Are you looking to invest in the best halal dividend stocks?
Do you want dividend-paying investments in Muslim-friendly companies?
Those looking to diversify their portfolios while investing in halal firms may find a comprehensive list of the best halal dividend stocks in this article.
If you have any questions or want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.
Are Dividends Halal?
Equities that produce dividends have the potential to be classified as either halal or haram, depending on the circumstances.
It is vital to take into mind specific standards whenever one is classifying a stock as a halal dividend stock or a halal dividend exchange-traded fund (ETF).
The magnitude of this occurrence is dependent on the kind of business strategies used by the company, the nature of the products that the company sells, and the amount of debt that the company has racked up.
If a company fulfills all of the conditions stipulated by Shariah rulings, then that company is regarded as being compatible with Shariah law.
As a result, the Islamic dietary standards could allow for it to be considered a decision that is acceptable to make.
Therefore, it is possible to claim that dividend-paying stocks are acceptable under Islamic law, provided that the company in question refrains from participating in any actions that are regarded as unlawful (haram).
Dividends are not tied to interest in any way, since they are entirely calculated based on the net profits of a company.
As a result, the Islamic dietary standards see them as legitimate, rather than impermissible, options.
Nevertheless, how a company conducts its business as well as its overall level of debt are two of the factors that are taken into consideration to decide whether a dividend should be regarded as halal or haram.
If the issue business derives its revenue only from halal sources, then Islamically speaking, purchasing stocks in the company in question is an acceptable form of investment.
What Are The Best Halal Dividend Stocks?
Chevron Corporation (NYSE: CVX)
The Chevron Corporation, which is one of the best halal dividend stocks, is involved in the manufacture of a wide variety of refined products that are distinguished by the exceptional quality of their components.
Additives for gasoline, diesel fuel, and fuel oil are included in these goods. Because of the consistent growth in the number of dividends it has paid out for twenty-five years, the company is considered to be one of the best dividend stocks included in our collection.
The firm started paying out a dividend of $1.42 per share every quarter as of the 7th of December, which results in a dividend yield of 3.31%.
The Chevron Corporation (NYSE: CVX) has announced that it generated a significant amount of cash during the third quarter of 2022.
The company’s operational cash flow for the period was reported at $15.3 billion, while its free cash flow amounted to $12.3 billion.
Both of these figures were recorded for the quarter. When compared to the same time in the prior year, the corporation increased the total amount of dividends paid out to its shareholders by 6%, bringing the total amount of dividends paid out to $2.7 billion.
There was an increase in the number of hedge funds tracked by Insider Monkey that had ownership positions in Chevron Corporation (NYSE: CVX), from 59 in the prior quarter to 66 in the third quarter of 2022.
This is an increase of 11 percentage points from the previous quarter. More than $27 billion is represented by the total value of these assets.
Home Depot (NYSE: HD)
An international business called Home Depot offers items for home remodeling. Over 2,298 of the company’s locations are dispersed throughout the 50 states.
These include Puerto Rico, Guam, the District of Columbia, 10 Canadian provinces, the U.S. Virgin Islands, and even Mexico.
One of the most well-liked halal dividend growth equities to invest in is Home Depot. The profit margin is now 10.9%, having grown significantly over the years. The most recent dividend, which is $1.90 per share, has a dividend yield of 2.55%.
The market value of this stock is approximately $304.13 billion.
Home Depot, one of the best halal dividend stocks, estimates that its addressable market in North America is worth $900 billion as the company grows and operates there. To combat inflation, they want to concentrate on improving shopping experiences via digital technology and more efficient operations.
What makes Home Depot’s sales rise of over 1.87% shariah-compliant? The fact that Home Depot offers décor, maintenance and repair tools, rental equipment, lawn and garden supplies, and other goods makes its dividend stock kosher.
The company works under halal standards and receives its income from the aforementioned services and goods.
V.F. Corporation (NYSE: VFC)
V.F. Corporation traded as “VFC” on NYSE, is a renowned American multinational company specializing in clothing and footwear manufacturing. The organization can manage a portfolio with 13 brands. It is one of the best halal dividend stocks.
The firm’s revenue for Q2 2023 was $3.08 billion, a 3.8% decrease from the previous fiscal year. $194 million in dividends was sent to shareholders during the reported period. At the end of September, the business had $552.8 million in cash and cash equivalents.
