TOP 20 US stocks with the highest dividend yield in 2022

In 2022, the market offers many good investment ideas. The flow of funds from overvalued growing stocks to classic value stocks makes it possible to make money on the growth of quotations of traditional companies in the natural and financial sectors. In addition, such companies still pay impressive dividends. So let’s look further at which US stocks will deliver the most significant rewards in 2022.

A disclaimer.

Everything written below is not an individual investment recommendation. We don’t encourageм anyone to buy anything. You decide about buying (or not buying) assets yourself after an additional study of companies. The review does not claim to be complete and is intended solely for preliminary acquaintance with the promotions.

All prices and dividend yields are indicated as of the closing date of January 10, 2022. Prices change throughout a trading session, so the value and dividend yield of a stock may be different as you read this article.

The annual dividend yield is calculated and does not include the risks of sudden changes in the company’s dividend policy.

All these shares are traded on the stock exchanges and purchased through brokers such as Forex.com, Plus500 and eToro.

Critical criteria for selecting shares

• positive earnings per share (EPS above 0 – an exception is made only for some telecoms and oil companies, where EPS fell below 0 due to cyclical reasons in the industry);
• EBITDA and FCF are above zero.
• capitalization of the company – from $2 billion;
• trading volume-from $5 million per day;
• net profit margin (revenue – to-profit ratio) – above 0%;
• Net Debt/Equity ratio below 3.

In addition, preferred shares, ETFs and other funds, the majority of REITs (with a 35% tax recalculation, its dividend’s yield is significantly lower than stated), as well as some companies with an unreliable history of dividend payments, are excluded from the review.

At the same time, the list still includes depositary receipts for shares of other countries. Therefore, the list consists of ADRs for Brazil, China, the United Kingdom, etc. Yes, these aren’t technically US stocks, but they are traded on the NYSE. We have also marked themи separately to understand the geographical location of the main production facilities and the central office.

20 US companies with the highest dividend yield in 2022.

Petroleo Brasileiro (Petrobras) (PBR) – 19,74%.

PBR аis the world’s largest oil and gas producer in Brazil and holds the absolute record. In addition to oil and gas production, the company produces biofuels, gasoline, kerosene, diesel, and ethanol (about 35% of the global output) – the leading buyer of products (almost 70%) in China.
The PBR’s profitability is highly dependent on oil prices. So, in 2019, the net profit amounted to 40.1 billion reais, in 2020-only 7.1 million reais, and for three quarters of 2021, already 75.5 billion reais (forecast for 2021 – 105 billion reais).

Thus, the company’s record dividends are mainly due to the record increase in “black gold” prices. If PB distributes the prize by its dividend policy, payments could amount to $1.96 per share, which, at a share price of $9.97, gives a dividend yield of almost 20% per annum.

Petrobras pays its dividend every quarter.

ZIM Integrated Shipping (ZIM) – 17,67%.

An Israeli company that rents ships and provides surface transport services. The peculiarity of ZIM is that it does not have its vessels – it charters them from other companies, transferring them to end customers to sublease. It reduces the cost of servicing the fleet in the “dead season” and allows you to increase turnover during the revival of economic activity quickly.

Last year turned out to be a successful year for ZIM – only for the 4th quarter of 2021, it earned more than for the whole of 2020.

ZIM went public in early 2020 and was just another low-profile U.S.-listed company. But the high-profit margin made the company famous. If ZIM, as usual, distributes 20% of the profit, then for 2021, the dividend may amount to about $10. With a share price of $56.6, the dividendидендная yield is almost 17.67%.

At the same time, the company is very cheap – P/E is only 2.01, and P/S is 0.78. The low price is explained by the fact that investors consider reducing freight costs and the growth of operating expenses and inflation in the balance sheets of 2023-2024.

Star Bulk Carriers (SBLK) – 13,3%.

SBLK – SBLK is another marine carrier with huge profits as supply chains recovered in 2021. For comparison: in 2019, the net loss was $16.25 million, in 2020, the net profit was $9.52 million, and for the 3rd quarter of 2021 – $337 million (forecast for the year – $510 million). Large caps explained the loss in 2019 – the company dramatically increased its fleet by almost 1.5 times (in 2018, the state of emergency was more than $54 million).

