- Highest-yielding dividend stocks like these typically offer a safe haven during market turbulence.
- Altria (MO): Tobacco products are more resilient to recessions and better insulated from inflationary pressures.
- Cardinal Health (CAH): Saw a 17% increase in its pharmaceutical segment revenue.
- Chevron (CVX): Offers a secure way to profit from rising oil and gas prices.
- Kimberly-Clark (KMB): Reported a record 10% increase in organic sales despite a 6% increase in prices.
- Lumen Technologies (LUMN): Generates an impressive 8.4% dividend yield with a 48% payout ratio.
- Magellan Midstream Partners (MMP): Offers a whopping 8.2% dividend yield.
- Medical Properties Trust (MPW): Deserves readers’ attention with a 6.3% yield after the 4% quarterly dividend hike.
In times of increased volatility, highest-yielding dividend stocks mean stability and consistent passive income for long-term portfolios. Multiple studies have highlighted that over time, dividend shares outpace stocks that don’t pay dividends by a wide margin.
According to J.P. Morgan (NYSE:JPM), stocks that have initiated dividends and raised their payouts over four decades between 1972 and 2012 returned on average 9.5% annually. For those shares that had no dividends, the return was 1.6%.
I want to remind our readers that dividend stocks returned 1.8% even when the Dotcom Bubble burst in 2000, a year when broader indices performed poorly. Wall Street concurs that companies that can commit to stable and high payouts are often well-established names with solid fundamentals. Therefore, passive income seekers tend to keep those names in their portfolios even when markets turn south.
With that information, here is our list of the seven highest-yielding dividend stocks that offer investors a proven way to tap into significant yields.
|MMP||Magellan Midstream Partners||$48.46|
|MPW||Medical Properties Trust||$18.15|
52-week range: $42.53 – $57.05
In late April, Altria reported first-quarter results. Revenue declined 2.4% year-over-year (YOY) to $5.9 billion, mainly due to the sale of its wine business in October 2021. Yet, adjusted diluted earnings per share (EPS) increased 4.7% YOY to $1.12.
Altria has been able to raise the prices of its smokable products, compensating for declining sales volume. As a result, despite a 5.8% YOY decline in Marlboro sales volume, Q1 operating income in the smokeable products segment jumped almost 8% YOY to $2.56 billion.
MO stock has appreciated more than 10% year-to-date (YTD). Meanwhile, Altria is a “Dividend King” that currently generates a lucrative yield of 6.65%.
Shares are trading at 11 times forward earnings and 4.6 times sales. The 12-month median price forecast for Altria stock stands at $57.
Cardinal Health (CAH)
52-week range: $45.85 – $64.53
Cardinal Health (NYSE:CAH) is a leading manufacturer and distributor of pharmaceuticals and medical products. As the third-largest logistics provider worldwide, it serves 3.4 million patients through roughly 60,000 pharmacies, 10,000 specialty care facilities, and 90% of U.S. hospitals.
The healthcare company reported third-quarter metrics in early May. Revenue grew 14% YOY to $44.8 billion. However, adjusted diluted earnings per share declined 5% YOY to $1.45. Cash and equivalents ended the period at $2.36 billion.
Revenue for the pharmaceutical segment increased 17% YOY to $41 billion, driven by branded pharmaceutical sales growth. But profits fell 5% due to higher operational expenses.
CAH stock has risen 7% YTD. This “Dividend Aristocrat” (a title referring to the highest yielding dividend stocks who have consistently yielded dividends for at least the past 25 years) has increased payments for 35 consecutive years. It currently generates a 3.5% dividend yield and supports a payout ratio of just 34%.
Shares are trading at 10 times forward earnings and 0.09 times sales. At present, the 12-month median price forecast for Cardinal Healthcare stock is at $56.
52-week range: $92.86 – $175.65
The next stock on our list is the oil supermajor Chevron (NYSE:CVX), the second largest energy company in the U.S. Alongside drilling and exploration operations, Chevron also has midstream and downstream assets. Thus the energy group has a buffer when crude and natural gas prices fall.
Chevron company released Q1 results on April 29. Revenue increased 68% YOY to $52 billion. Adjusted earnings came in at $3.36 per diluted share, up from 90 cents a year ago. Free cash flow during the quarter stood at $6.1 billion.
