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Best stocks paying dividends for 2022

Dividend stocks can be a great addition to your investment portfolio, potentially providing an alternative source of income while you hold stocks and shares.

Find out about some of the biggest stocks paying dividends in this handy guide to dividend investing.

Please note: these picks are not personal recommendations or financial advice. Do not buy these investments solely based on what you read in this article.

20 top dividend stocks for 2022

  1. Altria Group Inc
  2. Annaly Capital Management Inc
  3. BHP
  4. Chevron Corporation
  5. The Coca-Cola Company
  6. Diageo
  7. Evraz
  8. GlaxoSmithKline
  9. Imperial Brands
  10. Johnson & Johnson
  1. The Kraft Heinz Company
  2. Legal & General
  3. Lumen Technologies Inc
  4. New Residential Investment Corp
  5. OneMain Holdings Inc
  6. Phoenix Group Holdings
  7. Rio Tinto
  8. Taylor Wimpey
  9. Universal Corp
  10. Verizon Communications
Best stocks paying dividends for 2022

1. Altria Group

Industry: Tobacco

Source: Nerd Wallet

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.54 3.00 3.28 3.40 3.52

Altria Group is a US-based tobacco company and the parent company of Philip Morris USA. The company produces and supplies its products internationally, including the world-famous Marlboro brand.

On the company’s website, Altria claims its target dividend payout ratio to be around 80% of adjusted earnings per share.

2. Annaly Capital Management

Industry: Financial services

Source: Investopedia

Year 2017 2018 2019 2020 2021
Dividend per share ($) 1.2 1.2 1.05 0.91 0.88

Annaly Capital Management is an investment management company primarily investing in commercial and residential property.

With a focus on mortgage-backed securities, Annaly Capital Management is one of the largest real estate investment trusts (REITs) in the world. The company boasts assets totalling around $89 billion, as of April 2022.

Alongside its property investments, the business also deals in residential credit and middle market lending.

3. BHP

Industry: Mining and metals

Source: IG

Year 2017 2018 2019 2020 2021
Dividend per share ($) 0.83 1.18 2.35 1.20 3.01

BHP is a mining and metals company, with a particular focus on commodities such as iron ore, copper, nickel, and coal.

While BHP’s business is known to be fairly carbon-intensive, the company’s website lays out a pledge for its products to assist in the transition to cleaner energy.

Although the company has its headquarters in Australia, its shares are still listed on the London Stock Exchange (LSE).

4. Chevron Corporation

Industry: Energy

Source: Nerd Wallet

Year 2017 2018 2019 2020 2021
Dividend per share ($) 4.32 4.48 4.76 5.16 5.31

Since being founded in 1879, American energy company Chevron Corporation now has operations and does business in more than 180 countries worldwide.

The company produces many kinds of energy products, from petrol, diesel, and aviation fuels, to base oil, fuel oil additives, and lubricants.

5. The Coca-Cola Company

Industry: Food and beverage

Source: Insider Monkey

Year 2017 2018 2019 2020 2021
Dividend per share ($) 1.48 1.56 1.60 1.64 1.68

One of the most well-known brands in history, the Coca-Cola Company is one of the leading global beverage companies. It famously owns and sells a variety of non-alcoholic household name drinks, most notably its namesake product, Coca-Cola.

The Coca-Cola Company has given out reliable dividend payments to its shareholders for almost 60 years.

6. Diageo

Industry: Food and beverage

Source: IG

Year 2017 2018 2019 2020 2021
Dividend per share (pence) 62.20 65.30 68.57 69.88 72.55

Diageo is among the world’s largest alcohol businesses, producing spirits and beers globally across more than 140 sites.

The business was founded and is headquartered in London, and now encompasses some of the biggest alcohol brands in the world, such as Guinness, Smirnoff, Johnnie Walker, and Baileys.

7. Evraz

Industry: Mining and metals

Source: IG

Year 2017 2018 2019 2020 2021
Dividend per share ($) 0.60 0.78 1.15 0.50 0.95

Headquartered in London with operations in Russia, the US, Canada, and Kazakhstan, Evraz is a mining and steel-making giant.

The company is renowned for its healthy dividends and even had the highest dividend yield on the whole FTSE 100 index for part of 2021.

