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Here's What's On Barron's List of Top Income Investments

Energy pipeline stocks top the Barron's income investment ranking for 2022, followed by U.S. dividend stocks.
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Barron’s has put together a list of income investments to consider for 2022. Its top two sectors in order of appeal are energy pipelines and U.S. dividend stocks.

As for pipelines, the sector bounced back this year from 2021’s stumble, “but it remains inexpensive and offers some of the highest yields in the stock market,” wrote Barron’s Andrew Bary.

He noted that “industry leaders” Williams Cos.  (WMB) - Get Williams Companies, Inc. Report, Kinder Morgan  (KMI) - Get Kinder Morgan Inc Class P Report, Enterprise Products Partners  (EPD) - Get Enterprise Products Partners L.P. Report, and Magellan Midstream Partners  (MMP) - Get Magellan Midstream Partners, L.P. Report yield 6% to 9%.

Morningstar’s Stephen Ellis likes Magellan Midstream. 

“Magellan Midstream Partners' third-quarter results were good, and the partnership increased its 2021 distributable cash flow guidance by $30 million to $1.1 billion,” he wrote last month.

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“We view both the historical repurchases and future program as good capital allocation and supportive of our exemplary capital allocation rating.

As for U.S. dividend stocks, Bary points out that pharmaceutical shares provide some of the best yields available for quality stocks.

Merck  (MRK) - Get Merck & Co., Inc. Report, Amgen  (AMGN) - Get Amgen Inc. Report, Bristol Myers Squibb  (BMY) - Get Bristol-Myers Squibb Company Report, and AbbVie  (ABBV) - Get AbbVie, Inc. Report sport yields of 3% or more with forward price-earnings ratios averaging about 10.

Morningstar analyst Damien Conover also likes Brystol Myers. 

"[It] hosted an investor day highlighting a strong pipeline that holds the potential to offset the firm’s major patent losses over the next decade, a key element supporting our wide moat rating," he wrote in a commentary last month.

Conover also likes Merck, writing in October that "the market under-appreciates Merck’s position in immuno-oncology and vaccines."