rachelf1123
2022-08-25

In 2022, inflation is high, interest rates are rising, and pandemic-associated supply chain constraints persist. Yet some companies continue to turn in solid financial results and raise their dividends.

Three such top companies are confectionary behemoth The Hershey Company, electric utility giant NextEra Energy, and U.S. water utility leader American Water Works.

All three of these dividend stocks have outperformed the market over the long term. And there's no reason to believe that they won't continue to do so. All three are worth considering buying now if you're an investor with a long-term investing mindset.

Hershey: 15% dividend increase in 2022

High inflation has caused most retailers to increase their prices, which has resulted in consumers decreasing their consumption of many products. But as I recently wrote in my coverage of Hershey's second-quarter results, "inflation is no match for consumers' sweet (and salty) tooth," at least when it comes to the company's products.

Indeed, the confectionary and salty-snack food maker continues to turn in robust financial results. Its stable of longtime popular brands -- including its namesake brand, Reese's, Kit Kat, and Twizzlers -- give it an enviable pricing power.

In recent years, Hershey has aggressively expanded into the salty-snack food space, which has helped boost its revenue growth. Acquisitions have added such consumer favorites as SkinnyPop Popcorn, Pirate's Booty puffed rice and corn snacks, and Dot's Pretzels to the company's product offerings.

Hershey's most recent quarterly dividend marks its 371st consecutive quarterly dividend on its common stock, which means that it's paid a quarterly dividend every quarter since going public in 1978. The stock's dividend yield is about 1.8% as of the market close on Aug. 24.

NextEra Energy: 10.4% dividend increase in 2022

NextEra Energy, which owns Florida Power & Light Company, is the largest regulated electric utility in the United States. It also has the distinction of being the world's largest generator of renewable energy from the wind and sun, as well as a global leader in battery storage.

Its main catalysts for growth include the steadily increasing population in Florida and the overall growth of the renewable energy space. The company should benefit from the transitioning of the country's vehicle fleet to electric power. Moreover, it has a new avenue for growth thanks to its recent entrance into the U.S. regulated water and wastewater utility industry.

NextEra has raised its dividend for 28 consecutive years. Moreover, management expects to increase the dividend about 10% a year through at least 2024. The stock's dividend yield is about 1.9% as of the market close on Aug. 24.

American Water Works: 8.7% dividend increase in 2022

American Water Works is the largest U.S. water and wastewater utility. It has regulated operations in 14 states and provides services to military bases across the country through extremely long-term contracts.

Consumers and businesses aren't apt to cut back (or at least not much) on their water usage even in tough economic times. And wastewater services are probably as essential a service as it gets.

American Water is the most attractive stock in its sector largely because of its industry-leading size and geographic diversity. Among other benefits, these traits make it best positioned to grow through acquisitions.

The company has raised its dividend every year since it went public in 2008. Through 2026, management has guided for dividend growth to average at the high end of the 7% to 10% range. The stock's dividend yield is about 1.9% as of the market close on Aug. 24.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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