8. GlaxoSmithKline

Industry: Healthcare and pharmaceuticals

Source: IG

Year 2017 2018 2019 2020 2021
Dividend per share (£) 0.80 0.80 0.80 0.80 0.80

GlaxoSmithKline (GSK) is a healthcare and pharmaceuticals company, recognised for its range of drugs, vaccines, and consumer healthcare products.

GSK was established after a significant merger deal between Glaxo Wellcome and SmithKline Beecham in 2000.

Generally, the company pays out quarterly dividends, with a dividend payout ratio that has been at 40% or higher each year for over a decade.

9. Imperial Brands

Industry: Tobacco

Source: IG

Year 2017 2018 2019 2020 2021
Dividend per share (pence) 170.72 187.79 206.57 137.71 139.08

Imperial Brands is one of the largest tobacco companies in the world, producing cigarettes, cigars, snuff, and rolling tobacco and papers.

The company is headquartered in the UK in Bristol and employs more than 30,000 people.

In general, Imperial Brands boasts a high dividend payout ratio – in fact, the company gave out a remarkable 87% of its revenues in dividends in 2020.

10. Johnson & Johnson

Industry: Healthcare and pharmaceuticals

Source: Yahoo Finance

Year 2017 2018 2019 2020 2021
Dividend per share ($) 3.32 3.54 3.75 3.98 4.19

Johnson & Johnson is an international healthcare and pharmaceuticals company, with headquarters in New Jersey in the US.

Among its wide variety of pharmaceutical products, medical devices, and consumer goods, Johnson & Johnson has been particularly newsworthy over the past couple of years thanks to the Covid-19 vaccine the company developed.

11. The Kraft Heinz Company

Industry: Food and beverage

Source: Insider Monkey

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.45 2.50 1.60 1.60 1.60

Created from a merger between Kraft Foods and Heinz in 2015, the Kraft Heinz Company is an American food company operating globally.

In fact, the company has been so successful that it now claims to be both the third-largest food and beverage company in the whole of North America, as well as the fifth-largest food and beverage company in the world.

Its brands include huge names such as HP Sauce, Weight Watchers, and Philadelphia.

12. Legal & General

Industry: Financial Services

Source: CMC Markets

Year 2017 2018 2019 2020 2021
Dividend per share (pence) 15.35 16.42 17.57 17.57 18.45

Legal & General is a financial services corporation based in London, with more than 10 million clients around the world.

The company provides a range of different financial services and products, from pensions, investments, and annuities, to mortgages and insurance.

13. Lumen Technologies

Industry: Telecommunications

Source: Investopedia

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.16 2.16 1.00 1.00 1.00

Lumen is a technology and communications company, providing an all-in-one platform for businesses to manage various elements of their comms.

The company delivers a range of communication services to its customers, including adaptive networking, connected security, edge computing, and a hybrid cloud to help businesses compete and participate in an everchanging technological landscape.

14. New Residential Investment Corp

Industry: Property

Source: Investopedia

Year 2017 2018 2019 2020 2021
Dividend per share ($) 1.98 2.00 2.00 0.50 0.90

As a real estate investment trust (REIT), New Residential Investment provides services and capital to the financial services and mortgage industries.

New Residential claims its investment portfolio to be difficult to be the most diversified across the market, incorporating mortgage-related assets, residential loans, non-agency securities, and other associated assets to provide a natural hedge to any investor’s portfolio.

15. OneMain Holdings

Industry: Financial services

Source: Investopedia

Year 2017 2018 2019 2020 2021
Dividend per share ($) 3.00 5.94 9.55

OneMain Holdings is a consumer finance business based in the US, with around 1,400 branches throughout the country.

The business largely targets customers who are unlikely to be given credit from mainstream credit card companies, banks, and other conventional creditors. This may be secured or unsecured personal loans, or one of its credit insurance products.

16. Phoenix Group Holdings

Industry: Financial services

Source: CMC Markets

Year 2017 2018 2019 2020 2021
Dividend per share (pence) 50.20 46 46.80 47.50 48.90

Based in the UK, Phoenix Group Holdings provides pensions and retirement savings products to around 13 million people.

The business has acquired many companies over the years and now markets itself as the leading savings and retirement business in the nation.

Phoenix Holding Group has reliably paid dividends twice a year to its investors since 2010.

