Amid uncertain times, investors can take comfort in dividends.
As we turn the page on 2021, it was undoubtedly another great year for stocks. All told, the S&P 500 should finish the year up about 25% if current levels hold for another week or so. That said, it’s undeniable that many investors are starting to think about getting a bit more defensive in the new year. It’s not just the threat of price inflation or disruptions from omicron — it’s also the hard reality that after 31% gains in 2019 and 18% gains in 2020, there might not be another huge year ahead of us for stocks. So if you’re viewing your portfolio with some trepidation despite the end of a pretty good year, you may want to consider some of the following dividend stocks that offer stability and income that could serve as a firm foundation for your portfolio regardless of growth trends in 2022.
AllianceBernstein Holding LP (ticker: AB)
A New York-based asset manager that has been making a name for itself since its foundation in the 1980s, AllianceBernstein provides research and investment services to high-net-worth and institutional clients, including corporate and government pension plans, trusts and estates, and business entities offering 401(k)s and other services to employees. In addition to making the right money moves lately, AB has also benefitted from a general uncertainty in the wake of the coronavirus pandemic that has prompted many institutions to seek out expert financial advice. Earnings and revenue are trending steadily higher and shares have outperformed nicely in 2021 in addition to offering a significant stream of income to shareholders.
Camping World Holdings Inc. (CWH)
More of a “glamping,” or glamorous camping, play than an investment in traditional camping gear, the $3 billion CWH is America’s largest dealer of recreational vehicles. These include small pop-up campers and full-size rigs that are essentially mobile vacation homes. The company is also happy to add on after-market sales including upscale furniture, flooring, window treatments, generators and other creature comforts. Driven by the social distancing phenomenon of 2020 and continued interest in outdoor living this year, Camping World is predicting more than 20% revenue growth for fiscal 2021. It also pays a generous 50-cent quarterly dividend good for a yield north of 5%.
Chimera Investment Corp. (CIM)
Chimera operates as a real estate investment trust, or REIT, even though it doesn’t hold any tangible property assets. Instead, the company invests in a portfolio of mortgage assets, including mainly residential mortgage loans. By being taxed as a REIT, however, CIM is not subject to federal corporate income taxes so long as it distributes at least 90% of its taxable income to its shareholders. That means a mandate for big dividends — and thanks to a robust U.S. mortgage lending market, shares have also risen 40% so far in 2021 and show strong momentum as we close out the year.
EnLink Midstream LLC (ENLC)
A $3 billion pipeline company, ENLC is a “midstream” energy business that is involved in the transportation, processing and storage of natural gas. It operates approximately 11,900 miles of pipelines, 22 natural gas processing plants, barges, rail terminals, trucks and more. EnLink is among the top performing companies on Wall Street this year thanks to its unique business operations that are insulated from direct energy price swings and should benefit from an increase in demand. The result is a big dividend and big gains of more than 60% in 2021, which means strong momentum could follow in the new year as well.
EPR Properties (EPR)
EPR is another REIT like Chimera. However, this is indeed a more traditional real estate firm as it operates commercial properties under a “triple-net lease” structure — meaning the tenants are on the hook for rent, but also have to take care of utilities, taxes, upkeep and similar expenses out of their own pockets. EPR serves the entertainment industry with facilities including ski resorts, theaters and amusement parks among the tenants that make up its nearly $7 billion portfolio across 44 states. While there’s admittedly some uncertainty around these businesses thanks to the omicron variant, the 35% gains year to date for EPR hint that investors are not expecting operations to fall apart anytime soon. And as the tenants keep paying their rent, this dividend stock will keep paying its shareholders.
Exxon Mobil Corp. (XOM)
Big Oil was decidedly out of favor in the last few years, but Exxon has come back with a vengeance in 2021 for two big reasons. The obvious one is that rising energy prices alongside rising global oil and gas demand have delivered big results, with revenue set to rise more than 60% over the prior year. But it’s also worth noting that Exxon’s big investments in greener alternatives to fossil fuels are starting to bear fruit, including its Strathcona renewable diesel project that is part of plans to provide more than 40,000 barrels per day of low-emissions fuels by 2025. Shares remain well off their highs of almost $90 back in 2017 despite the recent run, however, and investors can still enjoy a tremendous dividend yield as shares trade at a relative discount.
Lumen Technologies Inc. (LUMN)
Previously known as Century Link, Lumen boasts some 4.6 million broadband internet subscribers and a legacy business of phone landlines that against all odds continue to generate a decent amount of cash. That’s because some rural areas still suffer from unreliable service. Lumen has done its best to expand and stay relevant beyond this old-school telecom network, including a host of acquisitions that have targeted digital services — chief among these being a $25 billion deal for internet service provider Level 3 in 2016. It may not be as big as giants such as AT&T Inc. (T) or Verizon Communications Inc. (VZ), but Lumen still has something to offer dividend investors in 2022.
Prospect Capital Corp. (PSEC)
Recently making an appearance in U.S. News as one of the best monthly dividend stocks, Prospect Capital is a triple threat with a big-time distribution, monthly dividends and a tremendous 2021 gain of roughly 50% this year. Things are looking up for the beginning of 2022, too, with strong fiscal first-quarter earnings posted at the beginning of November, including a big earnings beat and robust investment income. Operating almost like a publicly traded version of a private equity fund, PSEC profits by investing in small- and mid-sized companies across a wide array of industries. Those investments have paid off as the economy has been on the upswing this year, and there’s reason to expect that performance to continue going forward.
Sunoco LP (SUN)
As a major distributor of retail motor fuels in the U.S., Sunoco is a recognizable brand with a value proposition that speaks for itself. Yes, there is an increased focus on electric vehicles — but EVs are a tiny fraction of the cars on the road, and hundreds of millions of Americans still have to get to work and the store the old-fashioned way: with a combustion engine. Sunoco also cashes in on food service and novelty sales at its branded convenience stores, as well as offering distribution that connects independent refiners with local partner stations. It’s not a glamorous business, but it’s a reliable one — meaning solid dividends that investors can take to the bank.
9 high-yield dividend stocks to buy for 2022:
— AllianceBernstein Holding LP (AB)
— Camping World Holdings Inc. (CWH)
— Chimera Investment Corp. (CIM)
— EnLink Midstream LLC (ENLC)
— EPR Properties (EPR)
— Exxon Mobil Corp. (XOM)
— Lumen Technologies Inc. (LUMN)
— Prospect Capital Corp. (PSEC)
— Sunoco LP (SUN)
