High-yielding dividend stocks have been some of the safest investments of 2022.
In fact, “The recent outperformance of dividend stocks is contrary to the traditional wisdom that they tend to lag the overall market in a rising-rate environment. This theory’s adherents think rate hikes make newly issued fixed-income products more attractive and reduce the appeal of stable income from equities. Some investors also argue that higher rates make it harder for companies to pay back debt, let alone sustain healthy dividend payouts. But neither argument holds up this year,” reported Institutional Investor.
Instead, it has again been proven that companies with attractive yields tend to outperform even the worst of markets over time, as I noted on Nov. 7. Now, with just weeks to go before we bid adieu to 2022, we wanted to take a look at some of the juiciest dividend stocks of the year. I think these high-yielding dividend stocks will continue to outperform in 2023.
|SPG||Simon Property Group||$117.18|
Simon Property Group (SPG)
While most of 2022 was miserable for dividend stocks such as Simon Property Group (NYSE:SPG), it’s a REIT well worth paying attention to. Indeed, with a solid yield of 6.1%, this $44 billion owner of shopping centers all around the world is worth a look.
While we often hear about the “death of the mall,” occupancy rates for U.S. malls and outlets jumped to 94.5% in the third quarter, as compared to 92.8% in the same quarter last year. Not only were occupancy rates rising, but so were rental rates. In fact, rent per sq. ft. was $54.80, as of Sept. from $53.91 year over year. Better, Simon Property Group says it’s on track to achieve pre-COVID occupancy by New Year 2023.
“The flight towards bricks and mortar is real,” CEO David Simon said, as quoted by Footwear News. “The returns on e-commerce just aren’t quite what everybody talked about.” In addition, since cutting its dividend in 2020, the company has raised its distribution six times since then, which tells us the company is on the mend.
Simon Property Group also just raised its 2022 guidance. The REIT now expects net income to fall in the range of $6.16 to $6.21 per diluted share. Additionally, it expects comparable FFO to be in a range of $11.83 to $11.88 per diluted share, which is an increase of 12 to 26 cents per diluted share.
AFC Gamma (AFCG)
Source: Dmitry Lobanov/Shutterstock.com
At the moment, AFC Gamma (NASDAQ:AFCG) carries a dividend yield of 13.2%. I expect that dividend to remain intact, especially with more states and countries throughout Europe looking to legalize cannabis for recreational and medicinal purposes. Additionally, I think federal legalization may be possible sooner than later, especially with such a large percentage of Americans in support of legalization.
AFC Gamma is not a landlord. Instead, the company provides financing, such as mortgage and construction loans, to help cannabis companies that typically can’t secure traditional financing from banks. The company currently holds 13 loans across 17 states. In its most recent quarter, the REIT reported net income of $11.5 million, a 45% increase year-over-year. Distributable earnings were also up to $11.8 million, a 64% year-over-year improvement.
Agree Realty (ADC)
Source: ShutterstockProfessional / Shutterstock.com
With a yield of 4.1%, Agree Realty (NYSE:ADC) is another interesting real estate company I’ve been focusing on. Much of this has to do with the company’s business model, which is aimed at acquiring and developing properties that are net leased to industry-leading omnichannel retail tenants. These tenants include the likes of blue-chip names such as Walmart (NYSE:WMT), Best Buy (NYSE:BBY), and Home Depot (NYSE:HD).
At the moment, this company has just under 36 million square feet of space it leases to those reliable investment-grade tenants. Better, as of September, the company acquired another 303 properties across 42 states for about $1.19 billion.
This company’s growing property portfolio has allowed it to recently increase its monthly dividend to 24 cents per share, which amounts to $2.88 per share annualized. Even more impressive are its recent earnings. In its second quarter, the company posted revenue of $104.9 million, as compared to expectations of $102.3 million. Agree also increased its full-year acquisition guidance to a new range of $1.5 billion to $1.7 billion.
Prologis (NYSE:PLD) is a warehouse REIT showing big signs of life again. At the moment, the REIT owns more than a billion square feet of real estate across 4,914 buildings in about 19 countries, with about $165 billion of assets under management. Better, the REIT has grown its dividend payout at a 12% compound annual rate over the last five years, making it among the top dividend stocks on my list right now. Currently, PLD stock yields 2.8%.
Prologis is benefiting from a massive gap between rental rates on existing leases, and current market rates. So, as leases expire, Prologis is able to sign new leases at higher rates. Accordingly, the company anticipates its effective same-store net operating income (SSNOI) could grow between 8% and 10% for the next few years.
Even better, the REIT is betting big on electric vehicles. Currently, Prologis is installing EV charging infrastructure in several large U.S. industrial markets. “Prologis is helping its customers transition their commercial fleets to zero emissions transportation, spanning heavy-duty trucks (18 wheels) to last-mile vans. With more than 1.2 billion square feet of logistics properties around the globe, deep development expertise, and relationships with some of the world’s largest brands, the company is uniquely positioned to help accelerate the adoption of electric fleets,” as noted by the company.
With strong demand, dependable dividends, and incredible earnings growth, Coca-Cola (NYSE:KO) may be one of the best dividend stocks to consider as a long-term investment.
Coca-Cola is also a dividend king, raising its dividend for the last 60+ years. This stock currently carries a yield of 2.9% and continues to be one of the safest stocks on the market. In addition, in its most recent quarter, the company posted earnings per share of 69 cents on sales of $11.1 billion. That’s up from the 65 cents on sales of $10 billion during the same quarter last year. Analysts were looking for 64 cents on sales of $10.5 billion.
For the year, the company expects revenue growth to fall in the range of 14% and 15%, which is higher than its initial forecast of 12% to 13%. Coca-Cola also raised its growth estimates on adjusted earnings per share to a new range of 6% to 7%, from 5% to 6%. As a show of faith in the company, director Herb Allen just bought 33,200 shares for $2 million. That’s reason enough for me to be bullish on this stalwart company.
Altria Group (MO)
Currently, Altria Group (NYSE:MO) carries a yield of 8.5%. But that’s not the most impressive item of note for this top high-yielding dividend stock.
Over the last 53 years, the company has raised its dividend 57 times, which makes it another Dividend King on this list. In fact, as of August, the company raised its dividend for the 57th time to $3.76 per share annually.
Granted, sales of cigarettes are on the decline. However, vaping and e-cigarette use is on the rise. In fact, about one in 20 Americans now vape, with product sales expected to hit $40 billion by 2023. This is a trend Altria can capitalize on, with the help of a partnership the company recently entered into with Japan Tobacco to develop smoke-free products.
Notably, Morgan Stanley (NYSE:MS) analyst Pamela Kaufman raised the firm’s target price on MO to $109 from $102, with an overweight rating.
With a yield of 6.5%, shares of Kohl’s (NYSE:KSS) are attractive as a contrarian bet. This is among the most beaten-down dividend stocks of the year thanks to sky-high inflation, consumer cutbacks, poor earnings, slashed guidance, and supply chain issues. But don’t write the stock off just yet. Most of these issues are only temporary, and the company may soon see a solid turnaround. Plus, should inflation start to cool off, even more retailers like Kohl’s could be set up for a strong come back.
One catalyst worth considering is that the company’s CEO just stepped down. Additionally, the company just announced preliminary earnings that were better than expected. Kohl’s now anticipates earnings per share to come in at 82 cents, as compared to expectations of 63 cents.
If that’s not an indication that this is a top dividend stock to buy this holiday season, I don’t know what is.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.