Dividend shares aren’t all the time recognized for producing scorching features. Nonetheless, traders have flocked to some dividend payers this yr as the general market has tumbled.
Among the largest winners are among the many elite group of S&P 500 members which have elevated their dividends for no less than 25 consecutive years. Listed here are the three finest Dividend Aristocrat shares within the first half of 2022.
1. ExxonMobil
ExxonMobil (XOM 2.23%) ranked because the hands-down largest winner amongst Dividend Aristocrats within the first six months of the yr. The vitality large has elevated its dividend for 39 consecutive years. Its shares skyrocketed greater than 40% within the first half of 2022.
That spectacular acquire is definitely loads decrease than it might need been. At its peak in early June, ExxonMobil inventory was up greater than 70%. There’s one key purpose for this robust efficiency: excessive oil costs.
Nonetheless, predictions that oil costs might fall have brought about many vitality shares, together with ExxonMobil, to drag again in latest weeks. A number of elements have contributed to expectations of decrease costs, together with OPEC’s decision to boost oil production and the Federal Reserve’s rate of interest hikes, which might quiet down the financial system.
2. Chevron
It can most likely come as no shock that one other Dividend Aristocrat from the vitality sector has delivered large features thus far this yr as effectively. Chevron (CVX 1.20%) has elevated its dividend for 35 years in a row. The inventory is up near 25% yr thus far.
The identical tailwinds which have pushed ExxonMobil’s great efficiency have additionally labored to Chevron’s profit. Specifically, the Russian invasion of Ukraine and the lead-up to the army battle spurred an inflow of investments in Chevron and different vitality shares.
Like ExxonMobil’s, although, Chevron’s share worth is now effectively beneath its excessive mark set a number of weeks in the past. At one level, Chevron inventory had soared 54% yr thus far. The identical issues about falling oil costs that brought about ExxonMobil’s pullback additionally resulted in Chevron’s shares declining.
3. AbbVie
Two sectors have carried out the very best thus far this yr: vitality and healthcare. We have already got a few vitality shares as the highest Dividend Aristocrats of 2022. The third-place spot belongs to a healthcare inventory: AbbVie (ABBV 0.42%). This large drugmaker has elevated its dividend for 50 consecutive years. And its shares have jumped round 12% yr thus far.
AbbVie’s robust dividend yield of practically 3.7% has little question attracted some traders. The inventory’s low valuation (shares presently commerce at lower than 11 instances anticipated earnings) is also a draw.
Most likely the most important purpose for AbbVie’s market-beating efficiency this yr, although, is that the corporate has chalked up a number of regulatory wins for its medication in latest months. Rinvoq picked up U.S. approvals for treating energetic ankylosing spondylitis and ulcerative colitis, and Skyrizi gained U.S. approval for treating Crohn’s illness.
Are they buys now?
I believe that each one three of those high-flying Dividend Aristocrat shares are nonetheless good picks to purchase now. My view is that the vitality and healthcare sectors are the two best sectors to invest in beneath the present market dynamics. ExxonMobil, Chevron, and AbbVie stand out as strong selections in these areas.
ExxonMobil and Chevron are the highest leaders within the oil and fuel trade. Whereas gasoline costs may average considerably, I anticipate that they’ll stay excessive. Specifically, my expectation is that the European Union’s transfer to ban greater than two-thirds of Russian oil by the tip of the yr will assist each of those shares.
AbbVie faces the lack of U.S. exclusivity for its top-selling drug, Humira, in 2023. Nonetheless, the corporate’s success in profitable new accepted indications for Rinvoq and Skyrizi bodes effectively for its future prospects. I believe that Humira’s upcoming lack of exclusivity is already largely baked into AbbVie’s share worth. That is nonetheless an excellent inventory to purchase, in my opinion, particularly for income-seeking traders.
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