In this article, we will discuss 10 safe dividend stocks with high yields. To skip our analysis of dividend investing, you can go directly to 5 Safe Dividend Stocks with High Yields.

According to a report published by Global X, between 1960 to 2017, stocks paying high dividends outperformed the S&P 500 in terms of absolute and risk-adjusted returns. On an annualized basis, the total return of these stocks was roughly 3.0% higher than the S&P 500. Moreover, a 6.4% average yearly dividend yield was generated by high dividend stocks during the same period.

Similarly, Wellington Management, in partnership with Hartford Funds, concluded that high-yielding stocks outperformed the S&P 500 index 77.8% of the time between 1930 and 2020, while low-yielding stocks outperformed the S&P 500 index 44.4% of the time.

A high-yield stock has no precise definition. Most investors, however, would identify it as a stock with a higher dividend yield than a typical benchmark, such as the S&P 500 Index. The S&P 500 dividend yield averaged less than 1.5% in 2021, while the 10-year U.S. Treasury note yield fluctuated between 1.25% and 1.75%. Dividend stocks could be appealing to investors searching for companies that can withstand uncertain market and economic conditions. Philip Morris International Inc. (NYSE:PM), Verizon Communications Inc. (NYSE: V.Z.), and Exxon Mobil Corporation (NYSE:XOM) are some of the popular stocks that have seen over ten consecutive years of dividend growth.

Safe Dividend Stocks with High Yields

10. Valero Energy Corporation (NYSE:VLO)
Dividend Yield as of December 29: 5.46%
Number of Hedge Funds: 32

Valero Energy Corporation is a Fortune 500 company headquartered in San Antonio, Texas, with a headcount of around 10,000 employees. The corporation is the world’s biggest independent refiner with 15 refining sites spread across Canada, the U.S., and the U.K. Valero Energy Corporation (NYSE:VLO) happens to be the second-largest producer of environment-friendly high-octane renewable fuel, corn ethanol.

Valero Energy Corporation (NYSE:VLO) reported its Q3 2021 results on October 21. The company posted an EPS of $1.22, beating the analysts’ estimate of 92 cents. Valero Energy Corporation (NYSE:VLO) also beat the revenue estimate of $23.97 billion by $5.55 billion.

In a report issued to investors on October 26, Bill Selesky at Argus increased the target price on Valero Energy Corporation (NYSE:VLO) from $83 to $93 and reiterated a Buy rating on the stock. The analyst highlighted the strong Q3 results that were a result of higher than expected sales from all divisions of the business. Selesky also anticipates higher gasoline demand to continue during the next year, along with added demand for diesel and jet fuel. He expects a further boost in the top line and bottom line in the upcoming quarters.

Apart from Valero Energy Corporation (NYSE:VLO), companies like Philip Morris International Inc. (NYSE:PM), Verizon Communications Inc. (NYSE: V.Z.), and Exxon Mobil Corporation (NYSE:XOM) also offer dividend yields of over 4%, as of December 29.

9. Cardinal Health Inc. (NYSE:CAH)
Dividend Yield as of December 29: 4.05%
Number of Hedge Funds: 36

Cardinal Health Inc. (NYSE:CAH) is a distributor of pharmaceuticals along with medical and laboratory products and provides data and performance solutions to the healthcare industry. The Dublin, Ohio-based company is the 14th biggest company in the U.S. in terms of revenue.

Cardinal Health Inc. (NYSE:CAH) announced a quarterly dividend of 49 cents per share on November 4. Cardinal Health happens to be a member of the prestigious Dividend Aristocrat List as well. The list comprises companies in the S&P 500 Index that have increased their dividends for the past 25 years consecutively. Cardinal Health Inc. (NYSE:CAH) has raised its annual dividend for the past 34 consecutive years.

