It seems the market has become risk-averse in a hurry as we kick off 2022, with major stock indexes like the S&P 500 and Nasdaq-100 flashing warning signals amid persistent declines. Some old favorites among growth stock investors have fared even worse, with high profile names like streaming giant Netflix Inc. (ticker: NFLX) and fitness company Peloton Interactive Inc. (PTON) taking massive dives to erase years of prior gains. In such an environment, stable dividend stocks that have material profits and reliable payouts to shareholders are very much in demand. Here are five such stocks that are shrugging off recent market volatility and holding their own as we enter February:
— Aegon NV (AEG)
— HSBC Holdings PLC (HSBC)
— Philip Morris International Inc. (PM)
— Southern Copper Corp. (SCCO)
— ExxonMobil (XOM)
[READ:Sign up for stock news with our Invested newsletter.]Aegon NV (AEG)
Though not particularly well-known by most U.S. investors, Aegon is a major insurer based in the Netherlands that offers everything from auto coverage to homeowner’s policies to financial services including pension, life insurance and various AEG. Not only is insurance an incredibly stable business thanks to monthly premiums, but AEG also potentially stands to benefit from the current uptrend in interest rates. That’s because insurers like Aegon typically invest the premiums from customers in short-term interest-bearing assets while they wait for claims to come in and require payment, and higher rates mean better returns on this idle cash. Not only is AEG up in the first few weeks of the year in the face of recent volatility, but it has jumped more than 35% in the last six months to show longer-term momentum even as it continues to pay a generous yield.
Dividend yield: 3%
HSBC Holdings PLC (HSBC)
An even more direct play on the rising tide across the financial sector is the $140 billion megabank HSBC. This firm operates traditional banking lines for consumers and businesses along with investment management and capital markets services. Big global banks like this are the quintessential “value” investments, as they have tangible assets via massive cash reserves and reliable profits from day-to-day operations that are vital to the global economy. HSBC has outperformed lately and is up 25% in the last year versus about 13% for the S&P 500 index — including a small uptrend since New Year’s Day even as the rest of the market has fallen apart. The dividend was only paid twice annually last year, but the annual payout is still good for a generous yield that makes this a stock worth watching in early 2022.
Dividend yield: 3.1%
Philip Morris International Inc. (PM)
Say what you will about the problems associated with smoking, but it’s undeniable that folks continue to buy cigarettes regardless of the risks. And as we enter a period of volatility for the stock market, those smokers continue to make purchases regardless of the broader economic environment. That makes $160 billion tobacco icon Philip Morris a slam dunk in the current risk-off environment thanks to its leading brands such as Marlboro — the best-selling cigarette in the world. PM dividends have increased for 13 consecutive years, and income-oriented investors can depend on a nice annual payday regardless of short-term trends on Wall Street.
Dividend yield: 4.9%
Southern Copper Corp. (SCCO)
One of the biggest stories of the last year or so has been inflationary pressures pushing up the cost of raw materials ranging from food products to fossil fuels to metals. And Southern Copper is, naturally, a perfect fit to benefit from inflation in that last category. SCCO is one of the largest direct plays on copper production as a $50 billion company that operates worldwide. Copper is perhaps one of the most in-demand metals out there given its effective conductivity of heat and electricity. That means it’s used as wire and in electrical components, in industrial applications like machines and heat exchangers, and other applications including pipes and roofing materials. SCCO stock has hung tough over the last few months of challenges on Wall Street with January gains despite a difficult market. The company continues to pay one of the most generous dividends you’ll find out there.
Dividend yield: 6.2%
ExxonMobil Corp. (XOM)
Another benefit of inflation is XOM. While much of Wall Street has been in trouble lately, $300 billion oil giant Exxon is cashing in. That’s largely thanks to rising energy prices and consistently higher demand as the global economy recovers in the wake of the worst of the pandemic. The result is that XOM stock has surged more than 15% so far this year and more than 50% in the last 12 months. Income-oriented investors will like the dividends even better, with a yield that is more than three times the typical S&P 500 stock.
Dividend yield: 4.8%
