Inflation is making 2022 a rough year for everyone. Rising costs mean less disposable income for consumers, which can make it more difficult to grow savings and pay bills. But if you have money that you can afford to invest, you can increase your monthly income and improve your financial situation by buying dividend stocks.
Viatris (VTRS 0.98%), Hasbro (HAS 4.01%), and JPMorgan Chase (JPM 1.44%) all pay attractive yields that are well above the average S&P 500 payout of 1.4%. And while none of these stocks pays a dividend on a monthly basis, they have different payment schedules, and investing in all three of them can ensure you have money coming in every month.
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1. Viatris
Healthcare company Viatris is a relatively new stock, coming into existence in 2020 through a merger between pharmaceutical company Mylan and Pfizer's off-patent business Upjohn. And Viatris is still tinkering with its business, announcing in February that it would be selling its biosimilars portfolio to Biocon Biologics for $3.3 billion. Viatris plans to use the cash to invest into its business while also returning capital to shareholders.
Simplifying a business can make it easier for management to avoid having to stretch its financial resources too thin, which in turn can make the dividend safer. But even without the transaction, Viatris' dividend looked manageable. Last year, the company paid just under $400 million in dividends. And with free cash flow in excess of $2.5 billion, it had more than enough to pay that plus pay down some of its debt.
Although investors dumped the stock after news of the sale to Biocon Biologics, for income investors this could be a good investment. With a yield of 4.5%, Viatris can generate significant income for your portfolio. And given that the company looks committed to returning capital to shareholders, that's a positive sign that dividend increases could also be in the stock's future. Viatris currently makes dividend payments every March, June, September, and December.
2. Hasbro
Hasbro is a name that is synonymous with board games and toys. Magic: The Gathering, Play-Doh, and Monopoly are some of its most popular brands that investors and consumers likely know. But for people craving some recurring income, Hasbro could also be popular for another reason: its dividend.
The entertainment stock pays a quarterly dividend of $0.70, which the company bumped up by a couple of cents earlier this year. It yields 3.1% annually with payments every February, May, August, and November. And the company is in great shape to support those payouts, with operating cash flow of $134.7 million for the period ended March 27 being sufficient to support its dividend payments ($94.5 million).
While consumers are no longer stuck at home, Hasbro still expects mid-single-digit growth this year in its operating profit. It's a good sign to both growth and income-oriented investors that amid such challenges, the company is still likely to generate growth. It's one of many reasons Hasbro makes for an excellent investment.
3. JPMorgan Chase
Bank stocks are generally rock-solid when it comes to paying dividends. If there's turmoil in the economy, a bank might not increase its dividend payments, but the odds of it not offering a payout are low. One of the best dividend yields from a bank stock today comes from JPMorgan Chase. At 3.2%, the top bank offers investors a high yield at an incredibly low payout ratio of less than 30%. Its payments are made in January, April, July, and October.
There's some uncertainty as to how banks will perform this year. Fears about a recession are looming, but interest rate hikes will help them take advantage of larger spreads between what they pay depositors and how much they charge out on loans. Today, this is still a hugely profitable business that in the first three months of 2022 generated a whopping $8.3 billion on reported revenue of $30.7 billion -- for an incredibly strong profit margin of 27%.
Over the long term, it's safe to bet on the big banks since they usually thrive as the economy expands. And even if there are challenges ahead, the company's low payout ratio of just 29% means there's little reason to be worried about JPMorgan's dividend right now.
