One of the best ways to create a solid income stream is with dividend stocks.
Not only do you get to collect dividends, you can capitalize on stock appreciation—especially with companies with a strong history of performance and dividend increases.
Three top dividend stocks to consider for 2022 include:
Apple (AAPL)
On the verge of becoming a $3 trillion stock, Apple is one of the top “must own” stocks of the new year, with a dividend of 0.5% to boot. All thanks to booming demand for iPhones, and subscription services such as Apple Music, Apple TV, and its App store.
While the company recently missed earnings expectations, supply issues were to blame.
“We had a very strong performance despite larger than expected supply constraints, which we estimate to be around $6 billion,” CEO Tim Cook told CNBC. “The supply constraints were driven by the industry wide chip shortages that have been talked about a lot, and COVID-related manufacturing disruptions in Southeast Asia.”
However, Apple revenues were still up 29%, with solid growth in each of its product categories. Even better, analysts still love the stock, including Citi’s Jim Suva, who just raised his price target to $200 from $170 with a buy rating.
“Demand for Apple’s products and services should be “resilient” in fiscal 2022 following market share gains in 2021,” he said, as quoted by TheFly.com. “The analyst believes Apple’s current market value fails to fully reflect its launches in new categories. He sees this changing with the launch of an augmented reality/virtual reality headset. While regulation is an overhang, it presents ‘headline risk rather than fundamental risk’ and any near-term pullback in Apple shares would be a buying opportunity.”
Microsoft (MSFT)
Microsoft had quite a year.
After bottoming out around $210, the stock popped to $335, and could see higher highs moving forward – especially if it can break above double top resistance around $350.
Helping, the company declared a quarterly dividend of $0.62 per share, an 11% increase over the previous quarter’s dividend. The dividend was payable Dec. 9, 2021, to shareholders of record on Nov. 18, 2021. MSFT also approved a new $60 billion buyback program.
Earnings have been solid, too.
EPS of $2.27 was above $2.07 expectations. Revenue of $45.32 billion was also above expectations for $43.97 billion. In addition, according to CNBC, “With respect to guidance, Microsoft called for $50.15 billion to $51.05 billion in fiscal second-quarter revenue.”
Pfizer (PFE)
Even after a substantial run from about $40 to $60, Pfizer could see higher highs on COVID booster shots moving forward. In fact, the company – which pays out a yield of 2.73% — could see further interest after the US FDA authorized Pfizer’s COVID pill.
“The authorization represents an extraordinary coup for Pfizer, its second of the pandemic. Analysts expect Pfizer to sell $21.7 billion worth of the drug in 2022, according to FactSet, though the company now says that it will make 120 million courses of the drug next year, 40 million more than previously forecast, which will probably drive those estimates higher,” as reported by Barron’s.