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 well-established 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. Not all income stocks are created equal, however. Many higher-yield companies have weak balance sheets and run into trouble during recessions or times of disruption. Many former dividend stalwarts had to slash or eliminate their dividends entirely during the COVID-19 pandemic, for example. When picking dividend stocks, don’t just reach for the highest yield today. It’s important to select for both current income and future growth prospects. These 15 dividends stocks to buy will put an income portfolio on the right path in 2022.

Exxon Mobil Corp. (ticker: XOM)

It’s been a rough seven years for the major oil and gas companies. Since the price of oil crashed in 2014, most energy companies had to slash their dividends as they hunkered down to survive. Exxon Mobil was the exception. Management maintained its generous dividend despite the near-term decline in its profits. Exxon Mobil also kept spending heavily on new oil, gas and refining projects. One of these in particular, Exxon’s offshore Guyana oil field, has become one of the most important new energy assets in the industry. Because Exxon Mobil invested through the business cycle while most peers pulled back, the company is now optimally positioned to enjoy the current resurgence in energy prices. At the same time, Exxon Mobil’s income appeal is as strong as ever. The dividend is rock solid — surviving even negative oil prices in 2020 — and shares offer a healthy 5.7% payout.

Enbridge Inc. (ENB)

Oil and gas producers aren’t the only dividend players in the energy industry. There are also the midstream companies, which are responsible for the storage, transportation and distribution of oil, gas and refined products. Enbridge may not be a household name in America, but it’s one of Canada’s blue-chip stocks and is the fourth-largest holding in the MSCI Canada ETF (EWC). Enbridge has one of the largest pipeline networks in North America and has rewarded shareholders with stable dividends for decades. The company didn’t cut its dividend during the recent COVID-19 downturn; in fact, it has actually increased its payout significantly in recent years. While oil and gas prices are volatile, pipelines tend to be quite stable. Enbridge rewards its shareholders with a 7.2% dividend yield.

Toyota Motor Corp. (TM)

Most auto stock traders have focused on electric vehicle, or EV, companies in recent years. That’s understandable; there’s certainly been a lot of activity and new product launches out of the emerging EV space. However, don’t count out the traditional automakers. These firms already have huge customer bases, dealership relationships, and global supply chain and logistics footprints. And some are actually quite advanced in terms of their EV capabilities. Toyota, for example, launched the Prius, which was one of the first truly successful hybrid vehicles. Earlier this year, Toyota announced plans to launch 15 electric vehicles by 2025. It will also be investing more than $3 billion for U.S.-based battery manufacturing facilities. Make no mistake, Toyota is a serious player in the next generation of vehicles. In the meantime, Toyota is already hugely profitable and trades at just 10 times earnings. The stock also offers a solid 2.5% yield.

Intel Corp. (INTC)

Investors generally don’t think about technology companies as big dividend payers. However, there are some exceptions, particularly in more mature tech firms. Intel is a cash cow thanks to its large and stable semiconductor business for personal computers and data center machines. While these are not 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 to augment the core business. 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 Intel 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. This will also reduce Intel’s capital expenditures, freeing up funds to reinvest in the core business or return capital to shareholders. Intel pays a 2.7% yield today.

Lockheed Martin Corp. (LMT)

The defense industry didn’t have a great 2021. The Biden administration’s decision to pull out of Afghanistan caused investors to sell off the sector broadly. Despite that, Lockheed Martin keeps piling up new contracts with the U.S. government and foreign powers, solidifying its status as one of the best dividend stocks to buy for 2022. Most recently, Lockheed Martin secured a $9.4 billion contract from Finland for 64 F-35 fighter jets. Shares remain in a slump, however. The environmental, social and governance movement acts as a headwind, as many institutional investors simply aren’t willing to own companies that make armaments anymore. As institutions shun military contractors, that gives ordinary investors a lower entry point. Lockheed Martin stock trades for just 13 times forward earnings and pays a 3.2% dividend yield.

Raytheon Technologies Corp. (RTX)

Raytheon is another large defense contractor. In its present form, Raytheon was formed by a merger with United Technologies. That entity in turn spun off several businesses, such as elevators and air conditioning. This left Raytheon as a focused play on aerospace, drones, satellites and cybersecurity. Raytheon has seen its valuation slip to a level well below the S&P 500 as a whole in part due to the defense industry malaise. It’s worth noting that Raytheon has considerable exposure to the commercial aviation and space sectors, as well, so it’s not a pure defense contractor by any means. The company is trading at 17 times forward earnings, and analysts see earnings growing at a double-digit rate going forward. In addition, RTX stock yields 2.4%.

JPMorgan Chase & Co. (JPM)

It might seem too late to buy the next stock on the list of the best dividend stocks to buy for 2022. After all, JPMorgan shares have advanced about 25% in 2021 and trade near all-time highs. However, don’t overlook how much the biggest U.S. bank’s core business has grown over the same span. Thanks to a booming housing market, rising stock market activity and an improving interest rate environment, banks such as JPMorgan are having a tremendous time. Both the retail bank and investment bank are putting up excellent results. Even after its big move, JPMorgan is still selling for just 10 times its current-year earnings. The fact that banking legend Jamie Dimon runs the firm only adds to JPMorgan’s allure. Shares also offer a 2.5% dividend yield.

