13 Best Long-Term Dividend Stocks to Buy Now
In this article, we discuss 13 best long-term dividend stocks to buy now. You can skip our detailed analysis of dividend investing in the current market environment, and go directly to read 5 Best Long-Term Dividend Stocks to Buy Now.
Investor confidence has been shattered this year due to rising interest rates and an all-time high inflation. According to a survey conducted by the American Association of Individual Investors this October, the bullish stance on the market decreased by 3.6 percentage points to 20.4%. Optimism on the market condition is below its historical average for the 47th consecutive week.
In view of the current economic landscape, the risk of a global recession is rising. The trend of increasing interest rates will likely continue next year as well, according to World Bank. In this regard, dividend stocks are in the limelight as they have helped investors through previous periods of economic decline. According to a report by S&P Global, dividend growth rate has outpaced inflation rate over the years. In the past 15 years ending August 2022, the average dividend growth rate was recorded at 13.71%, compared with a 2.21% growth in the Consumer Price Index (CPI) during the same period. The report also refers to research by IHS Markit, mentioning that the year-over-year dividend growth for the next four quarters is expected to be at 6.7%.
Dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG) offer long-term investment options to income investors. These stocks not only have solid dividend growth track records but also have stable cash flows to fulfill their shareholder obligation. In view of this, we will discuss the best long-term dividend stocks to buy now.
Photo by Austin Distel on Unsplash
Our Methodology:
We selected these stocks after meticulous research about their fundamentals. These stocks are good for long-term investments as they have sound financial positions, solid balance sheets, and stable dividend payments. They are ranked according to their dividend yields, as recorded on October 19.
13 Best Long-Term Dividend Stocks to Buy Now
13. Roper Technologies, Inc. (NYSE:ROP)
Dividend Yield as of October 19: 0.66%
Roper Technologies, Inc. (NYSE:ROP) is a Florida-based multinational software company that offers services to customers in over 100 countries. The company posted strong results in Q2 2022, with its revenue of $1.31 billion showing a 10.1% growth from the same period last year. At the end of June, it had over $2.8 billion available in cash and cash equivalents, compared with $351 million six months ago.
Roper Technologies, Inc. (NYSE:ROP) is one of the best dividend stocks on our list as it holds a 31-year track record of consistent dividend growth. It currently offers $0.62 per share in quarterly dividends for a dividend yield of 0.66%, as recorded on October 19. In the last five years, the company has raised its dividends at a CAGR of 12.41%.
In August, Bernstein initiated its coverage of Roper Technologies, Inc. (NYSE:ROP) with a Market Perform rating and a $490 price target, highlighting the company’s industrial businesses.
The number of hedge funds tracked by Insider Monkey owning stakes in Roper Technologies, Inc. (NYSE:ROP) increased to 48 in Q2 2022, from 38 a quarter earlier. These stakes have a total value of over $1.7 billion. With over 1.6 million shares, Akre Capital Management was the company’s leading stakeholder in Q2.
In addition to some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), Roper Technologies, Inc. (NYSE:ROP) is also a good option for long-term investment.
Weitz Investment Management mentioned Roper Technologies, Inc. (NYSE:ROP) in its Q2 2022 investor letter. Here is what the firm has to say:
“Consistent with that approach, portfolio activity among our long holdings tilted toward purchases. We added to almost half our holdings by varying degrees, and we were pleased to initiate new positions in Roper Technologies (NYSE:ROP) at attractive prices. Originally an industrial equipment manufacturer, Roper has successfully evolved into a provider of software and technology services. (Investors can find an in-depth discussion of our Roper Technologies investment thesis in colleague Barton Hooper’s November 2021 “Analyst Corner” feature.) The business generate significant free cash flow, possess strong competitive positions, and have excellent management teams with demonstrated acquisition records.”
12. The Sherwin-Williams Company (NYSE:SHW)
Dividend Yield as of October 19: 1.13%
The Sherwin-Williams Company (NYSE:SHW) is one of America's leading paint and coating manufacturing companies. In October, Goldman Sachs initiated its coverage on the stock with a Buy rating and a $280 price target as the firm presented a positive outlook on the defensive stocks. The firm also highlighted the company's strength in its paint store franchise and the quality of its earnings growth.
