Top Dividend Stocks for August 2022

Top Dividend Stocks for August 2022

So as of right now, the economy is doing very badly, which is causing the stock market to essentially crash falling by very large amounts. But one thing that we know for certain is that when stock prices go down dividend yields tend to go up, which I think makes this a great opportunity to start beefing up a dividend portfolio. 

So in today's article, I'm going to pick for you guys some of my absolute favorites dividend stocks not for the short term only for the long term. But at today's prices, and to make things even more fun and interesting.

I specifically choose two low-risk two medium-risk, and two high-risk dividend stocks to consider. So if you want recive dividend payments then check these stocks.

Low-Risks Stocks

#1. Number

So, let's start with low-risk options. One of those is going to be Pfizer($PFE), which is a very large pharmaceutical biotech that has been falling in price a bit hard lately currently down about 18%. From its highs. However, this dip, at least in my opinion, is almost entirely due to the broader market dragging it down, rather than their underlying business. 

Because if you really think about it, the stock is only up about 60% In the past five years, thanks to a sharp climb during the pandemic. And I just think that that's not nearly enough of a jump to compensate for the gigantic growth that the pepperoni pandemic has given their business. 

In fact, just their V shot alone has caused their sales and profits to both nearly double last year again, just from a single product for the pepperoni. That did close to 40 billion in sales out of the 81 billion total. Overall, it was revenue growth of close to 100% for the year.

And they're still expected to grow by another 27% this year, before finally correcting back down by about 21% in 2023. Obviously, that's because of predictions that the pepperoni will slowly go away and the V shots for it will not be needed as much. But even then you're still talking about double the sales that they did back in 2020 before the Shah was released.

So why is the stock falling when this is a company that has basically doubled in performance over that time, because as it stands Pfizer bio Entech and Maderna are reportedly making a collective profit of almost $100 million a day, just for that V shot alone every single day $100 million of actual profit. 

And you know what Pfizer is doing with all of that money, they're making giant acquisitions and building up a huge pipeline of products to make themselves even larger over time and less dependent on that pepperoni V shot. In fact, they recently acquired a Rena for $7 billion revival for half a billion dollars, and bio haven for a whopping $12 billion.

And their pipeline of future products has now grown to nearly 100. And because of the falling stock price, their dividend yield has now climbed above 3% with an excellent payout ratio of only around 30%, meaning that it's very safe long term. So when you couple that with the cheap valuation that is over 50% cheaper than the rest of the sector.

I just think it makes for a pretty low-risk dividend stock over the long term. And it's one of the reasons why I actually own this stock myself. 

#2. Number

Now for low-risk option number two, this stock that I do not currently own. But the more that I look into it, the more I am heavily tempted to buy it and that is the medical device giants known as Medtronic($MDT), and they make all kinds of different products and, serve virtually all kinds of treatments and therapy categories that you can think of, by providing different tools and devices.

You know, whether ranges from their famous pacemakers for cardiac treatment or their various surgical products that are used to increase safety and efficiency in surgical procedures. There are just a number of different applications that we could look at that Medtronic operates in.

But overall it's resulted in a very large company that usually does extremely well financially. However, the 2020 pandemic caused their sales and profits to fall by about 5% Because of the lockdowns that resulted in less traffic at hospitals, and thus a lower amount of their products being used and also just people not even wanting to go to hospitals people were just kind of staying home. 

Since then, though hospital traffic has been picking back up and sales have now returned to positive growth of around the mid-single-digit percentage once again. Yet because of the macro economy falling, coupled with a new fear over rising pepperoni rates, coupled with a broader stock market crash, the price of Medtronic stock has begun to plummet once again.

This time crashing by over 30% from its highs down to right around the 2020 lows that they saw a couple of years ago. Another reason for the crash though is because of the pandemic-related supply chain issues that caused her new surgical robotic system to get delayed.

But these are issues that I feel will slowly go away. And once they do, I think Medtronic should be in a great position to compete more heavily in various markets, including the gigantic surgical robotics market that is estimated to reach nearly $100 billion just by 2024 alone. 

According to allied markets research and according to Medtronic's own estimates, only about 3% of the current surgical market even uses robots to perform them. So this could be a huge, huge growth engine for them over the long term. Yet, despite those positives, the stock crash has actually caused the valuation to sink around 15 to 20% lower than the rest of the sector.

