The Fed hiked rates by a fourth consecutive 75 bps this week, and further rate hikes are expected to continue for a while. However, the Fed might curb its aggression in the upcoming meeting. According to the CME FedWatch tool, there’s a 59.4% probability of a 50-bps rate hike in December 2022.

Amid widespread market uncertainties, dividend investing has become popular to ensure a steady income stream and safeguard one’s portfolio. Investors’ interest in dividend stocks is evident from the Vanguard Dividend Appreciation ETF’s (VIG) 4.1% gains over the past month.

Furthermore, Jacques Elmaleh, a chartered financial analyst, senior portfolio manager, and director of research at The Colony Group, claims, “The defensive characteristics of dividend stocks can provide a lower-volatility way to stay invested in equities during rocky stock markets.”

Given the backdrop, investors might count on fundamentally sound stocks Pfizer Inc. (PFE) and Caledonia Mining Corporation Plc (CMCL) for reliable dividends.

Pfizer Inc. (PFE)

PFE discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. The company serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, and disease control and prevention centers.

On November 3, 2022, PFE’s investigational cancer immunotherapy elranatamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) for treating people with relapsed or refractory multiple myeloma. This marks yet another milestone accomplishment for PFE in the field of oncology.

Also, on October 12, 2022, PFE and BioNTech S.E. (BNTX) announced that the FDA had granted Emergency Use Authorization for their co-developed 10-g booster dose of Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine in children aged 5 to 11 years old. This might add to the company’s top line.

PFE has paid dividends for 33 consecutive years. Over the last three years, PFE’s dividend payouts have grown at a 5.5% CAGR. While PFE’s four-year average dividend yield is 3.62%, its current dividend translates to a 3.40% yield.

PFE’s income from continuing operations came in at $8.65 billion for the third quarter of 2022, up 5.8% year-over-year. Its net income came in at $8.61 billion, up 5.7% year-over-year, while its EPS came in at $1.51, up 6.3% year-over-year.

Analysts expect PFE’s revenue to increase 42% year-over-year to $1.10 trillion in 2022. The stock’s EPS is estimated to grow 68.6% year-over-year to $70.89 in 2022. It surpassed EPS estimates in three of four trailing quarters. Over the past year, the stock has gained 3.9% to close the last trading session at $46.57.

PFE’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, equating to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PFE has an A grade for Value and a B for Growth and Quality. Within the Medical – Pharmaceuticals industry, it is ranked #6 out of 163 stocks. Click here for the additional POWR Ratings for Momentum, Stability, and Sentiment for PFE.

Caledonia Mining Corporation Plc (CMCL)

Headquartered in Saint Helier, Jersey, CMCL is a gold mine operator that explores and produces gold and other precious metals. It operates through three segments: Corporate; Zimbabwe; South Africa and Zambia.

On November 2, 2022, CMCL announced the acquisition of Motapa Mining Company U.K. Limited, the parent company of a Zimbabwe subsidiary that owns a registered mining lease on the Motapa gold exploration property in Southern Zimbabwe.

Mark Learmonth, the CEO, said, “We look forward to developing an exploration program for Motapa as we target a large-scale gold belt surrounding the Bilboes project.”

CMCL has paid dividends for three consecutive years. Over the last three years, CMCL’s dividend payouts have grown at a 17.7% CAGR. While CMCL’s four-year average dividend yield is 3.81%, its current dividend translates to a 5.26% yield.

CMCL’s sales came in at $36.99 million for the second quarter that ended June 30, 2022, up 23.4% year-over-year. Its net income came in at $12.53 million, up 199% year-over-year, while its EPS came in at $0.88, up 319% year-over-year.

Street expects CMCL’s revenue to increase 23% year-over-year to $122.23 million in 2022. Its EPS is estimated to grow 9.7% year-over-year to $2.03 in 2022. Over the past month, the stock has gained 2.5% to close the last trading session at $10.15.

CMCL has an overall rating of A, equating to a Strong Buy in our POWR Ratings system. It has an A grade for Sentiment and a B for Growth, Value, and Quality. It is ranked first among 43 stocks in the Miners – Diversified industry. Click here to access the additional POWR Ratings for CMCL (Stability and Momentum).

PFE shares were trading at $46.79 per share on Friday afternoon, up $0.22 (+0.47%). Year-to-date, PFE has declined -18.19%, versus a -20.73% rise in the benchmark S&P 500 index during the same period.

About the Author: Rashmi Kumari

Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...

More Resources for the Stocks in this Article