Over 48 years, V.F. Corporation, has consistently increased dividend payouts to shareholders. Starting from December 7th, the business pays a quarterly dividend of $0.50 per share, with a current dividend yield of 7.10%.
Insider Monkey reports that 26 hedge funds had interests in V.F. Corporation (NYSE:VFC) by Q3 2022. This number is lower than the previous quarter’s tally of 29. The total value of these investments is estimated at $280 million.
Air Products and Chemicals, Inc. (NYSE: APD)
Air Products and Chemicals, Inc., which trades on the New York Stock Exchange under the ticker symbol “APD,” is a well-known American multinational firm that is engaged in the chemical industry. It is one of the best halal dividend stocks.
The company focuses on the distribution of gases and chemicals, the majority of which are designed for use in industrial settings.
On November 22nd, the company announced that it will be maintaining its previous dividend distribution amount of $1.62 per share for its next quarterly dividend.
Since the company has maintained a pattern of annual dividend hikes for the past four decades running, it has earned a place in our hand-picked list of the best-performing dividend companies.
Notable additions to dividend portfolios include AbbVie Inc. (NYSE:ABBV), PepsiCo, Inc. (NASDAQ:PEP), and Merck & Co., Inc. (NYSE:MRK).
In addition, taking into consideration Air Products and Chemicals, Inc. (NYSE:APD) is a possibility because of the company’s enviable track record of regularly increasing its dividend payouts.
Air Products and Chemicals, Inc. (NYSE:APD) reported an operating cash flow of up to $3.1 billion for the fourth fiscal quarter of 2022.
The company paid out dividends to its shareholders for $1.3 billion, which is evidence that the company generated a substantial amount of cash during the period under review.
The total amount of the company’s revenues reached $3.57 billion, representing a remarkable rise of 25.7% when compared to the same time in the year before.
Deutsche Bank upgraded its price target for Air Products and Chemicals, Inc. (NYSE:APD) to $340 during December.
The investment bank also assigned a Buy rating to the company’s stock. This modification was executed in acknowledgment of the successful performance shown by the company during the year.
During the third quarter of 2022, hedge funds have shown considerable interest in Air Products and Chemicals, Inc. (NYSE:APD), which led to the company receiving positive attention.
According to the database of Insider Monkey, a total of 43 funds held interests in the company during this time. This is an increase from the count of 33 funds that had interests in the company during the previous quarter.
The total of these holdings is calculated to be 394.2 million dollars in value. During the third quarter, Adage Capital Management established itself as a significant stakeholder in the company.
Johnson & Johnson (NYSE: JNJ)
A well-known healthcare company that produces consumer goods, pharmaceuticals, and medical equipment is Johnson & Johnson, one of the best halal dividend stocks.
One of the biggest and most varied health organizations in the world, it is a legacy company with over a century of experience.
It has one of only two AAA prime credit ratings among American companies. The company, which has been around for 130 years, wants to provide access for many clients to inexpensive goods and healthcare items.
JNJ is regarded as a halal dividend stock to invest in since pharmaceuticals make up the majority of their revenue. The business also released its COVID-19 vaccinations, which brought them a lot of money.
JNJ reported sales of $24.8 billion and earnings per share of $2.13 in the fourth quarter of 2021. Sales climbed by 10% while the adjusted profit rose by roughly 15%.
Additionally, the dividend yield is at 2.55%.
Sales of the COVID-19 vaccine were quite strong and brought in $1.62 billion. As a consequence, this company now projects that vaccine sales will total between $3 billion and $3.5 billion in 2022.
Overall, Johnson & Johnson’s medical equipment segment had the highest increase, with reported sales rising by roughly 18%.
Sales of pharmaceuticals rose by more than 14%, while those of consumer health products rose by 4%.
This firm has done well as a stock and is now among the finest to invest in due to its ongoing attempts to improve its goods via new inventions.
The organization has passed screening and is regarded as one of the top halal dividend stocks to buy.
The 16 analysts that offer 12-month price estimates have a consensus price target of $184 for Johnson & Johnson, with the highest estimate at $215 and the lowest estimate at $163.
3M Company (NYSE: MMM)
The 3M Company, one of the best halal dividend stocks, is a multinational company that is active in the production of a wide variety of goods for use in several different markets.
