In this article, we discuss the best dividend stocks according to Jim Cramer. You can skip our in-depth analysis of Cramer’s market forecasts and read straight through The 5 Best Dividend Stocks According to Jim Cramer.
The investment landscape has changed widely this year, as fears of a recession are pulling investors toward previously overlooked defensive securities. CNBC’s “Mad Money” host Jim Cramer advises investors to invest in profitable companies with strong shareholder returns. In addition, he also talked about loading up on high-yielding dividend stocks on one of his shows in late September.
In one of his last shows in October, Cramer noted that tech stocks have fallen this year due to tighter monetary policy. However, the decline in technology stocks opens up new investment opportunities for investors seeking refuge in other sectors. According to Cramer, some industries investors should focus on include fossil fuels, healthcare, travel, defense, and food and beverage.
According to Kramer, this year’s continuous interest rate increases indicate that the trend will continue for the rest of the year. This ultimately increases the risks of a possible recession. He further noted that while rapidly rising Treasury yields are putting pressure on dividend stocks, they still offer better investment opportunities than the rest of the market. He noted that investors should build their positions in dividends continuously to maximize profits.
Dividend stocks have become increasingly popular with investors this year as many companies have recovered and increased payouts following the 2020 pandemic. Cash dividends within the S&P 500 set record payouts in the third quarter, according to S&P Dow Jones Indices’ third-quarter report. 8.5% increase compared to the same period last year. The report also emphasized that dividends are expected to reach record levels in the next quarter. Some of the most popular dividend stocks include Carlisle Companies Incorporated (NYSE:CSL), Medtronic plc (NYSE:MDT), and The Coca-Cola Company (NYSE:KO) as they have long raised their dividends.
With the above arguments in mind and to further expand on Cramer’s investment strategy, we will discuss the best dividend stocks according to Jim Cramer.
Our methodology:
We have selected dividend stocks from some of Jim Cramer’s recent programs that recommend these securities. These stocks are ranked by dividend yield as of November 24.
The best dividend stocks according to Jim Cramer
10. Archer-Daniels-Midland Company (NYSE:ADM)
Dividend yield as of December 2: 1.76% Archer-Daniels-Midland Company (NYSE:ADM) is an American food processing company with more than 270 food processing plants worldwide. In the third quarter of 2022, the company paid out $677 million in dividends to shareholders, placing it as one of the best dividend stocks on our list. Moreover, it has consistently increased its dividend for the past 49 years. The company currently pays a dividend of $0.40 per share and has a dividend yield of 1.76% as of December 2nd. On one of his shows in August this year, Kramer recommended Archer-Daniels-Midland Company (NYSE:ADM). its consistent dividend growth and called the stock one of its favorites for the rest of 2022. At the end of 2022Q3, 37 hedge funds tracked by Insider Monkey reported holdings compared to Archer-Daniels-Midland Company (NYSE:ADM). 42 in the previous quarter. These stakes are collectively valued at approximately $600 million. Archer-Daniels-Midland Company ( NYSE:ADM ) is one of the best dividend stocks to consider, along with Carlisle Companies Incorporated ( NYSE:CSL ) , Medtronic plc ( NYSE:MDT ) , and The Coca-Cola Company ( NYSE:KO ) . Diamond Hill Capital covered Archer-Daniels-Midland Company (NYSE:ADM) in an investor letter in Q1 2022. Here’s what the firm says:
“ADM is a leading agricultural product 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 (unfortunately) benefited from the war in Ukraine, as grain prices and agricultural markets experienced strong price increases globally. ADM is well positioned to benefit from volatility due to its stable North American agricultural base.
9. Coterra Energy Inc. (NYSE:CTRA)
Dividend yield as of December 2: 2.15%
Coterra Energy Inc. (NYSE:CTRA) is a Texas-based energy company engaged in hydrocarbon exploration. The company has consistently increased its dividend over the past six years with a 5-year CAGR of 32.6%. The company’s strong dividend growth makes it one of the best dividend stocks on our list. It currently pays a quarterly dividend of $0.68 per share and has a dividend yield of 2.15% as of December 2nd.
Cramer recommended Coterra Energy Inc. (NYSE:CTRA) while discussing Morgan Stanley’s “Year of Earnings” report. He highlighted the company’s annual dividend yield and dividend growth over the years.
In the 3rd quarter of 2022, Coterra Energy Inc. (NYSE:CTRA) reported revenue of $2.52 billion, a 472.2% increase over the same period last year. The company generated more than $1.7 billion in operating cash flow, and its free cash flow was $1.5 billion.
At the end of September 2022, 39 hedge funds tracked by Insider Monkey held stakes in Coterra Energy Inc. (NYSE:CTRA), down from 40 for the previous quarter. These shares are estimated at a total value of 400 million dollars.
Palm Valley Capital Management mentioned Coterra Energy Inc. (NYSE:CTRA) in an investor letter in Q2 2022. Here’s what the firm says:
“We sold two Fund positions during the quarter, including Coterra Energy (NYSE: CTRA). As a result of rising oil and natural gas prices, Coterra reached our valuation and we exited the position in April.