Cardinal Health Inc. (NYSE:CAH) reported mixed Q1 FY22 results on November 9. The company reported revenue of $43.97 billion, surpassing the analysts’ estimate of $41.93 billion. However, the company missed the consensus EPS estimate of $1.33 by reporting EPS of $1.29 due to inflationary pressure increasing cost, and reducing margins of the medical segment. The corporation reiterated its FY22 EPS view of $5.60 to $5.90. The midpoint of $5.75 is just one cent lower than the consensus estimate of $5.76. In the quarterly results, Cardinal Health Inc. (NYSE:CAH) also authorized an additional $3 billion stock buyback plan, which will further boost the shareholder return in the future.

8. Prudential Financial, Inc. (NYSE:PRU)
Dividend Yield as of December 29: 4.23%
Number of Hedge Funds: 33

Prudential Financial, Inc. (NYSE:PRU) is a provider of financial products, insurance, and investment management services. The Newark, New Jersey-based company is one of the biggest insurance companies in the U.S. The corporation has catered to retail and corporate customers in the U.S. and 40 other countries since starting its operations nearly 145 years ago. Prudential Financial, Inc. (NYSE:PRU) has been increasing its annual dividend for the past 13 consecutive years and most recently declared a quarterly dividend of $1.15 per share on November 9.

In addition, Prudential Financial, Inc. (NYSE:PRU) approved a stock repurchase program of $1.5 billion that will be executed from January 1, 2022, to December 1, 2022. Out of the 867 hedge funds being tracked by Insider Monkey, 33 held a stake in Prudential Financial Inc. (NYSE:PRU) at the end of Q3, up from 28 in the preceding quarter.

In a research note issued on December 2, Alex Scott at Goldman Sachs initiated coverage on Prudential Financial, Inc. (NYSE:PRU) with a Neutral rating and a price target of $115. The analyst appreciated the corporation’s plan of shifting its focus towards lower capital-intensive businesses. However, the analyst highlighted the need to do mergers and acquisitions (M&A) for better growth prospects in the future.

7. LyondellBasell Industries N.V. (NYSE:LYB)
Dividend Yield as of December 29: 4.93%
Number of Hedge Funds: 39

LyondellBasell Industries N.V. (NYSE:LYB) is a chemical company and the biggest licensor of polyethylene (P.E.) and polypropylene (P.P.) globally. The Dutch company headquartered in Houston, Texas, and Rotterdam paid out a quarterly dividend of $1.13 per share on December 6. This translates into a forward dividend yield of 4.93% as of December 29.

In a research note issued on November 2, Michael Sison at Wells Fargo issued an Overweight rating on LyondellBasell Industries N.V. (NYSE:LYB) stock with a price target of $120. LyondellBasell Industries N.V. (NYSE:LYB) has come under pressure as the cost of polypropylene (P.P.) and polyethylene (P.E.) has increased because of higher energy and feedstock costs. However, natural gas prices are expected to decline in 2022, according to the Energy Information Agency (EIA) in the U.S. As compared to other companies operating in the industry, Sison thinks that LyondellBasell Industries N.V. (NYSE:LYB) is in the best position to weather the near-term pressure on costs.

Out of the 867 hedge funds in Insider Monkey’s database, 39 reported owning a stake in LyondellBasell Industries N.V. (NYSE:LYB) at the end of Q3. Eagle Capital Management is the leading shareholder in the company, with a stake worth $302.5 million.

6. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of December 29: 4.98%
Number of Hedge Funds: 41

International Business Machines Corporation (NYSE:IBM) manufactures and sells software, hardware, and middleware in over 170 countries. The Armonk, New York-based company founded in 1911, holds the record for most patents generated by a business in the U.S. annually for the past 28 consecutive years. International Business Machines Corporation (NYSE:IBM) is also a member of the Dow Jones Industrial Index (DJIA) and employs over 345,000 employees across the globe. The entity paid out a quarterly dividend of $1.64 per share on December 10 and has been increasing its annual dividend for the past 22 years.