The firm has always placed a high priority on its duties for its shareholders, as seen by the steps it took during the third quarter of 2022 when it delivered $1 billion to stakeholders in the form of dividends and share repurchases.
The business stands out as one of the best dividend companies on our list due to the healthy cash position it maintains as well as its track record of continuous dividend increases.
The 3M Company (NYSE:MMM) said on November 8 that it would continue to pay a quarterly dividend of $1.49 per share, which is the same amount as its last dividend payment.
The corporation has extended its trend of annual dividend increases to a total of sixty-four years, keeping its winning streak alive. As of the 7th of December, the price of the stock is reflecting a dividend yield that is now at 4.73%.
According to data compiled by Insider Monkey, as of the end of the third quarter of 2022, a total of 49 hedge funds had holdings in 3M Company (NYSE:MMM), with the total value of such positions topping $1.45 billion. These funds were monitored by Insider Monkey.
The Procter & Gamble Company (NYSE: PG)
The Ohio-based Procter & Gamble company is a global leader in the consumer products industry and trades under the symbol NYSE:PG, one of the best halal dividend stocks.
It is well-known for its expertise in a wide variety of personal care and hygiene products across a variety of categories.
Deutsche Bank raised its price target for the stock to $162 in December and gave a Buy rating to the shares, noting the company’s defensive characteristics and positive development gained over the years. The rise in Deutsche Bank’s price objective for the stock was announced.
For 132 years, The Procter & Gamble Company (NYSE:PG) has maintained its position as a significant player in dividend distribution within the United States.
This has enabled the company to establish itself as a prominent participant in dividend distribution within the country.
In addition, it is important of noting that the company has been able to keep up its tradition of annual dividend increases for the last 66 years in a row. The dividend yield for the firm is 2.44 percent as of the 7th of December when it started paying out a quarterly dividend of 0.9133 dollars per share.
The cash flow productivity of The Procter & Gamble Company (NYSE:PG) was very strong during the third quarter of 2022, coming in at 86%.
The total amount of the company’s quarterly revenues was $20.6 billion, which represents a 1.3% rise when compared to the same period in the prior year’s financial results.
When the current year is compared to the prior year, the company’s organic revenue witnessed a growth of 7%, which was likewise an increase.
At the end of the third quarter of 2022, it was noted that 69 hedge funds, as tracked by Insider Monkey, reported their holdings of shares in The Procter & Gamble Company (NYSE:PG).
This is a reduction from the count of 71 hedge funds that disclosed their ownership of shares in The Procter & Gamble Company (NYSE:PG) in the previous quarter. These investments have a total value that is more than $4.08 billion when combined.
Qualcomm (NASDAQ: QCOM)
Qualcomm, one of the best halal dividend stocks, is a business that offers wireless technology services, chips, and software. It is a well-known American brand with offices in Delaware, San Diego, and California.
The business has the rights to the CDMA2000, WCDMA, TD-SCDMA, 3G, 4G, and even 5G standards. They are successful in providing mobile communication services and are masters in them.
There are no haram profits since the firm concentrates on software, artificial intelligence, and mobile communication. The Qualcomm stock has a well-known Shariah-compliant dividend because of this.
Not only does Qualcomm’s dividend stock provide halal income, but it also boasts a profit margin of an astounding 27.7% and a dividend payment ratio of 27.5%.
By including its mobile services with the smartphone, Qualcomm has also supported the introduction of the Samsung S22 model in various nations. It has been anticipated that this would increase Qualcomm’s success by an additional 70%.
The future dividend yield on Qualcomm stock is 2.13%, while the revenue growth is 11.03%. Investing in Qualcomm in 2022 may be a wise move with a market valuation of $151.651 billion.
Kimberly-Clark Corporation (NYSE: KMB)
The Kimberly-Clark Corporation, which trades on the New York Stock Exchange under the ticker symbol KMB, is a worldwide manufacturing firm with headquarters in Texas.
It is particularly proficient in the manufacture of paper-based consumer goods. The company’s operational cash flow amounted to $798 million during the third quarter of 2022, reflecting a modest rise from the $782 million that was recorded during the same quarter of the previous year.
As a result of the company’s quarterly dividend payment of $392 million to its shareholders, we have included it on our list as one of the best dividend stocks.
