Dividend Stocks With Momentum Offer Income and Upside
Adding high-quality dividend stocks to your investment plans can be a fantastic way to generate consistent income and build wealth over the long term. Many of these stocks are perceived as conservative investments, as dividend-payers tend to be established companies with consistent earnings. That means a lot of dividend stocks simply aren’t going to offer the same upside as other areas of the market. With that said, there are still a few dividend stocks out there that provide an opportunity to ride momentum while collecting quarterly payouts.
We’ve seen several stocks in particular rallying to new record highs over the last month, and there’s a good chance that the positive momentum for these companies continues into 2022. Adding shares of these impressive businesses on dips or during periods of consolidation could lead to strong profits next year and beyond, so keep an eye out for logical entry points in the coming trading sessions.
Here are 3 dividend stocks with momentum headed into 2022:
1. AbbVie
This dividend-paying biopharmaceutical stock has essentially gone parabolic during December, which means AbbVie (NYSE:ABBV) has plenty of momentum to start the new year. There could be a few different reasons that are causing investors to scoop up shares of AbbVie at this time. A few months back, Abbvie reported strong Q3 earnings including adjusted EPS growth of 18% year-over-year and updated its forward guidance. There’s also a chance that investors are piling into AbbVie due to a “risk-off” market since these types of low-beta stocks tend to hold up well during volatility as we saw earlier in December.
The company recently announced that the European Commission has approved its drug Skyrizi to treat active psoriatic arthritis, which is another positive to consider as the company continues to diversify its business. AbbVie has also submitted an application for Skyrizi to the European Medicines Agency to treat Crohn’s disease, which if approved, would help to drive further growth for the company. Finally, the fact that AbbVie trades at an attractive forward P/E ratio of 10.61 and offers a 4.20% dividend yield could be additional reasons to consider adding shares.
2. Procter & Gamble
It’s not often that you see consumer staples stocks like Procter & Gamble (NYSE:PG) move up over 10% in a month, which is another sign that large investors are flocking to safety ahead of 2022. This is the type of company that is perfect for buy and hold investors, as Procter & Gamble is a leading consumer products company that markets household and personal care products in over 180 different countries. It’s an industry-leading business with a safe dividend and a long history of reliable earnings, which are exactly some of the qualities to look out for in a dividend-payer.
Procter & Gamble is also a dividend aristocrat with over 65 consecutive years of dividend increases, which means investors can bank on consistent dividend growth over the years. Investors should also be attracted to the fact that the company has delivered 13 consecutive quarters of organic sales revenue growth, which is a testament to Procter & Gamble’s management team and business strategy. While P&G will face some cost pressure next year from inflation, the company has plans to raise prices for certain products to help lessen the blow. The bottom line here is that Procter & Gamble is a fantastic dividend stock that could stay hot in 2022, so keep an eye out for a pullback.
3. Broadcom
Semiconductor stocks continue to see heavy inflows as the year winds down, and that includes Broadcom (NASDAQ:AVGO). It’s a company that designs, develops, and supplies a range of semiconductor and infrastructure software solutions, which means it offers exposure to rapidly growing technologies like smartphones and data centers. The stock is trading at all-time highs following a fantastic Q4 earnings report that saw Broadcom post sales of $7.4 billion, up 15% year-over-year.
Investors should anticipate the demand for networking products to remain strong throughout 2022, and the company’s strong forward guidance for the upcoming fiscal year is another reason to consider adding shares. Broadcom also has one of the best dividend yields in the semiconductor space after a recent hike, with the stock offering a 2.45% yield at this time. It’s certainly one of the best values in the tech sector and a dividend stock that should be in for a strong year ahead.