Stocks are always going up. It's just not all of them that do so. But there are always outliers that rise even when the overall market is sinking.
With growth stocks out of favor, many investors have turned to big drugmakers and energy giants that pay attractive dividends. Here are three such dividend stocks that are trouncing the market so far in 2022. Are they still buys?
Image source: Getty Images.
1. AbbVie
The S&P 500 index is down 10% year to date. Meanwhile, shares of AbbVie (ABBV -4.58%) have jumped 14%. The pharma stock has been up nearly 40% over the past 12 months.
AbbVie's dividend yield of over 3.6% continues to attract investors. It also helps that the company ranks as a Dividend King with 50 consecutive years of dividend increases under its belt.
I suspect that many investors like AbbVie's valuation as well. The drugmaker's shares trade at only 11.5 times expected earnings even after the big gains over the past year.
Some could also be shaking off earlier concerns that AbbVie won't be able to offset anticipated sales declines for Humira when it loses U.S. exclusivity next year. The company believes that it will quickly return to growth in 2024, which will pick up in the second half of this decade.
With several other of AbbVie's drugs gaining momentum, that optimism appears to be warranted. I think that AbbVie remains an especially appealing stock to buy for income investors.
2. AstraZeneca
AstraZeneca (AZN 0.19%) is another pharma stock that lags only slightly behind AbbVie. Its shares have risen 13% year to date, well ahead of the overall market performance.
My hunch is that quite a few investors view AstraZeneca as a relatively safe stock to buy in an uncertain market. The company certainly has a diversified revenue stream, with 13 blockbuster drugs in 2021. Sales soared 64% year over year in the fourth quarter of 2021.
AstraZeneca expects to continue those winning ways, albeit at a moderate pace. It looks for full-year 2022 revenue to increase in the high teens, with core earnings per share jumping in the mid-to-high 20% range.
The drugmaker's dividend isn't too shabby, either. AstraZeneca's dividend yield stands at 2.1%. The dividend program ranks among the company's top capital allocation priorities.
But is AstraZeneca still a good stock to buy? I think so. Although AstraZeneca doesn't check off all of the boxes that AbbVie does, its growth prospects are better than most big pharma stocks.
3. Chevron
There aren't many dividend stocks that have outperformed Chevron (CVX 0.37%) this year. The oil and gas giant's shares have vaulted 37% higher in 2022 thus far.
It's no surprise why Chevron stock has been so hot. Investors have flocked to the energy sector for good reason. Oil prices have ballooned with the Russian invasion of Ukraine and increased travel as COVID-19 restrictions ease.
Of course, Chevron has been a longtime favorite for income-seeking investors. That hasn't changed. Despite the strong year-to-date gains, the company's dividend still yields close to 3.3%.
Chevron boasts the strongest balance sheet among its peers. Its acquisition of Noble Energy was a smart move. The company is also expanding into clean energy with its deal to buy Renewable Energy Group.
My view is that the overall dynamics will continue to be in Chevron's favor throughout 2022. I also think that the stock has pretty good long-term prospects. This high-flying dividend stock still looks like a good pick, in my opinion.
