- Investors are shopping around for the best dividend stocks that could help weather an uncertain stock market.
- Abbvie (ABBV): Anticipates its newer drugs, Skyrizi and Rinvoq, to generate a combined revenue of over $15 billion in 2025.
- Exxon Mobil (XOM): Tripled its share repurchase program to $30 billion through 2023.
- SL Green (SLG): Expects office buildings to remain in high demand by institutional investors.
- United Parcel Service (UPS): The guidance for 2022 projects an all-time high revenue of $102 billion
- Verizon Communications (VZ): Accelerating 5G deployment suggests a long-term upside due to rising data consumption.
Last week, we found out that the consumer price index (CPI) went up by 8.3% in April, more than the 8.1% estimate. Meanwhile, the ongoing war in Ukraine is adding to the already jittery market sentiment.
As a result, investors are switching from high-growth stocks and looking for the best dividend stocks that could help them ride through the stock market uncertainty.
Passive income in the form of regular dividend returns significantly reduces the volatility of a long-term portfolio. It also provides a hedge against rising inflation.
S&P Global (NYSE:SPGI) estimates that dividends have accounted for about a third of the total return for the S&P 500 index over the past century.
The remaining two-thirds come from capital appreciations. In addition, on a risk-adjusted basis, dividend names have delivered returns that have outperformed those shares that do not pay dividends as well as the broader market.
With that information, here are five of the best dividend stocks that could generate consistent returns in today’s volatile stock market.
| ABBV | AbbVie | $153.50 |
| XOM | Exxon | $88.86 |
| SLG | SL Green | $64.44 |
| UPS | United Parcel Service | $178.04 |
| VZ | Verizon | $48.18 |
Abbvie (ABBV)
AbbVie (NYSE:ABBV), the biopharma behemoth, focuses on immunology and oncology. Its top-seller, Humira, currently makes up roughly half of AbbVie’s profits. This drug generated more than $17 billion in revenue last year.
Abbvie announced Q1 results on April. 29. Revenue increased 4.1% year over year to $13.54 billion. Adjusted diluted earnings per share (EPS) was $3.16, up 9% compared to $2.89 a year ago.
Although the drugmaker will be losing U.S. exclusivity for Humira in 2023, its newer drugs, Skyrizi and Rinvoq, have seen 64% and 54% year-over-year growth, respectively. Therefore, any bad news regarding Humira is likely to be already factored into the ABBV share price.
ABBV stock has gained more than 13% year to date. Beyond being one of the best dividend stocks to buy now ABBV is a dividend king. The company boasts a record of dividend increases for 50 consecutive years. AbbVie currently offers a robust 3.7% dividend yield.
Shares are trading at a reasonable valuation of 10.8 times forward earnings and 4.8 times sales. The 12-month median price forecast for Abbvie stock stands at $170.
Exxon Mobil (XOM)
Exxon (NYSE:XOM), one of the largest oil and gas companies globally is also among the best dividend stocks to buy. Management issued Q1 results on April 29.
Revenue soared 52% year over year to $87.7 billion. EPS came in at $1.28, compared to 64 cents a year ago. The oil giant generated free cash flow (FCF) of $10.8 billion, benefiting from a strong recovery in demand and rising oil prices.
In April, Exxon moved forward with its investment decision regarding the Yellowtail development, its fourth and largest offshore oil project in Guyana. The $10 billion project is forecast to produce 250,000 barrels of oil from 2025 onward.
Management has distributed $3.8 billion in dividends and repurchased $2.1 billion worth of shares during the quarter. This dividend aristocrat currently generates a 4.1% dividend yield.
To the delight of long-term shareholders, XOM stock has appreciated nearly 40% year to date. At present, shares are changing hands at 10.1 times forward earnings and 1.3 times sales. Meanwhile, the 12-month median price forecast for Exxon Mobil stock is at $98.
SL Green Realty (SLG)
SL Green (NYSE:SLG) is the biggest office landlord in Manhattan. This real estate investment trust (REIT) also boasts additional property exposure through its portfolio of premium retail space.
SL Green released Q1 results on April 20. Revenue declined 20% year over year to $187.96 million. Net income was 11 cents per share compared to a net loss of 12 cents per share for the same period a year ago. Funds from operations (FFO) came in at $1.65 per share, compared to $1.73 per share for the prior-year period.
Management has made its first large-scale acquisition in years and secured International Business Machines (NYSE:IBM) as an anchor tenant at its $2.3 billion One Madison Avenue development project.
SLG stock has declined more than 16% year to date. Still, the REIT supports a generous 5.9% dividend yield, making SLG stock attractive for income investors on this pullback.
At present, shares are trading at 68 times forward earnings and 6.1 times sales. And the 12-month median price forecast for SL Green stock stands at $79.
United Parcel Service (UPS)
United Parcel Service (NYSE:UPS) is the largest parcel delivery company in the world. Its international footprint makes it a leading industrial name, operating a vast fleet of over 500 planes and 100,000 vehicles.
UPS released Q1 results on April 26. Revenue grew by 6.4% year over year to $24.4 billion. Adjusted diluted EPS increased by 10% year over year to $3.05. FCF during the quarter stood at $3.92 billion.
Wall Street was pleased when management announced a 5.9% price hike in November 20221. Along with investments in efficiency, its significant pricing power has helped UPS grow its operating margin, despite rising inflation. For 2022, management expects an all-time high revenue of $102 billion.
Despite the positive news, UPS stock has dropped nearly 17% year to date. It currently supports a 3.4% dividend yield. The board plans $5.2 billion in dividend payments for fiscal 2022.
Shares are trading at 14.2 times forward earnings and 1.6 times sales. At present, the 12-month median price forecast for UPS stock is at $229.
Verizon Communications (VZ)
Verizon (NYSE:VZ) is the largest wireless provider in the U.S. with more than 91 million postpaid customers. By the end of 2022, the company expects to cover more than 175 million people with its 5G Ultra Wideband network.
The leading wireless provider released Q1 results on April 22. Revenue increased 2.1% year over year to $33.6 billion. Adjusted EPS of $1.35 was roughly flat year over year. Cash and equivalents ended the period at $3.23 billion.
Verizon is a solid play on the increasing adoption of 5G in the U.S. Total wireless service revenue grew 9.5% year over year to $18.3 billion. Verizon boasts the widest spectrum in the sub-6 gigahertz range.
VZ stock has lost a little more than 8% year to date. Meanwhile, the board has increased dividends for 15 consecutive years, which currently yields 5.2%.
Shares offer value at just 8.9 times forward earnings and 1.5 times trailing sales. Finally, the 12-month median price forecast for Verizon stands at $57.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.