Wall Street concurs that Chevron is possibly one of the safest bets to profit from rising oil and gas prices. In fact, CVX stock has surged higher 40% YTD.
This Dividend Aristocrat currently supports a 3.3% dividend yield. Moreover, Chevron is expected to repurchase $10 billion worth of stock by the end of 2022.
Shares are trading at 12 times forward earnings and 1.8 times sales. The 12-month median price forecast for Chevron stands at $183.
52-week range: $117.32 – $145.79
Revenue increased 7% YOY to $5.1 billion. However, adjusted EPS was $1.35, down 25 % from $1.80 in the prior-year quarter. Cash and equivalents ended the period at $493 million.
Kimberly-Clark delivered a record 10% increase in organic sales in the first quarter. Investors were pleased that the group increased sales volumes despite passing along a 6% increase in prices. However, profitability declined due to rising input and transportation expenses. In 2022, management sees organic sales rising by 4% to 6%.
So far this year, KMB stock has dropped about 8%, and generates a 3.35% dividend yield. At present, shares are trading at 24.1 times forward earnings and 2.4 times sales. Meanwhile, the 12-month median price forecast for Kimberly-Clark stock is at $131.
Lumen Technologies (LUMN)
52-week range: $9.31 – $15.45
The next stock on our list is Lumen Technologies (NYSE:LUMN), a telecommunications company that provides an integrated platform for enterprises and consumers worldwide. The platform offers voice and data connections, cloud connectivity, co-location and data center services, and security solutions.
Lumen released Q1 results on May 4. Revenue declined 8% YOY to $4.68 billion. Adjusted EPS stood at 63 cents, up from 44 cents per share in the prior-year period. The company generated a free cash flow of $846 million. Cash and equivalents ended the period at $366 million.
Management accelerated investments in fiber optics, multi-gig services, and other architectures as it positions for growth in gaming, virtual reality, work, and other high-bandwidth services.
LUMN stock generates an impressive 8.4% dividend yield, this puts it at the top of the list of the highest-yielding dividend stocks covered in this article.
In 2022, LUMN stock has lost more than 10%. Shares look undervalued at 7.1 times forward earnings and just 0.6 times sales. The 12-month median price forecast for Lumen Technologies stock stands at $10.50.
Magellan Midstream Partners (MMP)
52-week range: $43.58 – $53.85
Magellan Midstream Partners (NYSE:MMP) is a master limited partnership (MLP) that operates pipelines and storage terminals in the U.S. Its portfolio of assets includes the longest pipeline system of refined products stateside as well as several crude oil pipelines.
This MLP mainly operates a fee-based business. Midstream assets that handle refined products account for roughly 75% of its business.
On May 5, Magellan released Q1 results. Revenue increased 7% YOY to $674.7 million. Net income declined to 78 cents per diluted share, down from 99 cents a year ago. The MLP generated a free cash flow of $239.5 million during the quarter.
So far this year, MMP stock has appreciated over 6%. Currently, the stock generates an impressive 8.2% dividend yield. Readers would be interested to know that less than 10% of operating income is sensitive to energy prices, minimizing commodity risks.
Shares are trading at 11.1 times forward earnings and 3.8 times sales. At present, the 12-month median price forecast for Magellan Midstream Partners stock is at $54.
Medical Properties Trust (MPW)
52-week range: $17.38 – $24.13
Our final highest-yielding dividend stock, Medical Properties Trust (NYSE:MPW), is a real estate investment trust (REIT) that operates various healthcare facilities worldwide. The company is the second-largest owner of hospital beds in the U.S., with 440 properties in the U.S. and nine countries.
The REIT released Q1 results on April 28. Revenue increased 13% YOY to almost $410 million. Funds from operations increased 12% to 47 cents per diluted share, up from 42 cents in the prior-year quarter.
Medical Properties Trust generates predictable recurring revenue. Its contracts usually include annual rental rate increases as a hedge against inflation.
Yet, so far in 2022, MPW stock has declined by almost 23%. The healthcare REIT raised its quarterly dividend by 4% to 29 cents per share. As a result, MPW stock currently supports a generous 6.3% yield.
Shares are trading at 9.9 times forward earnings and 6.8 times sales. Finally, the 12-month median price forecast for Medical Properties Trust stands at $23.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.