15 of the Best Dividend Stocks to Buy for 2022

Stocks beat bonds, and these dividend stocks offer reliable yields.

In the short run, the stock market can be extremely volatile. 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 government bonds and bank savings accounts pay a minimal interest rate, it’s hard for these instruments to generate acceptable returns or fund a person’s retirement needs. As such, investors are rightly turning to dividend stocks to fill the income gap. With interest rates now set to rise amid a surge in inflation, however, conditions are changing quickly. Some formerly reliable dividend names are struggling, while new leaders have emerged in sectors such as real estate. Here are 15 of the best dividend stocks to buy for the remainder of 2022.

Unilever PLC (ticker: UL)

Unilever is a U.K.-based global conglomerate in the consumer staples industry. The company produces a wide array of products in categories such as soap, vitamins, pet food, personal care, coffee, tea, cereal and many others.. This elite dividend stock generates about $60 billion a year in revenue from its collection of more than 400 brands. In recent years, Unilever has struggled with a lack of organic growth and pressure on its profit margins. However, activists have now taken an interest in the company and are trying to shake things up. In the meantime, Unilever’s operating results should improve as price hikes help the company respond to the current wave of inflation. For now, shares trade around 20 times earnings and offer a 3.8% dividend.

Clorox Co. (CLX)

Clorox is another consumer staples company and top income stock currently on a downswing. The company enjoyed tremendous sales momentum during the pandemic as the demand for cleaning products surged. Since then, however, sales have rolled over. Meanwhile, inflation has taken a bite out of Clorox as it has had to pay more for raw inputs, labor and logistics. Add it all up, and Clorox’s profits are actually well below pre-pandemic levels at the moment, and the share price has dropped dramatically in sympathy. However, sentiment may be too negative on this blue-chip stock. Over the next year or two, Clorox should be able to stabilize its earnings as price increases start to take effect. Meanwhile earnings comparisons will look much better once the company moves past the pandemic era of increased sales volume. For now, shares offer a 3.1% dividend, which is unusually high for Clorox.

Intel Corp. (INTC)

Investors generally don’t think about technology companies as big dividend payers. However, there are some exceptions. Intel is a cash cow thanks to its large and stable semiconductor business for personal computers and data center machines. While these aren’t huge growth markets, they continue to represent a stable business and have enjoyed a boost from pandemic-related demand. Meanwhile, Intel has used its prodigious profits to move into other, more futuristic fields. One of these, its self-driving unit Mobileye, offers a big catalyst for 2022. Intel will be spinning off the firm as a public company, though it plans to maintain a majority stake. Analysts believe Mobileye may be worth $50 billion or more as a stand-alone entity, generating a huge return on Intel’s $15.3 billion purchase price four years ago. Intel stock was caught up in the recent tech sell-off, and its shares are down 13.2% in 2022 as of market close on Feb. 22, pushing its dividend yield up to 3.3%.

Citigroup Inc. (C)

Entering 2022, some market-watchers believed it was too late to buy the major American banks. After all, banks have recovered their pandemic losses already, and the market has been pricing in rate hikes for months now. The trade may have seemed played out, but some of the banks have really pulled back off their highs. Citigroup, for example, has slid from $80 last summer to about $64 as of Feb. 22, putting the stock squarely back in the value zone. Shares are trading for less than eight times both trailing and forward earnings. Citigroup is also at just 0.7 times book value; that’s an incredible discount to book for such a powerful global banking franchise as Citi. With the recent price decline, the dividend yield is now up to 3.2%, good enough to make it one of the best dividend stocks to buy now.

Prudential Financial Inc. (PRU)

Insurance is another industry enjoying the rise in interest rates. After many years of sideways trading action, Prudential Financial could finally be set to break out. The life insurance company should be one of the big beneficiaries of interest rate hikes. Insurance companies make their money from investing customers’ policy premiums in financial assets. The bond side of that mix has generated underwhelming returns in recent years thanks to rock-bottom rates. With bonds generating less interest than a historical model would have suggested, this has trimmed profitability. However, as rates run up, this should allow Prudential to earn a more reasonable spread on its investments. Right now, shares are selling for just 0.7 times book value as investors still doubt whether things will improve. That creates the opportunity to buy Prudential shares at a 4.3% dividend yield and at less than nine times forward earnings.

First American Financial Corp. (FAF)

First American Financial is America’s second-largest title insurance company. This is an essential service that homeowners usually must purchase to get a mortgage in the U.S. First American’s fortunes are closely tied to that of the housing market. Now, with a ton of rate hikes on the way, investors are selling off many companies related to the housing industry. In the case of First American, however, that might be a mistake. Shares are trading at just six times trailing earnings. Even modeling in a sharp decline in housing market activity going forward, the stock still sells for just nine times estimated 2022 earnings. In addition, the firm’s growing realty software and digital services arm helps offset any potential weakness in the core title insurance operations. And now, with the recent stock price decline, shares are yielding 3.1% to boot.

VF Corp. (VFC)

VF Corp. is a clothing and footwear company known for brands such as Vans, The North Face and Timberland. The company is also a dividend aristocrat, meaning that it has increased its dividend for more than 25 consecutive years. That’s rather impressive for a company in a cyclical and fast-moving industry such as apparel. 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% in the last six months. That has pushed the stock’s dividend yield up to 3.4%.

