overall, 19 hedge funds were bullish on National Fuel Gas Company (NYSE:NFG) at the end of September 2021, up from 12 funds in the prior quarter.

Here is what Heartland Value Fund has to say about National Fuel Gas Company (NYSE:NFG) in its Q1 2021 investor letter:

“The ho-hum Utilities sector isn’t typically a place to hunt for strong growth prospects. However, for investors willing to do their homework, opportunities do exist. Portfolio holding National Fuel Gas Company (NFG) is a prime example.

NFG is a dividend aristocrat—50 consecutive years of dividend increases. Although the business is lumped in with run-of-the-mill power companies, it is much more diverse. In addition to its utility operations, a pipeline and storage division produces almost a quarter of its profits, and the company generates nearly 40% of its bottom line from natural gas exploration and production.

Shares of National Fuel Gas Company (NFG) are trading at a mid-teens discount to their historic average based on price/book. Given the state of the energy industry over the past few years, we believe the company’s gas unit could be an overlooked source of growth. Additionally, the utility recently received regulatory approval on a natural gas pipeline expansion in Pennsylvania, which is expected to produce a windfall in free cash flow.”

7. 3M Company (NYSE:MMM)

Dividend Yield as of January 21: 3.43%

Number of Years of Dividend Increases: 63

Number of Hedge Fund Holders: 46

Headquartered in Minnesota, 3M Company (NYSE:MMM) is an American multinational conglomerate that operates in multiple sectors, focusing on worker safety, healthcare, and consumer goods.

3M Company (NYSE:MMM) on November 9 declared a quarterly dividend of $1.48 per share, in line with previous. The dividend was paid on December 12, to shareholders on record as of November 12. 3M Company (NYSE:MMM) has regularly increased its dividends for 63 years.

On January 11, Bernstein analyst Brendan Luecke initiated coverage of 3M Company (NYSE:MMM) with a Market Perform rating and a $175 price target, citing inflation. 3M Company (NYSE:MMM) stumbled in 2019, and still hasn't recovered, the analyst contends, adding that he does "not lose sleep" over its macro driven topline but is concerned about margins.

According to Insider Monkey’s Q3 database, 46 hedge funds were bullish on 3M Company (NYSE:MMM), with stakes totaling $1.62 billion, as compared to 42 funds in the preceding quarter, holding stakes worth $1.58 billion in 3M Company (NYSE:MMM). Fisher Asset Management is the leading stakeholder of 3M Company (NYSE:MMM) as of Q3 2021, owning 5.60 million shares worth $983.2 million.

Just like Johnson & Johnson (NYSE:JNJ), Altria Group, Inc. (NYSE:MO), and The Coca-Cola Company (NYSE:KO), 3M Company (NYSE:MMM) is a notable dividend king heading into 2022.

6. Federal Realty Investment Trust (NYSE:FRT)

Dividend Yield as of January 21: 3.47%

Number of Years of Dividend Increases: 54

Number of Hedge Fund Holders: 21

Federal Realty Investment Trust (NYSE:FRT) is a real estate investment trust headquartered in Maryland, that holds a number of shopping centers in the Northeastern United States, the Mid-Atlantic states, California, and South Florida.

Federal Realty Investment Trust (NYSE:FRT) offers a dividend yield of 3.47% as of January 21, and has been consistently paying dividends for 54 years. On August 5, Federal Realty Investment Trust (NYSE:FRT) declared a quarterly dividend of $1.07 per share, which is a 0.9% increase from the prior dividend of $1.06. The dividend was paid on October 15.

JPMorgan analyst Michael Mueller on December 20 upgraded Federal Realty Investment Trust (NYSE:FRT) to Overweight from Neutral with a price target of $142, up from $135. According to the analyst, Federal Realty Investment Trust (NYSE:FRT) could post "outsized" funds from operations growth over the next few years relative to the strip center group. Federal Realty Investment Trust (NYSE:FRT)’s portfolio was disproportionately hit during the heights of COVID-19 but has "turned the corner and is recovering".

Among the hedge funds tracked by Insider Monkey, 21 funds were bullish on Federal Realty Investment Trust (NYSE:FRT) in Q3 2021, up from 16 funds in the preceding quarter. Waterfront Capital Partners is the biggest stakeholder of Federal Realty Investment Trust (NYSE:FRT), with 605,515 shares worth $71.4 million.

Federal Realty Investment Trust (NYSE:FRT) has a rich dividend history, just like Johnson & Johnson (NYSE:JNJ), Altria Group, Inc. (NYSE:MO), and The Coca-Cola Company (NYSE:KO).

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Disclosure: None. 10 High Yield Dividend Kings for 2022 is originally published on Insider Monkey.