While many retail investors continue to chase the usual suspects in the innovation space, nothing lasts forever, which brings us to dividend king stocks to buy. These are some of the most profitable enterprises, featuring consecutive payout increases for at least 50 years.
Much like a monster truck rally, the idea here isn’t about using skill and chicanery to move past your opponent. No, it’s about running over anything that gets in your way. It lacks any semblance of finesse and so we’re not targeting dividend king stocks to buy for massive upside success. Rather, it’s to keep us in the game.
With uncertainties clouding the broader narrative tech sector outflows and the rising price of gold, investors could use some reassurances. If that’s you, here are some dividend king stocks to buy to help you sleep easy at night.
Emerson Electric (EMR)
Operating under the industrials umbrella – specifically the specialty industrial machinery subsegment – Emerson Electric (NYSE:EMR) isn’t exactly a sexy enterprise. However, it’s a relevant one, thus making a great case for dividend king stocks to buy. Per its public profile, Emerson provides various solutions for customers in the industrial, commercial and consumer markets across the world.
One of the key reasons to consider Emerson is its passive income. No, with a forward yield of 1.85%, EMR isn’t the most generous idea among dividend king stocks to buy. However, the payout ratio is quite low – and thus sustainable – at 35.62%. Further, the company has been increasing its dividend for the past 67 years. That’s a status management will surely want to keep going.
Although it incurred a blip in the third quarter last year, the overall average positive earnings surprise came out to 11.38% in fiscal 2023. For fiscal 2024, analysts anticipate earnings per share of $5.39 on revenue of $17.58 billion. That’s a noticeable improvement over last year’s print of earnings of $4.44 on sales of $15.16 billion.
Colgate-Palmolive (CL)
One of the top names in the broader consumer defense industry, Colgate-Palmolive (NYSE:CL) plies its trade in the household and personal products segment. Per its public profile, Colgate-Palmolive operates through various segments: Oral, Personal, and Home Care and Pet Nutrition. The company is best known for its toothpaste and toothbrushes but it also carries other well-known brands like Lady Speed Stick.
While it’s not riveting in any sense of the imagination, CL makes a solid case for dividend king stocks to buy. Currently, the company offers a forward yield of 2.25%. That’s a bit higher than the consumer staple sector’s average yield of 1.89%. Also ,the payout ratio is 52.53%, providing confidence for yield sustainability. Lastly, Colgate enjoys 61 years of consecutive payout increases.
Last fiscal year, the company’s average positive earnings surprise came out to 4.23%. It’s not lighting up the board but it delivers consistent results. For the current fiscal year, analysts anticipate EPS of $3.49 on revenue of $20.18 billion. That’s above last year’s print of $3.23 EPS and $19.46 billion in sales.
Procter & Gamble (PG)
Another stronghold in the consumer defensive industry, Procter & Gamble (NYSE:PG) provides branded consumer packaged goods worldwide. Per its corporate profile, P&G operates through five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. Some of the company’s top brands include Head & Shoulders, Olay, and Crest, to name but a few.
Along with the everyday relevance, investors gravitate toward P&G for its passive income. Right now, the company offers a forward yield of 2.34%, again above the sector average of 1.89%. As with rival Colgate-Palmolive, the payout ratio is quite reasonable at 54.06%. Also, with 68 years of consecutive payouts under its belt, management won’t give up this track record without a fight.
Last fiscal year, the company beat all its quarterly bottom-line projections. Overall, the average positive earnings surprise came out to 5.55%. For fiscal 2024, experts believe that EPS will reach $6.45 on sales of $84.78 billion. That would be an improvement over last year’s print of $5.90 EPS on revenue of $82.01 billion.
Genuine Parts (GPC)
Conducting business under the consumer cyclical arena, Genuine Parts (NYSE:GPC) specifically falls under specialty retail. According to its corporate profile, Genuine distributes automotive replacement parts. It also provides industrial parts and materials. Notably, its automotive parts replacement covers the whole gamut: trucks, SUVs, buses, hybrids, electric vehicles, and even farm equipment.
