With many experts continuing to see tough times ahead for the stock market, it may be time to look at dividend stocks for the rest of 2022.
Dividend stocks are a way to diversify a portfolio that may be chasing growth a little too obsessively. They generate income in good times, in bad times and, especially important today, in times of high inflation. (US consumer prices rose 8.5% in July from a year ago.)
They also tend to outperform the S&P 500 over the long term.
A major portfolio that is heavy on dividend stocks is owned by The Bill & Melinda Gates Foundation Trust. With the trust being used to pay for so many initiatives, income must continue to flow into it.
Dividend stocks help do that.
Here are three dividend stocks that take up significant space in the institution’s holdings.
Waste Management (WM)
It’s not the most glamorous industry, but waste management is essential.
No matter what happens to the economy, municipalities have no choice but to pay companies to get rid of our mountains of trash, even if that cost increases.
As one of the biggest players in the space, Waste Management remains firmly established.
Shares have more than doubled over the past five years. And management is projecting 10% revenue growth for the year.
Currently yielding 1.5%, Waste Management’s dividend has increased for 19 consecutive years.
The company has paid out nearly $1 billion in dividends over the past year and about $2.5 billion in free cash flow for 2021 means investors don’t have to worry about receiving their checks.
As a company whose fortunes typically follow that of the broader economy — it will when your equipment is firmly on construction sites around the world — Caterpillar is in an interesting position post-pandemic.
The company’s revenue is feeling the effects of a crippled global supply chain, but historically low interest rates and President Joe Biden’s recently passed $1.2 trillion infrastructure bill mean there could be some serious building in the U.S. in the near future.
Caterpillar’s mining and energy businesses also provide exposure to commodities, which tend to do well during periods of high inflation.
The company’s stock has driven commodity and oil prices up more than 55% over the past five years.
After announcing an 8% increase in June, Caterpillar’s quarterly dividend is currently $1.20 per share, yielding 2.5%. The company has increased its annual dividend for 28 consecutive years.
With groceries seen as a core business, Walmart has managed to keep more than 4,700 of its US stores open throughout the pandemic.
Not only has the company grown both profits and market share since COVID swept across the planet, but its reputation as a low-cost haven makes Walmart appealing to many consumers when prices rise.
Walmart has consistently increased its dividends for the past 49 years. Its annual payout is currently $2.24 per share, which translates to a dividend yield of 1.6%.
Walmart is currently trading at $136 a share, well off its 52-week high of $160.77 hit in April.
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This article provides information only and should not be construed as advice. Provided without warranty of any kind.