Three Top Dividend Stocks to Consider with High Inflation

Ian Cooper
Ian Cooper
Cooper was among the few analysts to spot the financial crisis of 2008, the top of subprime and Alt-A, the death of Lehman Brothers, Bear Stearns, and New Century Financial, and even the Dow’s collapse to 6,500, as well as its recovery. He even called for gold to rally well above $1.500 when it traded under $600.
Dividend Stocks

Three Top Dividend Stocks to Consider with High Inflation

Higher inflation has been rough on us all.

We’ve seen it in oil, natural gas, and food prices. 

In December, for example, the consumer price index (CPI) was up 7% year over year — the fastest since 1982, according to The Wall Street Journal.

“There is still tremendous momentum when it comes to inflation right now. While inflation is likely to peak in the next few months, the overall pace is going to remain a challenge for consumers, businesses and policy,” said Sarah House, senior economist at Wells Fargo.

In addition, Joseph Heider, president of Cirrus Wealth Management says, “I think you’re going to continue to see inflationary pressures for the remainder of this year and probably into early 2023,” as quoted by NBC News.

Protect Your Portfolio from Inflationary Threats

Rising inflation has become a major concern for retirement age investors.

According to a new survey from Global Atlantic Financial Group, investors ages 59 to 75 are concerned that inflation will wreak havoc on their investments, as noted by CNBC.  About 71% of those surveyed believe it will negatively impact them.

“Moreover, 46% of investors said they believe rising inflation and low interest rates will make it more difficult to have steady income in retirement. Of those invested in fixed income, 46% said they are concerned about low interest rates affecting their retirement income,” added CNBC.

However, there are stocks that can help keep your portfolio safe from inflation.

Some of the top ones include:

WP Carey (WPC)

With WP Carey, nearly all of its rental agreements include contractual rent increases for inflation, according to BNK Invest. In fact, about 60% are tied to the consumer price index.   

Well diversified with industrial, warehouse, office, retail, and self-storage, the REIT also pays a yield of 5.32%.  Even better, WP Carey is a REIT with 23 consecutive years of annual dividend increases.  Most recently, the company increased its quarterly dividend to $1.055 per share, payable January 14, 2022 to shareholders of record as of December 31, 2021. 

Pioneer Natural Resources (PXD)

Pioneer Natural Resources paid out $6.76 per share in dividends in 2021. That puts its dividend yield around 11%.  Better, the oil producer could have even better days ahead.  With crude oil prices pushing higher, the company said, “We’re estimating something near about $20 per share total payout in 2022,” as noted in a conference call.

Also, according to ClearBridge Investments, as quoted by Insider Monkey:

“Over the last year we have also added a position in Pioneer Natural Resources Company, a best-in-class producer in the Permian Basin. We added Pioneer Natural Resources Company as we anticipated rising commodity prices and sought more direct leverage to that trend. Our overweight to energy has benefited our performance this year, in particular through the first half of the year, and we believe the sector, still less than 3% of the S&P 500, remains underinvested and attractive going forward.”

Rio Tinto Group (RIO)

With a dividend yield of 9.59%, Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company offers aluminum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium.

Even better, according to Rio Tinto Chief Executive Jakob Stausholm:

“In 2021 we continued to experience strong demand for our products while operating conditions remained challenging. Despite this, we progressed a number of our projects, including the Pilbara replacement mines, underlining the resilience of the business and the commitment and flexibility of our people, communities and host governments. We are seeing some initial positive results from the implementation of the Rio Tinto Safe Production System, which we will significantly ramp up in 2022.”

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