Every time a bullish market commentator says things are fine, you can almost count on the market going into a tailspin. The stark reality is we are stuck in a trading range that is printing lower highs and lower lows, and that is typical in a bear market. In addition, with the Federal Reserve locked in on raising interest rates 75 basis points this month before taking a break until September, the market downtrend is likely to stay in place the rest of 2022 and into next year as well.
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So what is the plan? The best idea is to stay away from risky companies that make no money and are burning cash, and instead invest in dividend-paying companies that are dependable. Even with interest rates moving higher, they are still historically low. With inflation stripping bond yields to negative levels, dividend-paying stocks are still the way to go.

At 24/7 Wall St., we know how important dividend size, stability and growth are to growth and income investors that need a dependable stream of income. We often have written about the opportunities that the Dividend Aristocrats offer for long-term investors. These are the companies that meet the guidelines for inclusion and have raised their dividends every year for 25 consecutive years. In 2022, 66 stocks made the cut, and they remain top picks across Wall Street.

For those seeking even greater dividend dependability, investors may be drawn to the Dividend Kings. These are the 44 companies that have raised the dividends they pay to shareholders a stunning 50 consecutive years or longer. We screened the current Dividend Kings list for the seven highest yielding stocks, and we listed them in order of the biggest dividends. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Altria

This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.

Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In 2008, it spun off its international cigarette business to shareholders. The stock was pounded recently, as last month the U.S. Food and Drug Administration announced the ban of all sales of Juul vape pens. This decision was made after pleas from government officials and public health institutes that say Juul is focused on selling its nicotine products to teenagers. A court has granted Juul’s request for a stay on the ban, allowing the company to still sell the products while an appeal is made on the decision.

While this gets sorted out, it is a good bet that Altria stock investors still will receive an 8.67% dividend. Deutsche Bank has a $46 target price, but the consensus target is even higher at $52.33. The shares closed on Friday at $41.52.

While this company’s products, like Altria’s, may not be for everyone, it has strong demand and has been in business for almost 150 years. Universal Corp. (NYSE: UVV) processes and supplies leaf tobacco and plant-based ingredients worldwide. The company is involved in procuring, financing, processing, packing, storing and shipping leaf tobacco for sale to manufacturers of consumer tobacco products.
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The company contracts, purchases, processes and sells flue-cured, burley and oriental tobaccos that are primarily used in the manufacture of cigarettes. Its dark air-cured tobaccos principally are used in the manufacture of cigars, natural wrapped cigars and cigarillos, smokeless and pipe tobacco products. It also provides value-added services, including blending, chemical and physical testing of tobacco; service cutting for various manufacturers; manufacturing reconstituted leaf tobacco; just-in-time inventory management services; electronic nicotine delivery systems; and smoke testing services for customers.

In addition, Universal offers testing services for crop protection agents and tobacco constituents in seed, leaf and finished products, including e-cigarette liquids and vapors. Its analytical services include chemical compound testing in finished tobacco products and mainstream smoke. Further, it provides various value-added manufacturing processes to produce specialty vegetable and fruit-based ingredients for the food and beverage end markets, as well as provides water pipe style leaf tobacco. And it recycles waste materials from tobacco production.

Investors receive a 5.96% dividend. There is a Buy rating listed, but we could not confirm which Wall Street firm has it. We did find that Blackrock owns a stunning 16% of the shares. Over the past year, the stock has traded between $46.24 and $64.13. The shares closed on Friday at $53.06, down almost 10% on the day, but they rallied back some in after-market trading on no news that we could find.

Leggett & Platt

While somewhat off the radar, this stock has almost been cut in half over the past year and offers massive upside potential. Leggett & Platt Inc. (NYSE: LEG) designs, manufactures and markets engineered components and products worldwide.

The company offers steel rods, drawn wires, foam chemicals and additives, innersprings, specialty foams, private label finished mattresses, mattress foundations, wire forms for mattress foundations, adjustable beds, industrial sewing and quilting machines, and mattress packaging and glue drying equipment, as well as machines to produce innersprings for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores and home improvement centers.
Leggett & Platt also provides mechanical and pneumatic lumbar support and massage systems for automotive seating; seat suspension systems, motors and actuators and cables; titanium, nickel and stainless-steel tubing, formed tubes, tube assemblies and flexible joint components for fluid conveyance systems; and engineered hydraulic cylinders to automobile original equipment manufacturers (OEMs) and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs.

Investors receive a 4.89% dividend. The Goldman Sachs target price on Leggett & Platt stock is $43, the same as the consensus target. The shares closed at $35.97 on Friday.
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This top company could really benefit from continued economic pick-up, and the shares are down big this year. 3M Co. (NYSE: MMM) operates as a diversified technology company worldwide. It operates through the following four segments.

The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; auto body repair solutions; closure systems for personal hygiene products, masking and packaging materials; electrical products and materials for construction and maintenance, power distribution and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye and fall protection solutions; and natural and color-coated mineral granules for shingles.

The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway and vehicle safety.

The Health Care segment offers food safety indicator solutions; health care procedure coding and reimbursement software; skin, wound care and infection prevention products and solutions; dentistry and orthodontic solutions; and filtration and purification systems.

The Consumer segment provides consumer bandages, braces, supports and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging and consumer air quality solutions; and stationery products.

Shareholders receive a 4.63% dividend. Deutsche Bank’s $167 target price compares with a $151.35 consensus target. 3M stock closed on Friday at $128.72.

While real estate has come back strongly, demand is still growing and hard assets are good in inflationary times. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Boston to Washington, as well as San Francisco and Los Angeles.
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Founded in 1962, Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland, and Assembly Row in Somerville, Massachusetts.

Federal Realty’s 105 properties include approximately 3,000 tenants in 24 million square feet and over 2,600 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 52 consecutive years, the longest record in the real estate investment trust industry.

Unitholders receive a 4.42% distribution. The $140 Raymond James price target is well above the consensus target of $126.00. The shares closed on Friday at $118.28.

AbbVie

This is a top pharmaceutical stock pick across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.

One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of 2020.

AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.

AbbVie stock comes with a 3.69% dividend. Wells Fargo has set a Wall Street high target price of $200. The consensus target is $163.01, and the stock closed on Friday at $152.35.

This consumer staples leader is another safe bet for nervous investors. Kimberly-Clark Corp. (NYSE: KMB) manufactures and markets personal care and consumer tissue products worldwide. It operates through the following three segments.
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The Personal Care segment offers disposable diapers, swim pants, training and youth pants, baby wipes, feminine and incontinence care products, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Depend, Plenitud, Softex, Poise and other brands.

The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve and other brands.

The K-C Professional segment offers wipers, tissues, towels, apparel, soaps and sanitizers under the Kleenex, Scott, WypAll, Kimtech and KleenGuard brands.

The company sells its household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce. It sells away-from-home use products directly to manufacturing, lodging, office building, food service and public facilities, as well as through distributors and e-commerce.

Shareholders receive a 3.46% dividend. The target price at Jefferies is $146. The consensus target for Kimberly-Clark stock is $132.69. The final trade Friday was reported at $134.20.

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The best suggestion for investors now is to stay in these safe, big-dividend companies that have a leading position in their respective sectors, until the Federal Reserve lowers the inflation rate and we see enough stock market damage to stop raising rates. There is a very good chance that could take a year or longer. With second-quarter earnings reporting starting up big this week, it may make sense to buy partial positions and see how the results come in for these leading large-cap leaders.

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