The Kimberly-Clark Corporation (NYSE:KMB), one of the best halal dividend stocks, recently announced on November 17 that it would be paying out a quarterly dividend of $1.16 per share, which is the same amount as the dividend it paid out before.
The extraordinary track record of 50 years in a row of dividend increases is shown by the fact that the firm has maintained a lengthy tradition of making consistent dividend payments to its shareholders during its existence over the last 88 years. On December 7th, the dividend yield of the stock was determined to be 3.39 percent.
The number of hedge funds tracked by Insider Monkey that own interests in Kimberly-Clark Corporation (NYSE:KMB) had a significant rise, jumping from 24 in the previous quarter to 34 in Q3 2022.
This represents a significant increase from the previous quarter’s figure of 18 hedge funds. It is estimated that the total value of these holdings is somewhere around 680 million dollars.
As of the end of the third quarter, Two Sigma Advisors had established themselves as the most significant shareholder in the firm, with a position equal to or more than one million shares.
The Coca-Cola Company (NYSE: KO)
One of the most well-known beverage companies in the United States is The Coca-Cola Company, which trades under the ticker symbol KO on the New York Stock Exchange (NYSE).
The business concentrates its efforts on producing a wide variety of syrups, non-alcoholic drinks, and other beverages.
The company reported that its profitability during the third quarter of 2022 was much higher than had been anticipated. In comparison to the same period of the previous year, the company’s quarterly revenues came in at $11.1 billion, which represents an increase of 11% over that period.
The company’s free cash flow was reported at $7.3 billion during the first three quarters of the fiscal year, while the company’s operating cash flow reached a total of $8.1 billion during the same period.
The Coca-Cola Company (NYSE:KO), one of the best halal dividend stocks, is considered a top-tier dividend stock on our list owing to its historical track record of continuously providing dividends to its shareholders dating back to the year 1920.
This has earned the company a reputation as one of the most reliable dividend stocks in the business.
In addition, the company has had a consistent track record of dividend rise for the last six decades, which spans the whole lifespan of the company.
Since the 7th of December, the business has been paying out a dividend that is equal to $0.44 per share, which results in a dividend yield of 2.77%.
According to the database maintained by Insider Monkey, as of the completion of the third quarter of 2022, 59 hedge funds had ownership interests in The Coca-Cola Company (NYSE:KO) with a total value of $25 billion.
These ownership interests were held by the funds. With a total of 400 million shares, Berkshire Hathaway had the largest stake in the company and the largest interest in the organization.
Essex Property Trust, Inc. (NYSE: ESS)
Real estate investment trusts (REITs) are prevalent in the United States of America. Essex Property Trust, Inc. (NYSE:ESS) is one such REIT that specializes in the purchase and administration of residential apartment complexes.
The investment bank Morgan Stanley maintained an Equal Weight rating on the company throughout December and set a price objective of $242 for the shares.
An objective analysis of apartment Real Estate Investment Trusts (REITs) was conducted by the firm and presented in the context of the current market climate.
The revenue that was reported by Essex Property Trust, Inc. (NYSE:ESS), one of the best halal dividend stocks, for the third quarter of 2022 was $406.8 million, which represents an increase of 12.8% when compared to the revenue that was recorded for the same period in the previous year.
As of October, the total amount of liquidity the corporation owned was $1.1 billion. In addition, as part of the business’s continuous program to buy shares of its stock, the firm has completed repurchases of shares with a total value of more than $97.6 million.
It is widely believed that Essex Property Trust, Inc. (NYSE:ESS), which can be purchased on the market, is among the best dividend stocks.
In the course of the previous 28 years, the corporation has established a track record of continually increasing the amount of dividends it has paid out.
The current quarterly dividend paid by the firm is $2.20 per share as of the 7th of December, which results in a dividend yield of 4.14%.
Insider Monkey’s database shows that as of the end of September 2022, a total of 24 hedge funds have revealed the holding of interests in Essex Property Trust, Inc. (NYSE:ESS) with a combined worth of $210.7 million. These stakes were disclosed by the funds as of the end of the month.
Diamondback Energy (NASDAQ: FANG)
Among the best halal dividend stocks to think about is Diamondback Energy, or FANG. In a word, it’s an unbiased oil and gas company focused on the acquisition, production, and exploration of natural gas and oil reserves.