In terms of multipliers, Star Bulk is priced more expensive than ZIM (P/E 5.63, P/S 2.08), as investors see excellent prospects in it: the company is actively increasing the number of vessels and expanding its presence.

A dividend of about $3 per share yields a return of approximately 13.3%. In the future, the price is likely to fall to the usual 35-55 cents per share, but as the company develops, it will grow.

Rio Tinto (RIO) – 9,48%.

RIO is one of the most significant diamond and non-ferrous metals producers globally. Rio Tinto’s profitability was helped by a rise in diamond prices in 2021. Like Alrosa, Rio made a record profit, which allowed the company to pay a record dividend, yielding almost double-digit returns in dollars: about $6.85 per share (at a share price of $72.25, this gives a dividend yield of 9.48%).

As other companies increase their diamond production, prices will return to their previous levels. And Rio Tinto’s dividends may be significantly lower by the end of 2022.

BHP Billiton (BHP) – 9,35%.

BHP is one of the world’s largest mining and oil companies, headquartered in Australia. The company produces oil, gas, copper, iron ore, coal and nickel. As you can see, BHP made a phenomenal profit in 2021 amid a rally in the price of fossil resources.

The company can pay about $6 per share in dividends, which at a share price of $64.36 gives a bonus yield of about 9.35%.

MPLX (MPLX) – 9,06%.

MPLX is a subsidiary of Marathon Petroleum, a shard of Rockefeller’s once-great empire of Standard Oil. It works in the United States, in the Midwest in the Rocky Mountains. It produces and transports gas.

The stock has gained 98% (!) since its peak drop in 2020. It was caused by a sharp increase in profits and the announcement of record dividends. So, MPLX has accumulated more than $4.5 billion and will distribute $3 billion in 2021.

The company consistently pays 68.75 cents per share every quarter. If the policy continues in 2022идендная, MPLX’s daily return at a share price of $31.12 will be about 9.06%. And this is the minimum – in 2021, the dividend was increased to 70 cents per share.

Enel Chile (ENIC) – 8,82%.

ENIC is a blackening companyя of the Italian energy company Enel. In 2022, it will pay a record low dividend of just 0.62 cents for the second half of 2021. However, future rewards are questionable. The company has taken a course towards clean energy. It gradually reduces the number of “dirty” assets while actively investing in windmills, solar panels, hydroelectric power plants and other “clean” assets.

Stock prices are falling rapidly – in January 2018, Enel shares were worth almost $6.5; now, in January 2021 – less than $2. So the high dividendидендная yield, in this case, is due solely to the fall in quotations. Whether you want to get involved in such a story – decide for yourself.

Phillips 66 Partners LP (PSXP) – 8,16%.

PSXP, a Texas-based energy companyз, is engaged in storing, processing, and selling petroleum products at its 15 refineries. It slightly reduced its operating margin against the background of rising oil prices. But the growing level of sales convinced investors of the company’s prospects – so the stock rose from its lows to the current $42.

The company consistently pays 87.5 cents per share every quarter. So at current prices, the dividend yield is about 8.16%.

AT&T (T) – 7,84%.

AT&Tis a US telecommunications company that owns, among other things, the HBO brand (which produced some famous TV serials).

AT&T, together with Discovery, is creating a separate media division, and T company will deal exclusively with “wires”. In addition, AT&T will reduce its dividend (since it will allocate a significant part of its assets to a separate company) and lose its status as a dividend aristocrat.

When all this is implemented is unknown, this uncertainty provokes a downward stock rally. Thus, the stock has fallen to $26.5, and in terms of multipliers, it is shallow: P/S 1.09, P / BV 1.16-when did you see such figures? At the same time, AT&T continues to pay 52 cents per share every quarter, which at current quotes gives a dividendидендную yield of 7.84%.

Vale (Vale) – 7,71%.

