The Best Dividend Stocks For Income in 2022

Jitanchandra Solanki
10 Min read

When it comes to choosing the best stocks to invest in, dividend paying stocks are high on the list for many investors. And why not? If an investor can pick some of the top-performing stocks, they could potentially capitalise on growth in the share prices, as well as regular income payments in the form of dividends.

In this 'Best Dividend Stocks' article, we cover a range of different stocks to watch for this year. While we can never which investments will work out the best, we can research thoroughly to put the probabilities more in our favour. Learn the top dividend stocks UK, US and EU and how to invest in them with competitive commissions. 

How Dividend Stocks Work

What are dividend stocks? Dividend stocks are shares in public companies where those companies pay shareholders a slice of company profits. Dividends are usually paid out on a quarterly basis and are a way for shareholders to participate in the success of the company. Most dividends are cash dividends.

These are cash payments made on a per-share basis to investors. For example, a company pays out $3.13 per share every quarter in dividend payments - this is known as the dividend amount.

What is a Dividend Yield? You may have heard the term dividend yield before but do not worry if you haven't - it's a simple calculation:

  • Dividend Yield = Annual Dividend / Share Price

The dividend yield is the annual dividend divided by the share price. So, using the example above, the annual dividend would be $3.13 multiplied by four quarterly payments, which amounts to $12.52. If the share price closed at $400.23 this means that the dividend yield is 3.1% ($12.52 / $400.23).

So how can we use this information to identify dividend stocks to invest in? Let's take a look.

Best Dividend Stocks List

Below is a list of top dividend stocks to watch from the United States and the UK. The United States is home to some of the most recognisable companies in the world. With a variety of sectors to choose from such as retail, energy, and financial services, there are many candidates that can make the list of the best dividend stocks to invest in. However, using the guidelines listed above, we know that the company must have:

  • A long track record of steady payouts
  • Increasing dividend growth
  • A dividend yield that is not too high or too low

Best Dividend Stocks US

1. JP Morgan Chase

  • Dividend: $4 per share
  • Dividend yield: 3.47%
    • As of June 2022

JP Morgan, one of the world's largest banks, has an impressive dividend history going back a long way. Before the financial crash of 2008, the investment banking giant was paying an annual dividend of $1.52. Shortly after the financial crash, they cut it to just $0.20 cents. However, the dividend payout has been increasing every year since, and is at its highest level in two decades, surpassing its pre-2008 level.

On top of the dividend payout, shareholders have enjoyed an increase in the share price as well, which gives investors more options. They can choose to use the dividend payouts as a form of income, or they could use it to reinvest and buy more shares - thereby compounding their return over time.

Of course, the move higher in the company's share price didn't go up in a straight line. However, during the times that the stock is falling, the investor at least has some capital coming from the company in the form of dividend payments.

2. Johnson & Johnson

  • Dividend: $4.52 per share
  • Estimated Dividend Yield: 2.48%
    • As of June 2022

While Johnson & Johnson doesn't provide the highest dividend yield in the market, it does offer a good balance between dividend growth and a stable stock price. Not only has the company increased its dividend for 56 years in a row, but it is also considered a defensive stock - a company that will perform in good and bad economic times.

After all, the company is one of the largest manufacturers and distributors of medical and pharmaceutical products in the world. So, there is always a need for the products they provide, no matter how the economy is performing.

Investors have enjoyed the benefits of a rising share price and stable dividends. This provides a good balance for many investor portfolios. Interestingly, between 1970 and 2016 the annual average return has been almost 15%. In that time, there have only been 13 down years, meaning that 72.2% of the time the shares have ended positively for the year.

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Best Dividend Stocks UK

The UK stock market is a very popular place for international investors to find top dividend paying stocks UK. It houses some of the biggest companies in the world, who operate on a global scale. It is no coincidence that some of the best UK stocks have a high correlation with high-yield stocks. Here is a selection of just a few high dividend stocks UK that are worthy of consideration for the best stocks to buy now.

1. Unilever PLC

  • Estimated Dividend Yield: 2.89%

Unilever PLC has a rich history since its establishment in 1885. The consumer staple stock is home to brands recognised all over the world such as Dove, Lipton, Hellmann's, Ben & Jerry's, and many, many more. The fact that the company has a very large portfolio of products that are sold all over the world, including emerging markets like Africa, China, and India, makes it a strong contender for one of the best UK dividend stocks.

Unilever is actually listed on three different stock exchanges around the world, as its brand is formed of two entities. Unilever NV is listed on the Euronext Amsterdam and New York Stock Exchange. Unilever PLC is listed on the London Stock Exchange. As each exchange offers different currencies, there is room for savvy investors to also play the exchange rate of different Unilever shares.

However, perhaps the most attractive quality of Unilever is the rise in its share price since 1990. High dividend paying stocks in the UK rarely come with such a steady rise in their share price. While it may not last forever, it certainly makes it attractive, and a top dividend stock UK.

2. GlaxoSmithKline

  • Estimated Dividend Yield: 4.27%

GlaxoSmithKline is one of the biggest healthcare and pharmaceutical companies in the world, with a market capitalisation of over £80 billion. Their primary focus areas are pharmaceuticals, vaccines, and consumer healthcare. One of the major reasons the company is a major contender for the top dividend paying stocks in the UK is clearly its 5.44% dividend yield.

However, the higher dividend yield comes at a price. Pharmaceutical companies' stock prices tend to be very volatile, as billions can be spent on drugs - only to then fail at clinical trials. The share price of GlaxoSmithKline can be quite volatile. There are times that the share price rallies higher but also times when it falls. 

Those confident enough to utilise market timing methods to try and benefit from capital growth, as well as the high dividend yield, will certainly be considering this company within their high dividend stocks UK watchlist.

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Best Dividend Stocks EU

Europe has a large selection of dividend stocks across a variety of sectors. This makes it an interesting place for investors when choosing the best stocks to invest in. One way to help locate some of the top dividend paying stocks is to look at the mutual fund sector which is home to many European dividend focused mutual funds.

Savvy investors may want to consider performing additional research on each company. Whether it's fundamental analysis or technical analysis, identifying the best dividend stocks provides the investor with an edge. However, it is just as important to maintain that edge. In order to do so, investors need to have the right research and the best possible investing platform, as well as the right product to invest in.

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How to Buy Dividend Stocks UK

If you are considering investing in the stock market to build a portfolio of the best dividend stocks, you need to have access to the best investment products available.

You can open a demo or live trading account to start investing in dividend stocks from all around the world. Below is a step by step process on how to do so using the MetaTrader 5 web platform provided by Admirals for free. 

  1. Login to the Admirals Trader’s Room where you can access different accounts, expert tools and deposit and withdrawal options.
  2. To open your trading platform, click on the Trade icon next to the relevant account name.
  3. From the MetaTrader 5 web platform, type in the name of the stock at the bottom of the
  4. MarketWatch window and then drag the name onto the chart to view the live price.
  5. To open a trading ticket, click on New Order at the top of the window. This allows you to input entry, stop loss and take profit levels and the number of shares you wish to purchase.
Source: MetaTrader 5 Web, 27 June 2022

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Disclaimer: This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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