8. The Coca-Cola Company (NYSE:KO)
Dividend yield as of December 2: 2.75% The Coca-Cola Company (NYSE:KO) is an American multinational beverage company that sells and manufactures soft drinks and syrups. Cramer recommended the stock earlier this year due to its defensive nature and consistent dividend. He further noted that KO is a recession-proof business and a buy for the rest of the year. The Coca-Cola Company (NYSE:KO) has a strong balance sheet, as the company generated $8.1 billion in operating cash flow in the first nine months. The company’s free cash flow during the period was 7.3 billion dollars. The Coca-Cola Company (NYSE:KO) has made consistent dividend payments since 1920 and has increased its payout for 60 consecutive years. This makes the company one of the best dividend stocks on our list. The stock’s dividend yield as of December 2 is 2.75%. At the end of the third quarter of 2022, Berkshire Hathaway was the largest shareholder of The Coca-Cola Company (NYSE:KO) with 400 million shares. In total, 59 hedge funds in Insider Monkey’s database had stakes in the company worth more than $25 billion in the 3rd quarter. Carillon Tower Advisors mentioned The Coca-Cola Company (NYSE:KO) in an investor letter in Q3 2022. Here’s what the firm says:
“Shares The Coca-Cola Company ( NYSE:KO ) sold off along with consumer staples even as the company reported strong second-quarter earnings. Average commodity prices rose as management signaled further acceleration.”
7. Best Buy Co., Inc. (NYSE:BBY)
Dividend yield as of December 2: 4.06%
Best Buy Co., Inc. (NYSE:BBY) is an American multinational consumer electronics retailer based in Minnesota. The company is one of the best dividend stocks on our list, as it has increased its payout for nine consecutive years. It currently offers $0.88 per share in quarterly dividends as of December 2, with a dividend yield of 4.06%. Cramer recommended BBY earlier this year because of the company’s dividend growth. In one of his recent shows, Cramer gave a positive opinion about the company.
In the 3rd quarter of 2022, Best Buy Co., Inc. (NYSE:BBY) posted EPS of $1.38 and revenue of $10.59 billion, beating estimates by $0.36 and $290 million, respectively. The company had $932 million in cash and cash equivalents at the end of the quarter and total assets of $17 billion.
Wedbush, Best Buy Co., Inc. (NYSE:BBY) raised his price target on the stock to $85 in November with a Neutral rating, praising the company’s Q3 earnings, its guidance and overall performance this year.
Best Buy Co., Inc. (NYSE:BBY) was part of 31 hedge fund portfolios in 3Q2022, up from 26 in the previous quarter, according to data from Insider Monkey. The total value of shares belonging to these funds is 296.8 million dollars.
6. Ford Motor Company (NYSE:F)
Dividend yield as of December 2: 4.33%
Ford Motor Company (NYSE:F) is an American multinational automobile company that sells automobiles and commercial vehicles. In October, Morgan Stanley maintained its overweight rating and $14 price target per share, citing the company’s strong cash generation.
Cramer’s Charitable Trust owns shares of Ford Motor Company (NYSE:F), and the analyst gave the stock its stamp of approval in September due to its high dividend yield.
Ford Motor Company (NYSE:F)’s cash position in Q3 2022 was flat. Operating cash flow for the quarter was $3.8 billion, generating $3.6 billion in free cash flow. The company’s revenue was 37.2 billion dollars, which showed an increase of 12% compared to the same period last year.
Ford Motor Company (NYSE:F) currently pays a quarterly dividend of $0.15 per share, up 50% in July. On December 2, the dividend yield of shares was 4.33%.
Carlisle Companies Incorporated (NYSE:CSL), Medtronic plc (NYSE:MDT), and The Coca-Cola Company (NYSE:KO), along with Ford Motor Company (NYSE:F) are notable dividend stocks to consider.
As of the end of 2022Q3, 47 hedge funds tracked by Insider Monkey reported 46 stakes in Ford Motor Company (NYSE:F) last quarter. The total value of these shares is about 1.2 billion dollars. Fisher Asset Management had the largest stake in the company worth $503.6 million.
Leaven Partners mentioned Ford Motor Company (NYSE:F) in its Q3 2022 investor letter. Here’s what the firm says:
“In our last quarterly letter, I briefly mentioned that the consensus estimate of corporate earnings was looking a little overconfident. As of June 17, Wall Street expects S&P 500 earnings to grow 9.6% in 2022, up from 8.8% in April and 8.4% in January. That tune began to change in late July and accelerated in August and September, for example, as major players. Ford (NYSE:F), recently issued earnings warnings and/or withdrew guidance. In response, Wall Street changed its outlook: cut third-quarter profit growth to 4.6%[2] It cut full-year profit growth to 4.5% from 7.2% in early August.
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Disclosure. None. The best dividend stocks according to Jim Cramer was originally published on Insider Monkey.