3 Dividend Stocks for December 2022

Susan Dziubinski: I'm Susan Dziubinski for Morningstar. In this monthly video series, we take a look at the dividend prospects of three stocks that are popular with income investors.

3 Dividend Stocks for December 2022

These dividend stocks are popular with income investors. Data as of Dec. 2, 2022.

1. Enbridge ENB
2. Truist Financial TFC
3. Southern SO

First up this month is Enbridge ENB, a Canadian firm that holds a broad set of energy infrastructure assets, including pipelines, terminals, and storage facilities. Enbridge pays a fixed quarterly dividend in Canadian dollars, though the amount received by U.S. investors varies based on current exchange rates, and a strong U.S. dollar has affected payouts in 2022. Enbridge currently yields more than 6%, and based on the timing of its past dividend increases, it seems likely that Enbridge will declare an increased payout for 2023 in early December. However, that raise and future increases are likely to be less generous than those seen over the past five years. U.S. investors are also subject to a 15% withholding tax on dividend payments, which may be recoverable.

Truist Financial TFC is a regional bank that has historically placed a strong emphasis on returning cash to shareholders via its dividend. The bank has provided 10.1% annualized dividend growth over the past five years and raised its payout by 8.3% for 2022. But like so many dividend-payers in the current U.S. equity market, a drop in share price has been the biggest contributor to the stock's increased yield in 2022. Truist now provides a forward yield of more than 4%, up from 3% just a little over a year ago.

Southern SO is one of the largest utilities in the United States. It has raised its dividend on an annual basis for more than 20 years, and it can point to almost 75 years of uninterrupted quarterly payments without a reduction. The stock currently yields around 4.0%, though its annualized dividend growth over the past five years is just 3.4%. Morningstar analysts note that the dividend 'has grown more slowly than earnings in recent years because of Southern's investments, including Vogtle, but dividend growth should accelerate to match earnings growth once Vogtle is finished."

I'm Susan Dziubinski with Morningstar. Tune in next month for more dividend stock ideas.

David Harrell provided the research behind this segment.

Watch "3 Dividend Stocks for November 2022" for more from this series.