Vale is a Brazilian mining company, a leader in extracting iron and nickel. It also mines precious metals, cobalt, manganese, coal and produces fertilizers. As you can see, all this (except for precious metals) rose rapidly in price in 2021. Against this background, Vale made a record profit and increased its dividends significantly. So, divидеidsды for the 1st half of 2021 amounted to $1.5, which gave a dividend yield of 16.37%!
But investors are less optimistic about its future, lowering their revenue and dividend forecasts. So, the total dividend amount to “only” $1.13 for the 2nd half of 2021 and the 1st half of 2022, which gives a 7.71% dividend yield to the ADR price of $14.65.

Energy Transfer (ET) – 7,47%.

As the name implies, ET is engaged in the transportation of oil and gas, being oneой ofих the most prominent companies of this profile in the United States. High gas prices provoked a rally in the shares of distribution networks, and ET also got its “piece of cake”.

But at the same time, the company reduced its dividend by two times (from 30.5 to 15.25 cents) against the background of high capital costs (CAPEX). So the quotes also fell.

The current dividend can yield $1.22 per share, which at a share price of $9.12 gives a dividendидендную yield of 7.47%.

British American Tabacco (BTI) – 7,41%.

In the past year, tobacco producers can boast a high dividend yield. BTI is no exception. The total forecast dividend for 2022 is $2.94, which, at a share price of $39.7, gives a dividendидендную yield of 7.41%.

The problem is that BTI has a high-profit margin, like other tobacco producers, provided by falling quotations. At the same time, everything is good in business – cash flows are growing, operating profit is also increasing, i.e. dividends are provided with real money. However, there is apparent market inefficiency when companies rise and stocks fall. It is caused by the so-called HLS effect, where investors and funds sell “sin stocks” because it is unethical to own them.

Lumen Technology (LUMN) – 7,33%.

LUMN is a USA telecommunications company that, unfortunately, is not doing very well. Reduced number of customers, negative profitability, high CAPEX, EPS below 0. So the high dividendидендная yield is solely due to falling quotes that respond to business problems.

At the same time, the dividends themselves are frozen at 25 cents (after falling from 54 cents). While maintaining the same level of rewards, the company’s dividend yield will be 7.33%.
Some investors holdTN for the sake of dividends as a conservative idea, but in the endюthey prefer healthier and growing businesses.

Altria Group (MO) – 7,12%.

MO is still one tobacco manufacturer that has everything in order with its business, but at the same time has problems with capitalization growth simply because of the unwillingness of investors to buy sin shares-in three years, the stock fell from $75 to $50.5.

At the same time, dividends continue to grow in line with the growth of cash flows. But even together with the tips, the fall in quotations gives the investor a final negative return. Of course, the scales may swing in the other direction in the future, and such it will recoup a discount to the market.

The current dividend is 90 cents a quarter, or $3.6 a year, which for a stock price of $50.5 gives a bonus yield of 7.12%.

Kinder Morgan (KMI) – 6,19%.

KMI is the third-largest energy company in North America and cooperates with major oil corporations. The company operates in four segments::

• gas pipelines.
• pipelines (oil, gasoline, fuel oil);
• terminals.
• LNG.

KMI owns 137,000 kilometres of main pipelines (enough to трижды circle the Earth three times around the equator) and 147 terminals with a total storage capacity of 145 million barrels and processing capacity of 64 million tons of dry bulk materials annually. KMI processes ethanol, coal, petroleum coke and steel.

KMI has started gradually raising its dividend after cutting it more than twice in 2015, and this may be a step towards another revaluation of the stock. KMI now pays 27 cents per share (or $1.08 a year), which, at a share price of $17.43, gives a return of 6.19%.

Oneok (OKE) – 6,15%.

OKE is another US gas company that produces and transports “blue fuel”. The company has grown significantly since the March 2020 drop (from $20 to $60), and it continues to pay an excellent dividend: 93.5 cents per share every quarter, which gives an annual dividendидендную yield of 6.15% (at a share price of $60.78).

In general, Oneok is an excellent alternative to the world’s largest gas corporations, as it has stable growing cash flows, higher margins, and is already at the stage of maturity. The only drawback is that it is expensive multipliers, especially for a raw gas company.