While their dividend has now climbed up to above a 3% yield, despite already having a gigantic growth history of over four decades in a row. And even here, it still has a low payout ratio below 50% with a nice growth rate to go along with it. And to my knowledge, I believe this is the first time in history that the yield has ever broken above 3%. 

So if history is anything to go by, then I think the stock may not be likely to hang around at these lower levels for much longer. And it's one of the reasons why I'm heavily considering buying this stock myself very soon. 

Medium-Risk Stocks

#1. Number

In my medium-risk options, stock number one, I'm gonna go with another stock that I do not currently own yet myself, but just like Medtronic, I'll probably be buying it very soon, especially the more that it falls. And that is the gigantic giant consumer staple conglomerate known as Unilever ($UL), 

Which is the company behind giant household brands like Ben and Jerry's Klondike Magnum and Breyers ice creams. They own Hellman's and Skippy condiments, they own Bertoli pasta, SlimFast diet foods, Lipton teas, close-up and Pepsodent toothpaste, Q tips, Degree, Vaseline, and Dove. AXE, lever 2000, Suave St. Ives lotions, and the list just goes on and on.

You guys probably use a lot of these brands yourselves, you know, on a day to day on a daily basis. Unfortunately, though, while the business is very large and profitable, it's left them without much growth and their financials can sometimes be up or down because of it, because of these legacy brands, you just typically don't get a huge amount of growth in it. 

And the result of that is that the stock price has become volatile. And after being dragged down with the rest of the market recently, it's even become negative by close to 20% in the past five years. Now, the good news, though, is that the valuation is now cheaper than the sector, despite their business being so much larger and dominant over competitors.

While also leaving them with a dividend yield that has risen above 4%, which is by the way higher than any other point in history dating all the way back to the great recession. And that's with a still pretty good payout ratio of only around 60%. Unfortunately, they don't have a huge growth history because the payout can sometimes fluctuate. 

But it's at least been trending upwards for decades and is already yielding a high amount anyway. And while there's a risk from the business being low growth during a weak macro economy, the company has longer-term potential in that over half of their business is actually done in emerging markets, which I really like about this company.

Because there's going to be larger growth over the long term. And they've also made a number of recent investments and acquisitions, in r&d, and in high-growth markets. For example, gummy vitamins that are becoming all the rage recently. And they did that with Olli and smarty pants, then there's also hydration with liquid IV that's a very popular brand these days, and then brain supplements with on it another very popular brand. 

And these high-growth brands should help them bring on more growth to their sales over time. They've even tried to shake things up internally by appointing activist investor Nelson Peltz to their board who is also joining their compensation committee to increase the accountability of management that are running the company.

Basically, management has to do a better job of running the company, and they're going to be, you know, overseen or you know, they're going to be watched by this activist investor, very famous one. So I just think that if you give it some time, this is a company that will fix its growth issues and becomes a more reliable dividend stock over the long term.

#2. Number

For option number two, though, I'm gonna go with the largest bank in the world that is not state-run. And that is the JP Morgan Chase ($JPM). And the balance between risk and value here is pretty easy to explain. The risk really comes from the simple fact that this is a finance and banking business. 

So you know that it can get badly damaged during a recession, when consumer and business spending plummets, which means that these entities are going to be taking out less loans, which is something that banks rely on to make money through interest. Or they may just not, they may just default on their loans and not pay them.

Because he can't make those payments. Either way, it's not good for banks. But while there is risk of a recession happening soon, if we're not already in one, I just don't think that it's enough to warrant the giant crash that we've been seeing in the stock lately. Because it's already fallen by almost 35% from its highs, and even if it was justified, which you could make the argument.

But even if it is, you know, even if we are in a risk, let's say worst case scenario, we are already in a recession. Well, I still think that JP Morgan Chase is much more likely to survive it and perform better long term than most other banks out there. Because, for example, take the 2020 recession, where the entire world economy was like literally shut down at times. 

And yet, Chase was still able to put up over 100 billion in sales, and almost 30 billion in profits. And then the following year, they managed to break new all-time record highs for both revenue and net income. That's pretty crazy. And even with how bad things are right now, they're still managing to grow sales by around 2%. 

This year, and another whopping 8% Plus is expected next year as well. And that's despite their already massive size, with by far the most market share as classified by deposits or as classified by assets, you know, you can pick either one and they're the market share leader. 

Yet despite that strong performance and massive size, the valuation is about the same or even cheaper, depending on the metric you're looking at, than the entire sector. And that's because of all the pessimism that is in the market right now, which is causing the cousing of the stock to crash. 

