Best Dividend Paying Stock 2022
With the stock markets posting their worst performance since the Great Recession of 2008, the potential for a worldwide economic downturn is growing. Ned Davis Research claims that as of right now, there is a 98.1 percent risk of a global recession. Bloomberg claims that the only previous time the probability model produced comparable findings was during the 2008-2009 global financial crisis.
Due to the present economic climate, investors are looking at alternative investment techniques to reduce risk.
To
supplement their income, investors are increasingly drawn to dividend equities.
Experts from all around the globe agree that dividend stocks are an effective
tool for weathering the present economic uncertainty.
In an interview with CNN this past September, Titleist Asset Management co-chief investment manager Austin Graff expressed optimism about dividend investing. He said that the fundamentals and balance sheets of firms that pay dividends are so solid that their stock prices rise during periods of inflation.
He said that
dividend firms with a track record of consistent dividend increases are the
best bet for investors because they can count on consistent free cash flow
creation to cover their dividend payments.
Our
Methodology
As
of September 30, the share values of the companies discussed here are less than
$50. Compared to other investment alternatives, the track records of these
firms' dividend growth and the strength of their balance sheets make them safe
bets throughout the present economic downturn. Stocks are listed in ascending
order from lowest share price to highest.
1. Star
Group, L.P. (NYSE: SGU)
Share
Price as of September 30: $8.25
American
company Star Group, L.P. offers comprehensive energy services and focuses on
the HVAC market for residential and commercial customers. The company's fiscal
Q3 2022 sales were $440 million, an increase of 55% compared to the same
quarter in the prior fiscal year. During the period under review, the business
generated $74 million in operational cash flow and over $70 million in free
cash flow.
Since 1996, investors of Star Group, L.P. (NYSE: SGU) have received dividend payments. The firm has increased its dividend payment every year for the last nine, with a compound annual growth rate (CAGR) of 6.78% during the past five years. The dividend yield for this stock as of September 30 was 7.39 percent.
Star
Group, L.P. (NYSE: SGU) is on the minds of investors owing to its high dividend
credentials, among some of the greatest dividend stocks such as The Coca-Cola
Company (NYSE: K.O.), Exxon Mobil Corporation (NYSE: XOM), and Johnson &
Johnson (NYSE: JNJ).
2. Kennedy-Wilson
Holdings, Inc. (NYSE: K.W.)
Share
Price as of September 30: $15.34
California-based
real estate brokerage and management firm Kennedy-Wilson Holdings, Inc. targets
underpriced commercial, multifamily, and residential properties in dynamic
areas for expansion. The firm maintained its quarterly dividend of $0.24 per
share, which it announced on August 3. For the last decade, the corporation has
held a pattern of annual dividend increases. The dividend yield for the company
was 6.26 percent as of September 30.
While
Kennedy-Wilson Holdings, Inc. (NYSE: K.W.) fell short on several fronts in the
second quarter of 2022, its sales of $136 million represented a 25.6%
year-over-year increase. Cash flow from operations was $37.4 million, while
free cash flow was $4.3 million. Cash and equivalents amounted to $460.6
million at the quarter's conclusion for business.
German
investment bank Deutsche Bank reaffirmed its September Buy rating and $21 price
target on Kennedy-Wilson Holdings, Inc. (NYSE: K.W.), citing its expanding
sales and solid fundamentals.
3. KeyCorp
(NYSE: KEY)
Share
Price as of September 30: $16.03
Ohio-based
KeyCorp offers investment management, financing, credit cards, and other
consulting services. Wedbush began covering the stock in September, issuing an
initial Neutral rating and setting a price target at $18. The company said it
is well on its way to expanding to the levels it has set its sights on in a few
key areas.
Results
for KeyCorp (NYSE: KEY) were excellent in the second quarter of 2022. The GAAP
EPS of $0.54 and the revenue of $1.8 billion produced by the corporation were
better than expected by $0.03 and $30 million, respectively. Strong loan growth
across commercial and consumer enterprises contributed to a 6% increase in
revenue for the quarter compared to the same time in the prior year.
For
the last 11 years, KeyCorp (NYSE: KEY) has maintained a steady dividend growth
pattern. The firm is one of the finest dividend stocks under $50 because of its
16.72% dividend CAGR over the previous five years. As of September 30, the
dividend yield was 4.86%, and the latest quarterly dividend payment was $0.195
per share.