17. Rio Tinto

Industry: Mining and metals

Source: CMC Markets

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.90 5.50 4.43 5.57 10.40

Rio Tinto is one of the world’s largest mining companies, seeking diamonds, iron ore, gold, uranium and copper, among others. The company has main offices in both London and Melbourne, and operates globally in 35 countries.

The company experienced its all-time highest interim profits through 2020 and 2021, mostly due to a rise in iron ore prices following the pandemic.

This meant that Rio Tinto was arguably the highest-paying stock – measured by dividends – on the whole FTSE 100 in early 2021.

18. Taylor Wimpey

Industry: Property

Source: CMC Markets

Year 2017 2018 2019 2020 2021
Dividend per share (pence) 4.74 6.24 7.64 4.14 8.58

Taylor Wimpey is among the UK’s leading housebuilding and construction corporations, providing everything from smaller, affordable housing to luxurious, detached homes.

The company was created in 2007 from a merger between Taylor Woodrow and George Wimpey, and is now headquartered in High Wycombe, Buckinghamshire.

The company also has a separate arm of the business operating in Spain.

19. Universal Corp

Industry: Tobacco

Source: Nerd Wallet

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.16 2.60 3.02 3.06 3.10

Universal Corporation is among the biggest tobacco sellers in the world, operating across more than 30 countries on five continents.

Rather than manufacturing tobacco products themselves, the business focuses on buying, processing, and packaging leaf tobacco on behalf of other companies such as Altria Group.

The company also claims to have started a sweet potato processing business, looking to expand its procurement and processing services.

20. Verizon Communications

Industry: Telecommunications

Source: Insider Monkey

Year 2017 2018 2019 2020 2021
Dividend per share ($) 2.335 2.385 2.435 2.485 2.535

A household name in the US, Verizon Communications is a telecommunications company headquartered in New York.

The company has built an enormous telecommunications network, employing more than 130,000 people, and claims to provide more than 30 million homes and 2 million businesses with internet services.

Bear in mind:

These companies do not necessarily have the highest dividend yields, but are selected for a range of factors including dividend growth, dividend payout ratio, dividend income, and dividend yield.

If you’re unsure whether you should buy these investments, please seek independent advice.

What are dividends?

Dividends are payments made to shareholders by a company, essentially as a reward for investing in them. These are typically paid out monthly, quarterly, annually, or in some cases bi-annually.

Generally, dividends are calculated based on important business metrics, such as a company’s earnings for the year.

Dividends can be paid out in several different forms, such as cash payments or as additional stocks.

Generally, you’re free to withdraw and take your dividends as income. Alternatively, you can reinvest the proceeds directly into more stocks and shares.

How can I invest in dividend stocks?

Building a portfolio of dividend stocks is an investment of time as well as money, but it has the potential to bring in a healthy income stream. Here’s how to invest in dividend stocks:

  1. Open a trading account
  2. Locate a stock that pays dividends
  3. Evaluate the value of the stock
  4. Decide how much stock you would like to purchase.

If you’d like to find the right platform and account for you, make sure you read my list of the best investment apps before you open your account.

Make sure you choose a platform or broker that’s authorised and regulated by the Financial Conduct Authority.

What is dividend investing?

Dividend investing is a tactic of deliberately targeting stocks that bring in an income when the companies pay out dividends to their shareholders. This type of investment can provide a regular, passive income.

Dividend stocks vs dividend funds

Rather than buying dividend stocks directly, you could consider investing in dividend funds instead.

Dividend funds are packages of investments that exclusively include dividend-paying stocks. This could be a mutual fund or even an exchange-traded fund (ETF). To invest in the fund, you simply buy units within it.

Buying funds can be more effective than buying individual stocks yourself, as it means only making one investment while gaining exposure to a variety of dividend stocks.

However, you may have to pay a management fee for a fund, which could increase your investing costs.

How do I find the best dividend stocks?

Finding the best dividend stocks for you is a case of doing your investment research into companies that suit your needs, checking whether they offer dividends, and then investing in them – it really is as simple as that!

If you truly have no idea where to start when looking for dividend stocks, the S&P 500’s Dividend Aristocrat Index can be a great springboard.

The Dividend Aristocrat Index is a stock market index of some of the most consistent dividend-paying companies listed on the S&P 500 in the US.

