Stocks can be volatile, and 2022 has served up a great reminder of that so far. Over the longer term, however, it's clear that stocks outperform other financial assets like bonds and cash.
That's particularly true in a low interest rate environment, when yields are depressed. But that could be changing; the Federal Reserve seems poised to raise interest rates quickly. As rates rise alongside a historic surge in inflation, economic conditions are changing quickly.
Some formerly reliable dividend names are struggling, while new leaders have emerged in sectors such as real estate. Investors should pick their dividend stocks carefully given the changing market environment. Here are 15 of the best dividend stocks to buy for the remainder of 2022.
Exxon Mobil Corp.
- Dividend yield: 4%
Exxon Mobil (
Now that boom times are back, Exxon has resumed its dividend hikes while also paying down debt and focusing on future investment opportunities. Admittedly, the stock has already rallied dramatically over the past year. Despite the surge, shares still yield 4% and are on sale for about 10 times forward earnings. That's not a bad deal for such a solid blue-chip stock as this one.
Suncor Energy Inc.
- Dividend yield: 4%
Energy has returned to form as one of the best places to go looking for dividends. With oil topping $100 per barrel again, there are a lot of intriguing dividends on offer in the energy space. Some investors might wonder if the sector has run too far, too fast, however, and if it's at risk of a quick sell-off.
Against that backdrop, large, low-cost oil producers should be a refuge regardless of short-term moves in the price of oil and gas. Suncor (
As the price of oil has surged, Suncor has strengthened its balance sheet and has raised its dividend. Shares currently yield 4%, and the stock is selling for less than 7 times forward earnings.
Wells Fargo & Co.
- Dividend yield: 2%
Wells Fargo (
Still, investors don't seem to have forgiven the bank for its past sins; Wells Fargo's stock trades at a much lower multiple than it used to compared to its peers. This should change going forward, however, as the bank is aggressively cutting costs and buying back stock. Both of these factors should lead to substantial earnings increases over the next two to three years.
Wells Fargo doesn't have a particularly high dividend today at just more than 2%, but it should grow its dividend rapidly over the next couple of years as its profit growth accelerates.
- Dividend yield: 3.9%
Meanwhile, with the recent sell-off, Citigroup shares are once again selling at bargain bin prices relative to other big banks. There simply isn't a good reason for this. The company's operational metrics are way up over the past three years, as the bank is doing a much better job of turning its top-line interest income into bottom-line profits. Shares are going for just 7 times forward earnings and provide a 3.9% dividend yield.
- Dividend yield: 4.1%
Whirlpool stock initially rallied sharply as traders factored in Whirlpool's record profits into their outlooks for the company going forward. Over the past year, however, Whirlpool stock has fallen by more than 25% through April 18, as analysts fear a decline in business once the housing boom ends. That may well happen, but Whirlpool stock is now only marginally above where it traded in 2019. That makes little sense because the company's huge profits of the last two years didn't hurt its long-term prospects.
In any case, shares are at just 7 times forward earnings. The company just hiked its dividend payout by 25% in February, and the stock now yields 4.1%.
- Dividend yield: 3.6%
Big institutions such as pension funds have long needed a way to invest in non-listed assets such as real estate, private equity, venture capital and hedge funds. Blackstone provides these products to institutional investors and earns healthy fees for doing so.
The business is a cyclical one, as it is tied to the ups and downs of various financial markets. Investors are clearly worried about a down cycle, and the potential impact of higher interest rates on the business.
In due time, however, Blackstone should resume its upward trajectory. Meanwhile, with shares down more than 20% from their recent peak, the dividend yield has now risen to 3.6%.
Pinnacle West Capital Corp.
- Dividend yield: 4.4%
Utility stocks have rallied sharply over the past six months. With investors moving into defensive stocks, power, gas and water utilities have become favorite safe haven asset categories. This has driven down yields on many of these stocks to less compelling levels.
However, there's at least one cheap utility left. That would be Pinnacle West (
Over the long term, Pinnacle West should enjoy favorable demographic drivers. Utility earnings tend to follow population growth, and Arizona is one of the fastest-growing states in the country, thanks to its favorable weather and taxation levels. PNW pays a 4.4% dividend.