Gilead Sciences Inc. (GILD)

Biotech giant Gilead Sciences has seen its shares tumble about 15% to start 2022. With that drop, Gilead is now approaching its lowest share price since 2013. Pharmaceutical stock investors should be putting GILD stock on their radars, as shares are once again selling for less than 10 times forward earnings. The core issue with Gilead is that its primary hepatitis C franchise has seen declining sales, as much of the patient population has already been cured of the disease. Gilead has developed and acquired new drugs to offset those declines, but it’s been a long-term process to augment that revenue stream. Gilead has also been active in the COVID-19 therapeutics space, and has thus sold off as traders have lost interest in that theme lately. Analysts see the company returning to earnings growth in 2023, however, and in the meantime, shares now offer a strong 4.8% dividend yield.

Suncor Energy Inc. (SU)

Energy stocks are often a good place to go looking for dividends. That’s especially true now as the price of oil has advanced to levels not seen since 2014. The ongoing geopolitical chaos in Eastern Europe is providing further support for the price of energy products at the moment. Against that backdrop, large, low-cost oil producers are a refuge in this choppy market. Suncor, for example, is Canada’s largest integrated energy company. Its crown jewels are its low-cost oil sands projects primarily in the province of Alberta. These assets have lengthy lifespans lasting decades, and thus provide stable and reliable energy supplies. As the price of oil has surged, Suncor has strengthened its balance sheet and also raised its dividend. Shares currently yield 4.6%, and the stock is selling for less than nine times forward earnings.

Ambev SA (ABEV)

Brazilian brewing company Ambev is an interesting way to benefit from the current commodities boom while enjoying a refreshing 3.7% dividend. Ambev is a subsidiary of global brewing giant Anheuser Busch Inbev SA (BUD). Ambev primarily operates in Brazil and other South American markets. Thus, it stands to benefit from economic expansion in that region. Brazil is a major producer of oil, iron ore, meat, coffee, soybeans and other such commodities that are surging in price as of late. This should cause significant economic growth in Brazil, which will give consumers more disposable cash with which to buy beer. Plus, the World Cup is coming up, and that should be a major drinking occasion in key Ambev markets such as Brazil and Argentina. As things stand today, the stock is around 20 times forward earnings, and revenues surged nearly 30% last year as the company recovered from the pandemic-driven slowdown.

CubeSmart (CUBE)

Self-storage operator CubeSmart is a smart way to profit from the rise in inflation. Self-storage is a good asset class to own during inflation. Most storage units are rented on a month-to-month basis, and operators can raise prices quickly to adjust to changing market conditions. In addition, these business 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, tend to fare well during inflation since they leverage their balance sheets heavily to fund their property purchases. 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 CUBE stock in current market conditions. At the moment, shares yield a healthy 3.6%.

Realty Income Corp. (O)

Realty Income is another REIT that stands out in the current environment. For one thing, it pays its dividend monthly, which makes for a steady income stream. Meanwhile, the current 4.5% dividend yield is generous in today’s market. Realty Income is a triple net lease company focusing on industrial and retail uses. Top tenants include the likes of 7-Eleven, Walgreens Boots Alliance Inc. (WBA) and FedEx Corp. (FDX). The company has largely avoided the e-commerce effect that has hammered malls. Realty Income’s properties tend to be single free-standing buildings, which are much easier to lease and have tenants like Walgreens that are more resistant to the pressures of online shopping. 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.

American Tower Corp. (AMT)

Many REITs are in the sweet spot given current macroeconomic conditions. American Tower is another such winner. The company owns and operates more than 200,000 cellphone towers throughout the U.S. and internationally. While the market for towers is already largely built out in the U.S., American Tower continues to grow rapidly in emerging markets. American Tower shares have sold off 25% from their 52-week highs, perhaps because AMT is involved in communications and thus might be viewed as having tech exposure. The company’s business is extremely simple in terms of operating towers and leasing them out to the telecom companies. There are automatic rent increases built in to help offset inflation. American Tower yields 2.4% today, which isn’t the highest on this list. However, it has grown its dividend at a stunning 19% per year compounded over the past five years.

Grupo Aval Acciones y Valores SA (AVAL)

For another monthly dividend option, there’s Colombia’s Grupo Aval. The holding company controls stakes in four of Colombia’s leading banks, along with a Central American banking franchise and other Colombian subsidiaries involved in infrastructure and concession assets such as toll roads. Colombia’s economy went into a slump along with oil, which is its key export. With oil now approaching $100 per barrel, however, Colombia’s economy has come roaring back to life. Aval remains down about 30% from pre-pandemic levels, despite the company announcing record quarterly profits in late 2021. The company pays a monthly dividend of roughly 2.5 cents per share, which works out to nearly 30 cents per year, or a 5.2% dividend yield.

South Jersey Industries Inc. (SJI)

South Jersey Industries is the final pick on the list of the best dividend stocks to buy for 2022. South Jersey primarily operates two natural gas utilities in New Jersey. One covers the southern part of the state, as the name would suggest. The other focuses on New York City suburbs. South Jersey is a slow-moving enterprise. Given New Jersey’s relatively subdued population growth, South Jersey isn’t ever going to post massive revenue growth numbers. That’s probably fine with most income investors, however. South Jersey trades at less than 14 times forward earnings and offers a 5.3% dividend yield. With the stock down about 10% year to date, this could be an attractive entry point for income investors seeking a solid defensive holding.

15 of the best dividend stocks to buy for 2022:

— Unilever PLC (UL)

— Clorox Co. (CLX)

— Intel Corp. (INTC)

— Citigroup Inc. (C)

— Prudential Financial Inc. (PRU)

— First American Financial Corp. (FAF)

— VF Corp. (VFC)

— Gilead Sciences Inc. (GILD)

— Suncor Energy Inc. (SU)

— Ambev SA (ABEV)

— CubeSmart (CUBE)