Under the leadership of CEO Arvind Kumar, International Business Machines Corporation (NYSE:IBM) is undergoing a right-sizing exercise, shifting its focus from a legacy hardware and software company towards an entity that is relied on artificial intelligence (A.I.) and cloud. The organization spun off its managed infrastructure services Kyndryl Holdings, Inc. (NYSE: K.D.) in October 2021. Meanwhile, with the complete integration of Red Hat, International Business Machines Corporation (NYSE:IBM) is geared up to fight for its place in the cloud computing industry.

Keeping in view the strategic shift, Sami Badri at Credit Suisse gave International Business Machines Corporation (NYSE:IBM) an Outperform rating with a target price of $164.29 on December 7.

In addition to International Business Machines Corporation (NYSE:IBM), Philip Morris International Inc. (NYSE:PM), and Verizon Communications Inc. (NYSE: V.Z.), Exxon Mobil Corporation (NYSE:XOM) is one of the popular companies that has increased its dividends for the past ten consecutive years.

5. Altria Group, Inc. (NYSE:MO)
Dividend Yield as of December 29: 7.71%
Number of Hedge Funds: 45

Altria Group, Inc. (NYSE:MO) manufactures and sells cigarettes, smoke-free products, other nicotine-based products globally. The Henrico County, Virginia-based company was one of the 30 members of the Dow Jones Industrial Average for 23 years from 1985. However, the company lost its position after it spun off its 88.1% holding in Kraft Foods Inc. (NYSE:KHC) in 2007 and Philip Morris International Inc. (NYSE:PM) in 2008.

On December 9, Altria Group, Inc. (NYSE:MO) declared a quarterly dividend of 90 cents per share. In August, the company increased its quarterly dividend from $0.86 per share to $0.90 per share, reflecting an increase of 4.7%.

There was speculation in the tobacco industry implying that Philip Morris International Inc. (NYSE:PM) is pursuing a merger back with Altria Group, Inc. (NYSE:MO). However, these rumors were put to rest by Jacek Olczak, CEO of Philip Morris who said that Philip Morris is ready to move ahead and focus on increasing its footprint in the “pharmaceutical and therapeutic” segment.

Altria Group, Inc. (NYSE:MO) is diversifying into e-vapor, tobacco heating solutions like IQOS. It also made a multi-billion dollar investment in the cannabinoid company Cronos Group. The investment made Altria Group, Inc. (NYSE:MO) the biggest shareholder in the company.

Altria Group, Inc. (NYSE:MO) was mentioned in the Q2 2021 investor letter of Broyhill Asset Management. Here’s what the investment management firm said:

“Altria (MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.

MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”

4. Philip Morris International Inc. (NYSE:PM)
Dividend Yield as of December 29: 5.38%
Number of Hedge Funds: 48

Philip Morris International Inc. (NYSE:PM) is a Swiss-American corporation that manufactures cigarettes, smoke-free products, other nicotine-based products and sells them in over 180 countries across the world. The

tobacco giant declared a regular quarterly dividend of $1.25 per share on December 9. In September, the company’s normal quarterly dividend was increased by 4.2% to $5.00 per share on an annualized basis. The Stamford, Connecticut-based company was spun off from Altria Group, Inc. in 2008. Since then, Philip Morris International Inc. (NYSE:PM) has been increasing its dividend for the past 13 years.

Back in September 2021, the US International Trade Commission (ITC) banned the import and sale of IQOS devices in the US introduced by Philip Morris International Inc. (NYSE:PM) in 2020. This was because the product trespassed on the patents held by R.J Reynolds, a subsidiary of British American Tobacco. In early December 2021, President Biden’s administration also did not intervene in the US ITC’s decision after the end of the 60-day review period.

Following this development, Lisa K. Lewandowski at Bank of America maintained a Buy rating on Philip Morris International Inc. (NYSE:PM) stock in a research note issued on December 1. The analyst anticipates Philip Morris to challenge ITC’s decision as the corporation has challenged such patent infringement rights in the past as well. However, the appeal process can take more than one year, during which the import ban will remain imposed. Philip Morris International Inc. (NYSE:PM) is also anticipating a decision from the US Patent and Trade Office in January 2022 and April 2022 as the two patents, which are under question, will be reviewed, and a final decision will be made.