Banco Latinoamericano de Comercio Exterior SA
- Dividend yield: 6.7%
Banco Latinoamericano de Comercio Exterio (
The bank's main offices are in Panama, which is logical as it is a free trade hub and home of the Panama Canal. Its board of directors is full of various heads of central banks around Latin America, and the bank exists in large part to promote the free flow of commercial goods around the region.
Due to its short-term loans and central banking ties, Bladex has been remarkably stable over the years. That said, recent earnings results were muted with most of Latin America in a slump.
With commodity prices now through the roof, however, Bladex's loan demand should surge. In the meantime, Bladex pays out most of its earnings as a dividend and currently yields 6.7%.
Honda Motor Co. Ltd.
- Dividend yield: 5.4%
Turning from Latin America to Japan, Honda (
However, given the recent sharp sell-off in Honda's stock price, shares now yield 5.4%. There are two reasons for the decline. The supply chain shortage has hurt most motor vehicle companies dramatically. And Japanese companies in particular are under pressure after one of the sharpest drops in the value of the Japanese yen in decades.
For people buying Japanese stocks, however, the slumping yen makes for bargain-priced opportunities, as dollars go further when buying Japanese stocks listed on U.S. exchanges.
Supply chain problems will clear up sooner or later for Honda. Meanwhile, the stock is going for just seven times earnings.
- Dividend yield: 3.2%
Self-storage operator CubeSmart (
In addition, these businesses don't typically require much staff to operate, meaning that inflation's impact on labor costs is modest. More broadly, real estate investment trusts, or REITs, are advantaged in a rising interest rate environment because they carry a lot of debt on their balance sheets.
As inflation takes hold, the value of said properties increases, while the debt burden is inflated away. This is a win-win for owners of storage REITs such as CubeSmart in current market conditions. At the moment, shares yield a reasonable 3.2%.
Realty Income Corp.
- Dividend yield: 4.1%
Realty Income (
Realty Income is a triple-net-lease REIT focusing on industrial and retail properties. Top tenants include firms such as 7-Eleven, Walgreens Boots Alliance Inc. (
Due to Realty Income's large size, it can obtain cheap capital to purchase more properties and further grow its business. And, like CubeSmart, Realty Income should benefit from rising inflation.
Washington Trust Bancorp Inc.
- Dividend yield: 4.4%
Investors generally think of big banks for dividends. However, in many cases, smaller regional banks are often more stable than the national titans.
For example, Rhode Island-based Washington Trust Bancorp (
The bank's conservative nature has served it well and has positioned it for decades of future success. In fact, during the 2008 financial crisis, Washington Trust was able to take market share locally, as it still had excess reserves to lend while the bigger banks had to cut back their operations. Washington Trust shares currently offer a generous 4.4% yield.
Southern Copper Corp.
- Dividend yield: 5.5%
Southern Copper (
It's not just an economic reopening story, either. The move to renewable energy will require mountains of copper, as it's a key ingredient in things such as batteries, wind turbines and solar panels. Southern Copper is one mining firm that can take advantage of the bull market in the metal. Its stock currently offers a 5.5% dividend yield.
- Dividend yield: 3.6%
VF Corp. (
VF Corp. has been able to pull it off since it acquires its brands on the cheap and then transforms them under its ownership. For example, it bought both Vans and The North Face for pennies on the dollar compared to what they're worth today.
Like many companies, VF Corp. is having issues with inflation and its supply chain at the moment. However, that's more than reflected in the price, as shares are down more than 20% over the last six months. That has pushed the stock's dividend yield up to 3.6%.
Seagate Technology Holdings PLC
- Dividend yield: 3.4%
Valuations on memory stocks have been generally depressed in recent years, as analysts didn't see much growth ahead. However, the industry surprised to the upside over the past two years as tech spending picked up, and that showed how storage is still a cash cow industry.
Over the past few months, Seagate stock has slid off its highs. This puts the stock back in the bargain range, as it sells for about 8 times forward earnings and offers a 3.4% dividend yield.
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