BCE Inc. (BCE) – 5,33%.

BCE is the most extensive Canadian telecom providing telephone and satellite communications, Internet, television, radio signals, etc. Stable, reliable and absolutely “uninteresting” business.

More interesting are the dividends that the company is trying to increase. According to BCE company forecasts, the tips for 2022 will be at the level of $2.61, which at a share price of $51.87 will give a dividend yield of 5.33%.

Exxon Mobil (XOM) – 5,13%.

As one of the world’s largest oil and gas companies, Exxon (XOM) вneeds no special introduction. тимLet’s note that 2020 turned out to be a challenging year for the company – the complete lack of diversification and the high cost of fossil fuel extraction has already passed the operating margin by a roller. The company even had to go to drastic measures like firing employees to survive.

But at the same time, XOM in 2020 kept its dividends at the same level (87 cents) without raising them and losing the status of a dividend aristocrat.

In 2021, XOM raised its dividend by just 1 cent (to 88 cents). However, management hopes that high oil prices will continue in 2022, which will allowт XOM to solve its financial problems.

If Exxon Mobil continues to pay 88 cents, then the company’s annual dividendидендная yield at a share price of $68.5 will be 5.13%.

Philip Morris (PM) – 5%.

But regarding PM shares, we see the reverse movement of the pendulum – the high dividend yield attracted more dividend investors than it scared off the opponents of “sin shares”. As a result, PM has been growing steadily for more than a year, rising from $70 to the current $100 per share.

The dividend yield, of course, has fallen, but it is still interesting (and this is with increasing dividends from year to year). Currently, Kurilka pays $1.25 per share ($5 per year), which at a share price of $100 gives a profit margin of 5%.

Takeda Pharmaceutical (TAK) – 4,97%.

Japanese-American Takeda Pharmaceutical closes our TOP stock with the highest dividend yield in 2022. It is the most significant pharmaceutical company in Asia and the 15th globally, with worldwide factories. The company produces cardiovascular, metabolic, neurological, gastroenterological diseases, Parkinson’s disease, stimulating immunomodulators, and fighting cancer. Takeda’s factories are located all over the world.

Takeda is also increasing its dividend once it resumes payments in 2019. The growth rate is not so ужimpressive, but the dividend yield is still at the same level-the forecast dividend in 2022 is 67 cents per share, which gives a yield of 4.97%. In addition, buying shares in such a company is an international diversification, after all.

Final disclaimer.

Just in case, we noteтимthat the average dividend yield on the US market is about 2-2.5% per annum. Therefore, anything above this value, multiplied by two, is a high-risk investment. Often, a high dividend yield is combined with some problems in its business or uncertainty in its future.

In addition, high profitability in commodity companies is a temporary phenomenon due to high prices for finished products, and in the future, dividends (as well as stock prices) will fall.

Therefore, carefully analyze the company’s business and buy high-dividend stocks only after a balanced analysis of all the risks and understanding of all the disadvantages. Don’t let just one factor have a crucial impact on you – it usually doesn’t lead to anything good. It is easy to buy stock in a “value trap”* or in general, a “zombie company”** paying dividends out of debt and preparing for future bankruptcy.

Note:

• A Value Trap is a situation where a stock is trading at very low multiples and therefore appears undervalued. However, the reality is that companies’ supplies caught in the value trap are unlikely to grow even in the long run as their business stagnates.
  An example of such a company is IBM. Pay attention to the multi-year sideways trend and the negative 5-year yield.

** A zombie company (or zombie firm) is a company that is neither alive nor dead. A distinctive feature is the presence of so much debt that any income is used to repay loans and other financial obligations. Simply put, the company does not work for shareholders but its creditors. Zombie companies do not have enough money to develop and modernize production, so they use outdated technologies and machines; as a result, they cannotгуgain a competitive advantage. In addition, the presence of a high debt burden does not allow the company to expand (open new production facilities, stores, branches) and hire new employees. In other words, the company is in a state of”immobility” or stagnation (whichever you prefer).

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