In Q2 2022, The Sherwin-Williams Company (NYSE:SHW) generated sufficient cash to support its shareholder return. The company's operating cash flow grew to $613.4 million, from $26.3 million in the previous quarter. The company paid nearly $1 billion in dividends and share repurchases during the first six months of the year. It generated $484 million in free cash flow in Q2.
The Sherwin-Williams Company (NYSE:SHW) has been raising its dividends consistently for the past 43 years, which makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.60 per share and has a dividend yield of 1.13%, as of October 19.
At the end of Q2 2022, 52 hedge funds tracked by Insider Monkey owned stakes in The Sherwin-Williams Company (NYSE:SHW), compared with 54 in the previous quarter. The collective value of these stakes is over $1.86 billion. Chilton Investment Company was the company’s leading stakeholder in Q2.
ClearBridge Investments mentioned The Sherwin-Williams Company (NYSE:SHW) in its Q2 2022 investor letter. Here is what the firm has to say:
“Rounding out our risk-focused stance, we believe the addition of Sherwin-Williams (NYSE:SHW), a manufacturer of paints and coatings for professional, industrial and retail customers, adds further resilience in the current inflationary environment. Paint is a relatively small part of total project input costs which can be passed through with price during inflation, and the company has a track record of successfully managing through periods of increased commodity costs. We are attracted to the company’s durability of growth by operating a strong franchise with both organic growth and consolidation amassing a strong portfolio of brands. We like Sherwin-Williams over competitors in the paint industry due to higher volumes, a domestically focused revenue base and strong relationships with the home builder and pro community. We believe the company will be able to keep pricing and expand margins as commodity pressures ease.”
11. Eli Lilly and Company (NYSE:LLY)
Dividend Yield as of October 19: 1.17%
Eli Lilly and Company (NYSE:LLY) is an Indiana-based pharmaceutical company that has operations in over 18 countries. The company is majorly known for its diabetes drugs. Since the start of 2022, the stock delivered a 20.1% return to shareholders while its 12-month returns came in at 34.7%, as of the close of October 18.
Eli Lilly and Company (NYSE:LLY) is one of the oldest dividend players in the market, making uninterrupted dividend payments since 1885. Moreover, it has been raising its payouts consistently for the past eight years, which contributes to its popularity as one of the best dividend stocks. The company currently pays a quarterly dividend of $0.98 per share, with a dividend yield of 1.17%, as of October 19.
In the second quarter of 2022, Eli Lilly and Company (NYSE:LLY) posted a revenue of $6.4 billion and its operating income came in at $1.6 billion. The company's operating cash flow stood at $820.7 million and it generated $370 million in free cash flow. Remaining committed to its shareholder obligation, the company's dividend showed a 15% year-over-year growth.
In September, Cantor Fitzgerald raised its price target on Eli Lilly and Company (NYSE:LLY) to $360 and kept an Overweight rating on the shares, acknowledging the company’s recent successful data on Alzheimer’s disease.
At the end of q2 2022, the number of hedge funds tracked by Insider Monkey owning stakes in Eli Lilly and Company (NYSE:LLY) jumped to 70, from 53 in the previous quarter. These stakes have a consolidated value of over $6.7 billion. With nearly $2 billion worth of stakes, Fisher Asset Management owned the largest position in the company in Q2.
Baron Funds mentioned Eli Lilly and Company (NYSE:LLY) in its recently-published Q3 2022 investor letter. Here is what the firm has to say:
“In pharmaceuticals, our largest investment is in Eli Lilly and Company (NYSE:LLY). Lilly’s new diabetes drug Mounjaro is off to a strong start. In addition, Mounjaro may be approved for obesity next year. In clinical trials, Mounjaro delivered up to 22.5% average weight loss in adults with obesity and has the potential to be a top-selling drug. Lilly also has a drug in development for Alzheimer’s disease in the same class as Lecanemab, a drug being developed by Biogen and Eisai that slowed the rate of cognitive decline in a late-stage clinical trial. Lilly is not facing any significant near-term patent expirations and we think the company should be able to grow revenue and earnings at attractive rates through the end of the decade and beyond.”