But as a result of that crash, the dividend has now climbed to a very attractive nearly three and a half percent, with an excellent payout ratio of only around 30%. And a very high growth rate of over 15%. It's really it's a, I'll say this, it's the only bank stock that I own myself. 

And I think I have a very good reason for choosing this one over the others. Because of the reasons that I've already explained and at these prices, I just think that it's a pretty solid pickup, even with the risks that are going on right now as long as I understand those risks, but I think I'm getting good value in return for it. 

High-Risk Stocks

#1. Number

In my high-risk stock options. And for these ones, I'm going with a couple of high-yielders. So we're going to get some higher yields on these ones. And that's going to make these dividend stocks pretty attractive at these levels. But the first one that I'm going to go with is going to be Verizon ($VZ).

Which is the telecommunications and Internet giant that really leads the pack out of the big three on both subscriber count and quality of service. When compared to ATT and T Mobile. Not only does Verizon hold more wireless phone subscribers than the other two not only do they have more fiber Internet subs, which is the fastest and most reliable option.

But they also won the network quality award for nearly three decades in a row. Unfortunately, though, the effects of a horrible macroeconomy with rising inflation is starting to take a toll on their business, which has caused them to lose 215,000 retail phone subscribers last quarter at a time when ATT actually gained some thanks to their new restructuring plans that have streamlined their business.

But that was largely offset by a gain of 227,000 business subscribers, which helped them manage to still increase their sales slightly in the quarter and over the longer term. I just think that Verizon's a higher quality of service will help them retain their lead over rivals. Meanwhile, the poor earnings report sunk the stock even lower as it is now down by over 30% from its highs and trading even lower than the 2020 market crash.

You can choose to look at this in a very pessimistic way and I wouldn't necessarily disagree with your logic especially considering the rising competition from T Mobile ATT and even some possible newcomers that could steal some market share. But overall, where others are seeing panic and disaster. 

I really wanna say I'm seeing opportunities here. And that's why I'm buying Verizon stock myself, because at these levels, the valuation is now close to 50% cheaper than the sector, and the dividend yield has climbed to almost 5.4% with an excellent payout ratio of less than 25%. 

Think that's off a little bit, though it's probably higher. But anyway, it's still a low, it's gonna be a low payout ratio, definitely below 50%. I think it's below 40%. Anyway, around these levels is a low payout ratio, and they've got a big growth history to go along with it with almost two decades in a row. 

At these levels, the yield is now higher than any other point dating back to the Great Recession. Like others on today's list, I think that history tells us that the stock price will need to go back up eventually to bounce that yield. And that's what I'm really hoping for myself. 

#2. Number

The high-risk option number two, and that's going to be 3M ($MMM), which is another stock that I already own myself. And the more that it falls, the more I want to add some more because this is a dividend king with a gigantic track record of growing their dividend for a mind-blowing 63 years in a row, by far the largest of any other stock on today's list. 

And yet the payout ratio is still pretty good at less than 60%. While the dividend increases now up to 4.44% .which at these levels, I believe it may be the highest that it's ever been. And it's definitely higher than even the great recession. Of course, the yield is So high, right now, because the stock has been crashing for some time and has already lost close to half of its entire value. 

However, the reason why I own the stock anyway is because most of the reasons for that crash are all I think temporary concerns see the thing about 3M is that they make and sell all kinds of different household industrial, automotive, electrical, and even healthcare-related products, many of which are super popular legacy brands. 

But the thing is that they're not very high growth, it's kind of a similar situation to what you see with like Unilever, for example. And this is especially the case during an economic downturn, like the one that we're currently in, or that we've gone through in the past. And as a result, 3M tends to go through these periods of like little to no growth, just like they did in 2019 and 2020 before they started to recover right after. 

But the underlying business is still being improved on as they deal with lingering lawsuits that will eventually pass while also using their large profits to reinvest back into the company for future growth and much-needed innovation. For example, they've been spending billions of dollars in recent years on research and development, which is helping them average close to 4000 new pens every single year.

Those pens should ideally turn into new products that will help them grow over time. And in the meantime, I get to collect a mouthwatering dividend on a value stock that is currently trading around 20% cheaper than the sector. So I just think that at these levels, it's worth the high risk for the high-value reward that I get in return. 

So these are my 6 dividend stocks to buy in 2022.