Towards
the end of the second quarter of 2022, 37 of the 38 hedge funds tracked by
Insider Monkey owned shares in KeyCorp (NYSE: KEY). The aggregate value of
these holdings is nearly $338.4 million. In Q2, Adage Capital Management made
the largest investment in the firm, with holdings worth approximately $77
million.
4. Sierra
Bancorp (NASDAQ: BSRR)
Share
Price as of September 30: $20.05
Bank
holding firm Sierra Bancorp (NASDAQ: BSRR), headquartered in California, offers
retail and commercial banking services to consumers and businesses. Insider
Monkey reports that at the end of the second quarter of 2022, six instead of
three hedge funds had shares of the firm in their portfolios. Assets worth over
$9.6 million held by these hedge firms are in danger.
Sierra
Bancorp (NASDAQ: BSRR) reported sales of $37.02 million in Q2 2022, up 20.1%
yearly. The company's financial position remained unchanged throughout the
quarter, with $5 million in operational cash flow and $4.6 million in free cash
flow. It had total assets of $2.28 billion as of June, including cash and cash
equivalents of $161.8 million.
A
quarterly dividend of $0.23 per share was issued on July 22 by Sierra Bancorp
(NASDAQ: BSRR), marking the 94th consecutive quarterly dividend for the firm.
After nine years of uninterrupted dividend increases, this stock has shown to
be among the best in its class for investors looking to maximize their returns
on investments of less than $50. The dividend yield of the shares as of
September 30 was 4.96%.
5. Ames
National Corporation (NASDAQ: ATLO)
Share
Price as of September 30: $22.14
American
financial services provider Ames National Corporation (NASDAQ: ATLO) operates
as a bank holding company. Assets under management increased to $2.1 billion at
the end of June 2022, up from $2 billion at the end of the previous year. More
than $74.6 million was in cash and equivalents, while over $5.1 million was in
other assets. In addition, operational cash flow for the year was $4.2 million,
and free cash flow for the year was $3.
After
the third quarter, investors in Ames National Corporation (NASDAQ: ATLO)
received a dividend payment of $0.27 per share for a dividend yield of 4.80%.
The firm has paid dividends without missing a beat for the last 11 years, and
its dividend CAGR for the past five years is at 4.27 percent.
As
at the ending the second quarter, Stadium Capital Management was the top
shareholder in Ames National Corporation (NASDAQ: ATLO), with holdings valued
at more than $6.2 million. Insider Monkey found that six hedge funds had
invested over $12 million into the firm at the end of the second quarter.
6. Union
Bankshares, Inc. (NASDAQ: UNB)
Share Price as
of September 30: $22.29
Investors
in retail and commercial banking services might look to Union Bankshares, Inc.
(NASDAQ: UNB), a bank holding company headquartered in Vermont. With nine
consecutive years of dividend increases, this firm is among our top picks for
investors seeking a steady income stream. As of September 30, the dividend
yield was 6.41%, thanks to a quarterly dividend payment of $0.35 per share.
Union Bankshares, Inc. (NASDAQ: UNB) had a steady cash balance in the second quarter of 2022. Cash flow from operations was $1.57 million, while free cash flow was $1.45 million. The company's net income increased from $2.4 million in the previous quarter to over $3 million. And with $9.7 million in sales, the company saw a 9 percent increase in profits from a year earlier.
7. STORE Capital Corporation (NYSE: STOR)
Share
Price as of September 30: $31.29
Arizona-based
real estate investment trust firm STORE Capital Corporation (NYSE: STOR)
specializes in net lease solutions for middle-market real estate investing.
When Evercore ISI first started covering the company in September, it did so
with an Outperform rating and a $32 price target, up from $29.
The
AFFO for the second quarter of 2022 for STORE Capital Corporation (NYSE: STOR)
was $163.8 million, while the net income was $90.5 million. With a rise over
the previous quarter's $160 million, the company's free cash flow was $167
million. It showed a 16.6 percent increase in earnings from the last year in
the record $223.8 million in sales.
At
the end of the second quarter of 2022, 22 hedge funds whose portfolios
Insider Monkey analyzes had $422.7 million invested in STORE Capital
Corporation (NYSE: STOR). Twenty-four hedge funds with roughly $748.2 million
in assets under management had a position in the firm at the end of the
preceding quarter.
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