3. Chevron Corporation (NYSE:CVX)
Dividend Yield as of December 29: 4.51%
Number of Hedge Funds: 51

Chevron Corporation (NYSE:CVX) is a San Ramon, California-based oil company that was one of the offspring of John D. Rockefeller’s Standard Oil Corporation. The company has a presence in over 180 countries either through its exploration and production, transportation and logistics, or refining and marketing segments. Chevron Corporation (NYSE:CVX) has been raising its annual dividend for the past 34 consecutive years, which makes it a member of the Dividend Aristocrat list. Chevron paid a quarterly dividend per share of $1.34 on December 10, translating into a forward dividend yield of 4.51% as of December 29.

Chevron Corporation (NYSE:CVX) announced that it sees its share repurchase to be around $3 billion to $5 billion as opposed to the previous guidance of $2 billion to $3 billion. In case the company maintains or increases its dividend going forward, it will have a favorable impact on the dividend yield of Chevron Corporation owing to lower outstanding shares.

Goehring & Rozencwajg Associates shared its stance on Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter. Here’s what the investment management firm said:

“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.

What should Chevron expect?

It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”

2. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of December 29: 4.86%
Number of Hedge Funds: 57

Verizon Communications (NYSE:VZ) is amongst one of the biggest communication technology corporations globally and offers information and entertainment products and services as well. The company came into being after AT&T Corporation (NYSE:T) was instructed by the US Department of Justice to break down the Bell System into seven separate corporations in 1984. As a result, Bell Atlantic was created, which was later renamed Verizon Communications (NYSE:VZ) in 2000. The company has increased its dividend for the past 15 consecutive years. On December 2, Verizon Communications (NYSE:VZ) declared a quarterly dividend of 64 cents per share.

The New York-based telecom giant reported mixed Q3 2021 results on October 20. Verizon Communications (NYSE:VZ) reported $32.9 billion in revenue and an adjusted EPS of $1.41, compared to the analysts’ estimate of $33.2 billion in revenue and an adjusted EPS of $1.36.

In October, Colby Synesael at Cowen increased the price target on Verizon Communications from $68 to $71 and reiterated an Outperform rating on the stock. The analyst highlighted the good Q3 results and appreciated the raised FY21 guidance. The analyst also sees Verizon Communications (NYSE:VZ) as significantly undervalued.

Miller/Howard Investments shared its stance on Verizon Communications (NYSE:VZ) in its Q1 2021 investor letter. Here’s what the firm said:

“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”

1. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of December 29: 5.77%
Number of Hedge Funds: 64

Exxon Mobil Corporation (NYSE:XOM) is the biggest publicly listed energy company in the US. The Irving, Texas-based oil major is involved in the exploration and production (upstream), transportation (midstream), an refining and marketing (downstream) segment of crude oil, crude oil condensates, and natural gas. The integrated oil company also happens to be a member of the Dividend Aristocrat list as it has been increasing its annual dividend for 37 consecutive years. On October 27, Exxon Mobil Corporation (NYSE:XOM) declared a quarterly dividend of 88 cents per share. The company has a forward dividend yield of 5.77% as of December 29.

In a report issued to its investors on December 10, Phil Gresh at JPMorgan increased the price target on Exxon Mobil Corporation (NYSE:XOM) from $81 to $83 and maintained an Overweight rating on the stock. The target reflects a potential upside of over 32% from the current stock price. The analyst said that Exxon Mobil Corporation (NYSE:XOM) is heading into a new direction through its newfound financial discipline that has resulted in slashing its record level of debt. Furthermore, the analyst thinks that Exxon Mobil Corporation (NYSE:XOM) has a mix of defensive and offensive assets on its portfolio. Gresh especially highlighted the high-margin Guyana business as a source of creating healthy free cash flows in the years to come.



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