Investors love dividend stocks. Not only do they provide dependable income, but they also give investors a great opportunity for solid total return. Total return includes interest, capital gains, dividends and distributions realized over time. In other words, the total return on an investment or a portfolio includes both income and stock appreciation.
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The first quarter was the first down quarter in the markets since 2020. Truth is, the “buy-the-dip” retail crowd cannot save the market every time there is a sell-off. While both the Nasdaq and the Russell 2000 traded into bear market territory and came back in a big way, we could be headed back down, and headed down hard. With inflation hammering away at working Americans, gas prices above $6 a gallon in California and interest rates rising, stocks that pay big dividends may be just the answer for the rest of 2022, and perhaps beyond, as the near-term looks very shaky.
The following five top stocks are rated Buy and come with 5% and higher dividends. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Altria
This maker of tobacco products offers value investors a great entry point now and was hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.
Note that the company has increased its dividend for 52 consecutive years. Shareholders now receive a 6.83% dividend. Jefferies has a $58 target on Altria stock. The consensus price target of $48.87 is less than the most recent close at $52.64 a share.
24/7 Wall St.Foot Locker
Shares of this athletic shoe retailer have rallied from lows and look ready to move higher. Foot Locker Inc. (NYSE: FL) engages in the retail of athletic footwear, apparel, accessories, equipment and team licensed merchandise under the Foot Locker, Lady Foot Locker, Kids Foot Locker, Champs Sports and other brand names.
As of January 29, 2022, it operated 2,858 retail stores in 28 countries, including the United States, Canada, Australia and New Zealand, as well as 142 franchised Foot Locker stores located in the Middle East and Asia. The company also offers its products through various e-commerce sites and mobile apps.
Shareholders receive a 5.36% dividend. The $61 Jefferies price target is well above the $34.80 consensus target. Foot Locker stock closed at $29.61 on Tuesday.
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IBM
This blue-chip giant is still offering investors a very solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions.
The company integrates its hardware products with its software and services offerings in order to provide high-value solutions. Analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward.
The company posted a very solid fourth quarter. The cloud proved to be big in the earnings reports, as did Red Hat, the software giant the firm bought in 2019. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation and industry expertise and sales leadership in more than 175 countries.
IBM stock investors receive a 5.04% dividend. The Jefferies price target is $165, while the consensus target is $143.47. Tuesday’s closing print was $128.89 per share.
24/7 Wall St.Kinder Morgan
This top energy stock remains a favorite across Wall Street. Kinder Morgan Inc. (NYSE: KMI) operates as an energy infrastructure company in North America. The company operates through the following segments.
The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipelines and underground storage systems; natural gas gathering systems and natural gas processing and treating facilities; NGLs fractionation facilities and transportation systems; and liquefied natural gas (LNG) liquefaction and storage facilities.
The Products Pipelines segment owns and operates refined petroleum products and crude oil and condensate pipelines, as well as associated product terminals and petroleum pipeline transmix facilities.
The Terminals segment owns or operates liquids and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals and petroleum coke. It also owns tankers.
The CO2 segment produces, transports and markets CO2 to recover and produce crude oil from mature oil fields, and it owns interests in or operates oil fields and gasoline processing plants, as well as operates a crude oil pipeline system in West Texas. It owns and operates approximately 83,000 miles of pipelines and 144 terminals.
Shareholders receive a 5.62% dividend. Mizuho has set a $21 target price. The consensus target for Kinder Morgan stock is $17.95, and Tuesday’s closing share price was $18.92.
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Williams Companies
This is another top energy company and a solid pick for investors who are more conservative and looking for exposure to LNG. Williams Companies Inc. (NYSE: WMB) operates as an energy infrastructure company primarily in the United States.
Its Transmission & Gulf of Mexico segment comprises Transco and Northwest natural gas pipelines, as well as natural gas gathering and processing, and crude oil production handling and transportation assets in the Gulf Coast region. The Northeast G&P segment engages in the midstream gathering, processing and fractionation activities in the Marcellus Shale region, primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio.
The West segment comprises gas gathering, processing and treating operations in the Rocky Mountain region of Colorado and Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of South Texas, the Haynesville Shale region of northwest Louisiana and the Mid-Continent region, which includes the Anadarko, Arkom, and Permian basins. It also includes NGL and natural gas marketing operations, as well as storage facilities.
The company owns and operates 30,000 miles of pipelines, 34 processing facilities, nine fractionation facilities and approximately 23 million barrels of NGL storage capacity.
Shareholders receive a 5.04% dividend. The target price for Williams Companies stock at Raymond James is $36, and the firm’s rating is Strong Buy. The consensus target is $33.14, and shares closed on Tuesday at $32.98 apiece.
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