10. Waste Management, Inc. (NYSE:WM)
Dividend Yield as of October 19: 1.61%
Waste Management, Inc. (NYSE:WM) is a Texas-based comprehensive waste and environmental services company. The company generated over $1.05 billion in operating cash flow during Q2 2022, compared with $1.04 billion in the prior-year quarter. Its free cash flow amounted to $503 million and it paid $269 million to shareholders in dividends. This shows that the company's cash flow generation is stable for its dividend payments.
Waste Management, Inc. (NYSE:WM) pays a quarterly dividend of $0.65 per share with a dividend yield of 1.61%, as of October 19. The company has been growing its dividends consistently for the past 15 years, which places it as one of the best dividend stocks on our list. It has raised its dividends at a CAGR of 6% in the past five years.
In October, Stifel maintained its Buy rating on Waste Management, Inc. (NYSE:WM), appreciating the company's pricing and volume outlook.
According to Insider Monkey’s data, 37 hedge funds invested in Waste Management, Inc. (NYSE:WM) in Q2 2022, compared with 40 in the previous quarter. These investments hold a collective value of over $3.7 billion. With 18.6 million shares, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q2.
Diamond Hill Capital mentioned Waste Management, Inc. (NYSE:WM) in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Waste Management (NYSE:WM), one of the largest providers of waste collection services in the US. We believe it is a high-quality business with ownership of key landfill assets that provide pricing power over the long term. Its stock was trading at a discount to our estimate of intrinsic value due to short-term market concerns over an increase in growth investments—we expect these investments to be value-creating over the long term.”
9. Walmart Inc. (NYSE:WMT)
Dividend Yield as of October 19: 1.67%
Walmart Inc. (NYSE:WMT) is one of the leading retail corporations in the world. The company mainly operates a chain of hypermarkets, departmental stores, and grocery stores. In October, Jefferies raised its price target on the stock to $165 with a Buy rating on the shares, calling the company a value leader in retail. The firm said that the company is well-positioned in the current environment.
Walmart Inc. (NYSE:WMT) currently pays a quarterly dividend of $0.56 per share. In 2022, the company marked its 49th consecutive year of dividend growth. As of October 19, the company's shares have a yield of 1.67%.
Walmart Inc. (NYSE:WMT) was a popular buy among elite funds in Q2 2022, as 67 hedge funds tracked by Insider Monkey owned positions in it, up from 60 a quarter earlier. The stakes owned by these hedge funds have a total value of over $3.78 billion.
Leaven Partners mentioned Walmart Inc. (NYSE:WMT) in its Q3 2022 investor letter. Here is what the firm has to say:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Walmart (NYSE:WMT), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
8. Chubb Limited (NYSE:CB)
Dividend Yield as of October 19: 1.67%
Chubb Limited (NYSE:CB) provides property, health, and reinsurance services to its consumers. The company is headquartered in Zurich. It is one of the best dividend stocks on our list as it has been raising its dividends consistently for the past 29 years. It currently pays a quarterly dividend of $0.83 per share, with a dividend yield of 1.67%, as of October 19.
In the second quarter of 2022, Chubb Limited (NYSE:CB) reported an operating cash flow of $2.7 billion, up from $2.4 billion from the previous quarter. Its commitment to shareholders remained strong during the quarter, as it paid $1.48 billion to investors, with dividends amounting to $348 million.
In October, Jefferies maintained a Buy rating on Chubb Limited (NYSE:CB) with a $218 price target, appreciating the company's management and its pricing power.
As of the close of Q2 2022, 35 hedge funds in Insider Monkey’s database owned stakes in Chubb Limited (NYSE:CB), up from 31 in the previous quarter. The collective value of these stakes is over $1.68 billion. Viking Global owned the largest position in the company, holding shares worth $742 million.