With money tight in a tricky economy, Genuine Parts’ business could rise simply due to necessary demand. That makes GPC one of the more credible ideas for dividend king stocks to buy. As for passive income, the company provides a forward yield of 2.46%. Further, the payout ratio sits at 35.67%. That’s an awfully enticing balance. Also, the company features a 69-year track record of consecutive annual payout increases.
As with many other established names, Genuine beat all its quarterly bottom-line targets last fiscal year. Overall, the average positive earnings surprise came out to 4.3%. For fiscal 2024, experts believe EPS will hit $9.78 on revenue of $23.82 billion. That’s up from last year’s EPS of $9.33 on sales of $23.09 billion.
Coca-Cola (KO)
A company that really needs no introduction, Coca-Cola (NYSE:KO) ranks among the top dividend king stocks to buy. Part of the consumer defensive industry, Coca-Cola offers multiple non-alcoholic beverages. Obviously, it’s best known for its namesake product. However, it also offers other popular brands such as Fanta, Costa and Schweppes.
With consumer funds getting tight, I imagine more people will seek their caffeine fix at the grocery store rather than at the storefront of a trendy (but super-expensive) coffee shop. For investors, they’re likely going to be enticed with the company’s forward yield of 3.03%. And while the payout ratio is a bit elevated at 61.34%, it’s not too bad. Further, the 63-year track record of consecutive annual payout increases should help calm jitters.
Coca-Cola enjoyed a decent year in fiscal 2023, with the “worst” performance being posting 49 cents per share in Q4. That merely met the consensus expectation. For the current fiscal year, EPS may reach $2.81 on sales of $45.81 billion. If so, the top line could expand 8.1% from last year’s print of $42.39 billion.
Archer Daniels Midland (ADM)
One of the most relevant ideas for dividend king stocks to buy, Archer Daniels Midland (NYSE:ADM) operates in the consumer defensive space. Specifically, it falls under farm products. Per its corporate profile, Archer engages in the procurement, transportation, storage, processing and merchandising of agricultural commodities, ingredients, flavors and solutions in multiple countries. It also engages in agricultural commodity and feed product import, export and distribution.
With the global food supply chain in focus, ADM should garner intrigue among forward-looking investors. For passive income, the company provides a forward annual dividend yield of 3.21%. Notably, the payout ratio sits at just under 28%, which is a remarkable print. Basically, you would be getting a strong yield with reassurances regarding yield sustainability.
It’s also significantly undervalued, trading at a forward earnings multiple of 11.64X. That’s lower than over 70% of the competition. Now, some of that is due to reduced expectations for fiscal 2024, with projected revenue of $90.9 billion down 3.2% from last year’s result.
Still, the most optimistic target calls for $100.64 billion. If you want to speculate, ADM could be enticing.
Northwest Natural (NWN)
Operating under the utilities umbrella, Northwest Natural (NYSE:NWN) via its subsidiary provides regulated natural gas distribution services to residential, commercial and industrial customers in the U.S. According to the company’s corporate profile, Northwest operates a mist gas storage facility contracted to other utilities, third-party marketers and electric generators. It also offers natural gas asset management services.
As a utility player, the company should enjoy high barriers of entry. Stated differently, Northwest is entrenched, making it a viable play for dividend king stocks to buy. On the passive income front, the utility specialist offers a very generous yield of 5.32%. Now, to be fair, it comes at the risk of a heightened payout ratio of 75%. Still, this is a very tempting offer.
In part, that’s because the company has beaten its per-share bottom-line quarterly targets in fiscal 2024. It also seems attractively priced at 1.25X tangible book value. That said, analysts anticipate reduced earnings and growth in fiscal 2024.
Still, a possible recovery could be in the works for fiscal 2025, making NWN a worthwhile wager.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