Its activities are mostly concentrated on the Permian Basin of West Texas. The company just recently made its fourth-quarter and annual financial statistics public. To start, total revenue for the quarter increased to $2.02 billion from $769 million in the previous quarter.
The company’s most recent quarter’s earnings per share were $3.63, beating the average estimate of $3.38 by $0.03. The oil sector also returned $515 million in cash to shareholders and increased its annual dividend by 20% to $2.40 per share.
FANG has enormous potential as a dividend investment as a result of its aspirational growth prospects and stable financial position.
The Clorox Company (NYSE: CLX)
The Clorox Company, one of the best halal dividend stocks, is a renowned American multinational firm that is involved in the manufacturing and marketing of consumer as well as professional goods.
The Clorox Company shares its stock on the New York Stock Exchange under the ticker code CLX. The corporation has its headquarters in California, although it does business around the whole world.
The manufacturing and distribution of cleaning and bleaching supplies is the company’s primary area of concentration.
In recognition of the company’s achievements within the context of the current economic environment, Deutsche Bank raised its price objective for the stock in December to $151, while keeping its Hold rating on the shares.
The Clorox Company (NYSE:CLX) reported an operating cash flow of $178 million for the first three quarters of the current fiscal year.
This is a considerable increase over the same time in the prior year when the company reported an operational cash flow of $41 million.
The organization had a total of $278 million in cash and cash equivalents at the end of the first fiscal quarter of 2023, which is an increase from $183 million that it had at the end of the previous quarter.
The Clorox Company, which is traded on the New York Stock Exchange under the ticker code CLX, has had an unbroken record of paying dividends to its stockholders for the last fifty years in a row, making this accomplishment one of its most notable achievements.
In addition, the corporation has shown a good pattern of consistently increasing the amount of dividends it has distributed over the preceding two decades, which has been paid out to shareholders.
As of the 7th of December, the dividend yield on the company’s stock was 3.18%, and the dividend payout was $1.18 per share quarterly.
The number of hedge funds with ownership holdings in The Clorox Company (NYSE:CLX) fell to 27 at the end of September 2022, according to data compiled and analyzed by Insider Monkey.
This is a drop from the previous quarter’s tally of 31 funds, which held ownership stakes in the company. More than $493.8 million is represented by the total value of these assets when added together.
During the third quarter, Ken Griffin and Jim Simons established themselves as significant owners of the company.
Exxon Mobil Corporation (NYSE: XOM)
The Exxon Mobil Corporation, one of the best halal dividend stocks, is a well-known American energy business that focuses on the distribution of natural gas.
The price target that Citigroup has set for the company was raised to $110 in November, although the firm has continued to retain a neutral rating on the shares.
The firm said that energy equities tend to demonstrate greater performance during earnings recessions and expressed a constructive perspective on the sector. In addition, the company expressed optimism about the future of the industry.
The significant achievement of Exxon Mobil Corporation (NYSE: XOM) in 2022 was the extension of its dividend increase streak to 40 consecutive years in a row, which was a significant milestone.
This accomplishment puts the firm in a position where investors looking for trustworthy dividend stocks will find it to be a very appealing alternative.
As of the 7th of December, the business now pays out a quarterly dividend to shareholders that amounts to $0.91 per share, which results in a dividend yield of 3.53%.
It is encouraging to see that the firm was able to generate a substantial amount of cash during the third quarter of 2022 as seen by the fact that it distributed a total dividend payment of $3.7 billion to its shareholders.
According to data compiled by Insider Monkey, as of the end of the third quarter of 2022, a total of 75 different hedge funds were reported to have ownership holdings in Exxon Mobil Corporation (NYSE: XOM).
This is an increase from the previous quarter when there were 72 hedge funds owning holdings in the company, which brings the total to 84.
The total value of these interests comes to $5.5 billion when added together. In the third quarter, it became clear that the most influential investor in the firm was GQG Partners, which is run by Rajiv Jain.
Final Thoughts
If you are interested in more than just the best halal dividend stocks, you may want to look at halal exchange-traded funds (ETFs) and halal real estate investment trusts (REITs). They are often accompanied by dividend yields that are both greater and more stable.
Otherwise, you might have a look at Sukuk (a halal bond). Although they do not provide dividends in the traditional sense, this is an excellent option to consider if you are interested in generating passive income.
Instead of investing on your own, you should seek the assistance of a financial adviser if you lack confidence in your abilities.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