Aristotle Capital Management mentioned Chubb Limited (NYSE:CB) in its Q1 2022 investor letter. Here is what the firm has to say:
“Our investment in Chubb began in the fourth quarter of 2015, shortly after ACE Limited announced it would acquire the Chubb Corporation, creating the largest global property and casualty insurance company by underwriting income. During our nearly seven-year holding period, the company’s combination progressed leading to the realization of main catalysts we had identified. These included cost savings, broadened product offerings and an expanded customer base, as well as enhanced distribution capabilities and improved pricing due to scale. In addition, Chubb successfully grew its profitable high-net-worth personal lines. While we still consider Chubb to be a high-quality business, few catalysts remain after what was, in our opinion, a remarkable run of successful business execution. As such, we decided to step aside in favor of what we believe to be a more optimal investment in Blackstone.”
7. Archer-Daniels-Midland Company (NYSE:ADM)
Dividend Yield as of October 19: 1.82%
Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational food processing company that deals in ingredients and flavors for food and beverages. The company operates over 270 food processing plants worldwide. The stock is outperforming the broad market in 2022 so far, delivering a 30.08% return to shareholders. Its 12-month return stood at 36.8%, as of the market close of October 18.
Archer-Daniels-Midland Company (NYSE:ADM) reported a strong cash position in the second quarter of 2022. The company reported an operating cash flow of $531 million and generated $248 million in free cash flow. It ended the quarter with $906 million available in cash and cash equivalents.
Archer-Daniels-Midland Company (NYSE:ADM) has been paying consistent dividends to shareholders for the past 90 years, coming through as one of the best dividend stocks. Moreover, the company has raised its payouts for the past consecutive 49 years. It offers a quarterly payout of $0.40 per share, with a dividend yield of 1.82%, as of October 19.
In August, Wolfe Research initiated its coverage of Archer-Daniels-Midland Company (NYSE:ADM) with an Outperform rating and a $117 price target. The firm highlighted the company's balance sheet and its consistent dividend growth.
Archer-Daniels-Midland Company (NYSE:ADM) was a part of 42 hedge fund portfolios in Q2 2022, the same as in the previous quarter, as per Insider Monkey’s data. The stakes owned by these hedge funds have a consolidated value of nearly $659 million.
Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
6. Colgate-Palmolive Company (NYSE:CL)
Dividend Yield as of October 19: 2.23%
Colgate-Palmolive Company (NYSE:CL) specializes in the production and distribution of healthcare, household, and personal care products. The company was a popular stock among elite funds in Q2 2022, as 55 hedge funds in Insider Monkey's database owned stakes in the stock, up from 50 a quarter earlier. These stakes have a total value of nearly $3 billion.
In Q2 2022, Colgate-Palmolive Company (NYSE:CL) reported a 9% year-over-year growth in its organic sales. The company's business remained strong during the quarter as it generated stable cash. Its free cash flow came in at $350 million, compared with $264 million in the preceding quarter. Its operating cash flow also grew to $528 million, from $386 million in Q1 2022.
Colgate-Palmolive Company (NYSE:CL) currently pays a quarterly dividend of $0.47 per share, raising it from $0.45 in March. The company maintains a 60-year track record of dividend growth. In the past five years, it has raised its dividends at a CAGR of 3.09%. As of October 19, the stock has a yield of 2.23%.
In October, JPMorgan upgraded Colgate-Palmolive Company (NYSE:CL) to Overweight with a $79 price target. The firm mentioned that CL will be able to keep pricing power while managing costs. The firm also expects the company to report growth earnings in high-single-digits in 2023.
Colgate-Palmolive Company (NYSE:CL) is also catching investors' attention alongside some of the best dividend stocks like The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG)
First Eagle Investments mentioned Colgate-Palmolive Company (NYSE:CL) in its Q2 2022 investor letter. Here is what the firm has to say:
“Shares of consumer staples giant Colgate-Palmolive have performed well as investors rotated into more recessionary-resilient defensive stocks amid the broader selloff during the second quarter. The company raised revenue guidance for 2022 but lowered its margin outlook because of higher costs for raw materials, packaging and logistics; we believe that the company’s size and market share provide it with options to mitigate the inflation challenges it faces. We continue to like Colgate- Palmolive’s dividend and previously announced $5 billion stock buyback program.”
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Disclosure. None. 13 Best Long-Term Dividend Stocks to Buy Now is originally published on Insider Monkey.
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