New York Community Bancorp Inc. (NYCB)

For investors wanting a safe higher-yielding bank, there’s New York Community Bancorp. The firm is a specialized regional bank focusing on lending for multifamily properties in the New York City metropolitan area. The bank makes loans with a low loan-to-value ratio, ensuring that it suffers minimal losses even during economic busts. For example, New York Community Bancorp remained profitable and continued paying its dividend during the 2008-2009 financial crisis. Shares of the bank moved higher in 2021 as New York City pulled out of its pandemic-induced slump. However, a delay in a pending merger with Flagstar Bancorp Inc. (FBC) sent the stock back down from $14 to $12.50. That gives income investors a better entry point, as the bank pays a 5.6% dividend yield.

Westpac Banking Corp. (WBK)

Turning to international banks, Westpac also looks interesting. The company is one of the titans of the Australian banking industry. Shares have slumped from $20 to $15 in recent months. That’s in part due to economic weakness in China bleeding into the prices of key Australian commodity exports such as iron ore. Australia’s economy, in a significant way, is tied to inflation and global growth. Over the past quarter, investors have started to de-emphasize inflation and focus on rising interest rates and economic slowdown instead. However, if inflation becomes the pressing concern again and commodity prices start another surge, Westpac and other Australian names should regain their recent losses. In the meantime, the Australian banks are known for their fat dividends. WBK stock offers a 6.2% dividend yield.

Grupo Aval (AVAL)

Sticking with international banks, 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 derives around half its export receipts from crude oil. As a result, the economy had fallen on hard times in recent years. Colombia has come roaring out of the pandemic, however, as oil has soared and the travel and tourism sector has surpassed 2019 levels of activity. Despite that, Aval remains down about 30% from pre-pandemic levels as foreigners haven’t figured out that Colombia is surging again. That’s even despite the firm recently announcing record quarterly profits. Aval pays a monthly dividend of roughly 2.5 cents per share, which works out 30 cents per year, or a 5.5% dividend yield.

Realty Income Corp. (O)

Aval isn’t the only attractive monthly dividend stock out there for 2022. Real estate investment trust Realty Income is also worth consideration. The triple net lease operator holds a wide array of properties for primarily retail and industrial uses. Top tenants include the likes of 7-Eleven, Walgreens Boots Alliance Inc. (WBA) and FedEx Corp. (FDX). While enclosed shopping mall owners have struggled to adopt to e-commerce and the pandemic, Realty Income’s stand-alone retail properties have held up much better. The company also just completed a large merger with Vereit earlier this year, adding to its property base. Given the challenging retail landscape, it’s unlikely that Realty Income will grow its business or share price all that quickly. However, it’s arguably the most famous monthly dividend company out there, and shares are good for a 4.3% yield going forward. In a world with such low interest rates, that’s a generous alternative.

Bristol-Myers Squibb Co. (BMY)

It’s been a pretty tough year for pharmaceutical and biotech companies. Unless a firm has a COVID-19 vaccine or treatment angle, there hasn’t been a lot of investor appreciation for the sector. However, falling stock prices across the sector have started to create some opportunities heading into 2022. Bristol-Myers stock, for example, has slipped 20% since the summer. Given that decline, shares are now selling for just 7 times forward earnings. With such a knockdown valuation, it might seem the business is in trouble. But management actually forecasts revenue growth of a few percent per year through 2025. Combine any growth with a rock-bottom price-earnings ratio, and good things tend to happen. The company is digesting several large mergers, but Bristol-Myers Squibb should establish a consistent earnings trajectory going forward and obtain a higher valuation. BMY currently yields 3.7%.

3M Co. (MMM)

3M is the quintessential dividend company. Known for Post-It notes, 3M has developed a robust line of products for a wide range of consumer and industrial uses. 3M makes insulation, lubricants, medical supplies, personal protective equipment, dental tools and cleaning supplies, among many other goods. Given its massive range of products, 3M is a great way to invest in the American economy as a whole. Its remarkable diversification makes it a bedrock portfolio holding as 3M consistently grows its revenues and earnings decade after decade. As a result, it has managed to increase its dividend for more than 50 years in a row, making it one of few dividend kings. The stock currently yields 3.4%.

Northwest Natural Gas Co. (NWN)

Utilities certainly aren’t the most flashy stocks around. No one talks about getting rich on a power company at a cocktail party. However, dividend investors know better than to overlook these humble income machines. Northwest Natural is another of the dividend kings, with a dividend increase streak running back more than 50 years. The Portland, Oregon-based firm is a natural gas utility and has benefited from the significant economic and population growth of the Pacific Northwest in recent years. The utility sector underperformed the market in 2021. Volatility in energy prices created some concerns, and investors discounted utility shares amid the worries about rising interest rates. At the end of the day, however, Northwest Natural is down more than 30% from its pre-pandemic peak share price and pays a 4.1% dividend. That should be enough to convince more than a few income investors to pick it instead of a bond or a bank certificate of deposit.

South Jersey Industries Inc. (SJI)

Turning from the West to the East Coast, South Jersey Industries is the final pick on the list of the best dividend stocks 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 the New York City suburbs. South Jersey is a slow-moving enterprise. Given New Jersey’s relatively subdued population growth, South Jersey doesn’t grow too quickly. That’s probably fine with most income investors, however. South Jersey trades at less than 15 times forward earnings. Meanwhile, shares pay a 5% dividend yield heading into 2022. The stock is down about 15% from 52-week highs, offering decent relative value, as well.

15 best dividend stocks to buy for 2022:

Exxon Mobil Corp. (XOM)

Enbridge Inc. (ENB)

Toyota Motor Corp. (TM)

Intel Corp. (INTC)

Lockheed Martin Corp. (LMT)

Raytheon Technologies Corp. (RTX)

JPMorgan Chase & Co. (JPM)

New York Community Bancorp Inc. (NYCB)

Westpac Banking Corp. (WBK)

Grupo Aval (AVAL)

Realty Income Corp. (O)