Looking for Passive Income? Consider These 3 High-Quality Dividend Stocks

NYSE: CAJ | Canon Inc. ADR News, Ratings, and Charts

CAJ – Although stock prices surged yesterday on optimism about the Fed’s interest rate increases to control inflation, the stock market is still expected to remain under tremendous pressure on macroeconomic and geopolitical concerns. Amid this environment, we think one might want to consider betting on high-quality dividend stocks Canon Inc. (CAJ), Western Midstream Partners, LP (WES), and Sealed Air Corporation (SEE) to generate a steady income stream.

The past few months have been troublesome for the major stock market indexes. Last month, the market entered correction territory with growing concerns over multi-decade high inflation and the Fed’s interest rate increases to control it, intensifying geopolitical tensions and extended COVID-19 lockdowns in China. The S&P 500, Dow Jones, and the Nasdaq composites have plunged 8.8%, 4.9%, and 13%, respectively, over the past month.

Moreover, U.S. GDP declined 1.4% in the first quarter of 2022, making a mockery of analysts’ expectations of a 1% gain. And many analysts expect the Fed’s aggressive interest rate hikes to push the U.S. economy into a recession. According to Goldman strategists led by Jan Hatzius, the probability of an economic downturn within the next 24 months is 38%. So, we think investors should opt for stocks with a stable dividend history to dodge the near-term market fluctuations and generate a steady income.

So, we think it could be wise to invest in high-quality dividend stocks Canon Inc. (CAJ), Western Midstream Partners, LP (WES), and Sealed Air Corporation (SEE) to build some portfolio resilience amid the market’s turbulence.

Canon Inc. (CAJ)

Headquartered in Tokyo, Japan, CAJ manufactures and sells office multifunction devices (MFDs), plain paper copying machines, laser and inkjet printers, cameras, diagnostic equipment, and lithography equipment. Printing Business Unit, Imaging Business Unit, Medical Business Unit, and Industrial and Others Business Unit are the company’s four operational segments.

Last month, CAJ announced the launch of the PRISMAcolor Manager solution that can help users evaluate and monitor print quality when using compatible printers. With the help of objective measurement methods to define and establish color quality, the PRISMAcolor Manager solution shows users how their printed color compares to either a user’s internal or one of the accepted commercial printing industry specifications. The cloud-based solution is simple to deploy and allows users to track and compare results over time.

Also last month, CAJ announced the forthcoming release of the imagePRESS V1000 digital press. With a strong focus on automation, tasks such as color repeatability and registration alignment are simplified for print establishments looking to produce a vast range of applications, from direct mail and business cards to booklets, posters, and other creative marketing collateral.

CAJ paid a semiannual dividend of $0.45 on April 7, 2021. Its $0.86 annual dividend yields 3.9% at its current share price. It has a four-year average dividend yield of 4.1%.

For the first quarter, ending March 31, 2022, CAJ’s net sales increased 4.4% year-over-year to ¥879.35 billion ($6.77 billion). Its operating profit grew 7.9% from its year-ago value to ¥76.14 billion ($586.28 million), while its net income attributable to CAJ improved 3.4% from its prior-year quarter to ¥45.98 billion ($354.01 million). The company’s EPS rose 3.4% year-over-year to ¥43.96.

Analysts expect CAJ’s revenue to increase 124.9% year-over-year to $29.42 billion during fiscal 2022. The $0.47 consensus EPS estimate for the third quarter ending Sept. 30,  2022, represents a 12.1% improvement year-over-year.

CAJ’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

The stock also has an A grade for Quality and a B grade for Value and Stability. Within the Technology – Hardware industry, it is ranked #2 of 44 stocks.

To see additional POWR Ratings for Growth, Sentiment, and Momentum for CAJ, click here.

Western Midstream Partners, LP (WES)          

WES, a midstream energy company headquartered in The Woodlands, Tex., along with its subsidiaries, acquires, owns, develops, and operates primarily in the United States. It participates in gathering, compressing, treating, processing, and transporting natural gas; gathering, stabilizing, and transporting condensate, natural gas liquids (NGLs), and crude oil; and gathering and disposing of produced water.

WES announced a  $0.50  quarterly dividend on Feb. 5, 2022, payable on May 13, 2022. Its $2.00 annual dividend yields 7.7% at its current share price. It has an 11.1%  four-year average dividend.

During the fourth quarter ending Dec.  31, 2021, WES’ total revenues and others increased 11.1% year-over-year to $719.21 million. Its operating income amounted to $325.72 million, while its net income came in at $243.52 million. The company’s EPS was  $0.58 over the period.

The $0.61 consensus EPS estimate for the first quarter, ending March 31, 2022, represents a 27% improvement year-over-year. Analysts expect its revenue to increase 4% year-over-year to $701.95 million for the same period.

WES’ strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. WES has also rated an A grade for Momentum and a B grade for Quality and Stability. Within the A-rated MLPs – Oil & Gas industry, it is ranked #8 of 33 stocks.

In total, we rate WES on eight distinct levels. To see additional POWR Ratings for Growth, Value, and Sentiment for WES, click here.

Sealed Air Corporation (SEE)

SEE provides food safety and security and product protection solutions and equipment in North America, South America, Europe, the Middle East, Africa, and the Asia Pacific. The Charlotte, N.C.-based company has two operational segments: the Food segment, which offers integrated packaging materials and automation equipment solutions, and the Protective segment, which provides a foam, inflatable, suspension and retention, and temperature assurance packaging solutions.

SEE has introduced prismiq, a digital packaging brand with a portfolio of solutions for design services, digital printing, and smart packaging. Ted Doheny, President & CEO of SEE, said, “The future of digital packaging and graphics is here. prismiq™, which is powered by our state-of-the-art digital printing technology, is creating game-changing value for customers, enabling touchless automation both in our facilities and our customers’ operations, and making sustainability for packaging real.”

SEE paid a $0.20 quarterly dividend on March 25, 2022. Its $0.80 annual dividend yields 1.2% at its current share price. It has a 1.5% four-year average dividend yield. In addition, the company’s dividend payouts have increased at a 4.6% CAGR over the past five years.

SEE’s net sales increased 11.9% year-over-year to $1.42 billion during the first quarter, ending March 31, 2022. Its operating profit grew 29.4% from its year-ago value to $262.1 million, while its non-GAAP net earnings improved 38% from its prior-year quarter to $168.1 million. The company’s non-GAAP EPS rose 43.6% year-over-year to $1.12.

Analysts expect its revenue to increase 8.4% year-over-year to $1.44 billion for the second quarter, ending June 30, 2022. The  $0.98 consensus EPS estimate  for the same period indicates a 24.2% improvement year-over-year.

It is no surprise that SEE has an overall B rating, which equates to Strong Buy in our POWR Ratings system. SEE has an A grade for Quality and a B grade for Sentiment. Among the 10 stocks in the B-rated Industrial – Packaging industry, it is ranked #4.

Click here to see the additional POWR Ratings for SEE (Growth, Value, Stability, and Momentum).

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CAJ shares were trading at $22.73 per share on Thursday afternoon, down $0.62 (-2.66%). Year-to-date, CAJ has declined -6.96%, versus a -12.68% rise in the benchmark S&P 500 index during the same period.


About the Author: Spandan Khandelwal


Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing. More...


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