Companies on the index, known as “dividend aristocrats”, must meet strict criteria to be included. They must have:

  • A track record of paying dividends to their investors over a period of 25 years
  • Increased their dividend payout each year
  • At least $5 million in average daily trading value.

At the very least, investing in a dividend aristocrat means you can be fairly confident that you’re investing in a dependable dividend payer.

That said, things can change rapidly and even high-yield dividend stocks could potentially pull their dividend payouts in response to changing economic circumstances.

Dividend yields vs dividend growth

Dividend yields and growth are also important metrics to keep an eye on when choosing the best dividend stocks.

Just because a high dividend yield looks attractive, if this is static and not growing then it may indicate a company that isn’t confident in its future performance.

Meanwhile, a company showing dividend growth but a lower yield may be indicative of a company whose performance is accelerating.

This is where investing in dividend aristocrats can be useful – these stocks must increase their dividends to remain as an aristocrat, meaning growth is more likely.

Make sure you balance these two factors when investing in dividend stocks.

Do you always get dividends with shares?

While dividend-paying companies can be a great addition to your portfolio, it’s important to note that you don’t always get dividends with stocks and shares.

Make sure you check each stock’s details to determine whether the company you want to invest in does pay dividends. You can typically do this by searching for the company’s name or ticker code on your stockbroker or investment platform’s website.

What are the tax rules for dividend stocks?

One thing you’ll need to be aware of when investing in dividend stocks is that dividends are taxed separately to income or returns from investments.

Each tax year, you do have a Dividend Tax Allowance before you’ll owe tax on profits generated from dividends. In the 2022/23 tax year, this allowance is £2,000.

Any dividends paid above this amount could be subject to Dividend Tax, with the rate depending on which Income Tax band you fall in.

In the 2022/23 tax year, Dividend Tax rates are:

  • 8.75% for basic-rate taxpayers
  • 33.75% for higher-rate taxpayers
  • 39.35% for additional-rate taxpayers

Make sure you take note of Dividend Tax when investing in dividend stocks, as otherwise you may suddenly find yourself paying an unexpected tax bill.

Are dividend stocks a good investment?

Provided that it’s included as part of a diversified investment strategy, companies paying dividends can be a good investment.

A big benefit of dividend stocks is that you can choose what happens to the proceeds your investments generate.

For example, you could take the dividends you’ve received as profit and use them for whatever you’d like. This can be attractive for income investors.

Alternatively, you can reinvest them in your portfolio. This can see you benefit from compound returns – which is growth on growth.

As a result, dividend stocks can be a good investment, provided you include them as part of a diversified portfolio.

What are the highest paying dividend stocks?

Generally, the highest paying dividend stocks are companies that have a track record of long-term performance over many years and reliably pay out dividends to their investors.

You may notice trends across particular sectors and industries, too. Sectors that commonly have some dividend-paying companies include:

  • Fast-moving consumer goods (FMCG)
  • Financial services
  • Mining
  • Property
  • Technology
  • Tobacco.

Which dividend stocks does Warren Buffett recommend in 2022?

Investing titan Warren Buffett can be a good acid test for dividend stocks you might be considering.

See our list below for five dividend stocks Warren Buffett is reportedly backing in 2022:

1. Verizon Communications

2. The Kraft Heinz Company

3. U.S. Bancorp

4. Chevron Corporation

5. The Coca-Cola Company

What is the highest-paying dividend stock of all time?

While it doesn’t boast a particularly high yield, US water utility company, York Water, is arguably the greatest dividend stock of all time.

York Water has a record of more than 200 years of paying shareholders an annual dividend, dating all the way back to 1816. Today’s annual dividend yield sits at 1.83%, as of 14 April 2022.

While this may be a fairly modest dividend yield, statistics show that York Water has returned a remarkable 1,360% (including dividends) since the turn of the century.

Stocks paying dividends FAQs

What stock pays the highest dividends?

The stock that pays the highest dividend yields will change over time, depending on the performance of the broader market and how companies progress in certain economic circumstances.

Can you get rich from dividend stocks?

Yes, you could in theory “get rich” from dividend stocks. Of course, there’s still a risk you could lose money, even if a company’s dividend yield looks attractive.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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