In this article, we discuss 14 best dividend king stocks to buy now. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Best Dividend Kings Stocks to Buy Now.
Dividend Kings are companies that have a remarkable track record of consistently increasing their dividends to shareholders for close to 50 years or more. Achieving the status of a Dividend King is a significant accomplishment and demonstrates the company's financial stability and ability to generate consistent cash flow. While investors typically like it when a company increases its dividend payments, this is not the only reason they invest in that company. Historically, stocks of companies that consistently raise their dividends have also performed exceptionally well, bringing investors’ attention toward such equities.
According to a report by Hartford Funds, since 1973, companies that have either increased or started paying dividends have seen the highest returns compared to other stocks. These returns have been achieved with considerably less price fluctuation or volatility. The report mentioned that during this period, dividend growers and initiators delivered a 10.24% return while dividend cutters returned 3.95% to shareholders. The market is also favorable for dividends because a robust U.S. economy has allowed companies to increase their profits and cash reserves, leading to record-high levels of cash in their accounts.
In the first half of the year, dividend stocks faced a setback as investors flocked toward fast-growing tech stocks. However, as investment trends shifted and market sentiment became more uncertain, dividend stocks became attractive again. The data from the second quarter of 2023 supports this idea, as global dividends have increased. According to Janus Henderson, 88% of companies worldwide either raised or maintained their dividends in the second quarter. This added up to a total of $568.1 billion in dividend payments globally since the beginning of the year. The report also mentioned that 98% of the US companies either raised or held their dividends steady during the quarter.
Exxon Mobil Corporation (NYSE:XOM), Leggett & Platt, Incorporated (NYSE:LEG), and McDonald's Corporation (NYSE:MCD) are some of the companies that have raised their payouts for years, becoming top choices for investors. In this article, we have discussed some of the best dividend kings to buy now.
Our Methodology:
Achieving and maintaining Dividend King status is a sign of a company's ability to withstand economic downturns and market fluctuations. For this list, we scanned Insider Monkey's database of 910 hedge funds and picked dividend companies that have raised their dividends for 50 consecutive years or more. These companies have demonstrated resilience and financial stability over several decades. From the resultant list, we picked companies with the highest number of hedge fund investors tracked by Insider Monkey, as of Q2 2023.
Altria Group, Inc. (NYSE:MO) is an American company that primarily operates in the tobacco and related industries. The company is known for its prominent tobacco brands, including Marlboro, Copenhagen, Skoal, and Black & Mild. The company is one of the best dividend kings on our list as it has raised its payouts for 54 consecutive years. The company currently offers a quarterly dividend of $0.98 per share and has a dividend yield of 9.26%, as of September 24.
At the end of Q2 2023, 43 hedge funds tracked by Insider Monkey reported having stakes in Altria Group, Inc. (NYSE:MO), compared with 49 in Q2 2023. The collective value of these stakes is over $446.2 million. With over 7.2 million shares, Harris Associates was the company's leading stakeholder in Q2.
Target Corporation (NYSE:TGT) is one of America's largest retail corporations. The company operates a chain of discount department stores and retail stores in the country. On September 20, the company declared a quarterly dividend of $1.10 per share, which was in line with its previous dividend. It has been growing its dividends consistently for the past 52 years, which makes it one of the best dividend kings on our list. The stock's dividend yield on September 23 came in at 3.91%.
As of the close of Q2 2023, 45 hedge funds in Insider Monkey's database reported having stakes in Target Corporation (NYSE:TGT), compared with 46 in the previous quarter. The consolidated value of these stakes is over $882.8 million.
Diamond Hill Capital mentioned Target Corporation (NYSE:TGT) in its Q2 2023 investor letter. Here is what the firm has to say:
“We also purchased an ownership stake in Target Corporation (NYSE:TGT) , the US-based mass retailer. The company has experienced strong traffic growth over the past several years but was disproportionally impacted by poor internal inventory forecasting in 2022, which caused near-term profitability to be negatively impacted. As near-term headwinds subside, we believe Target can restore its margin profile on a sales base that has seen a significant increase since the beginning of the pandemic. The recent stock price sell-off related to near-term controversy concerns allowed us to initiate a position at an attractive discount to our estimate of intrinsic value. Looking past the next couple of quarters, we believe Target is well positioned to gain share longer-term due to its merchandising acumen, real estate locations and omnichannel capabilities.”
An American multinational diversified conglomerate, 3M Company (NYSE:MMM) is next on our list of the best dividend kings to buy now. The company was a part of 49 hedge fund portfolios at the end of Q2 2023, down slightly from 51 in the previous quarter. The collective value of stakes owned by these hedge funds is over $726.7 million.
In the second quarter of 2023, 3M Company (NYSE:MMM) generated strong cash with its operating cash flow for the quarter coming in at $1.5 billion, which showed a 34% growth from the same period last year. Its free cash flow also jumped 44% on a year-over-year basis at $1.5 billion.
3M Company (NYSE:MMM) has raised its dividends for 65 years running. The company pays a quarterly dividend of $1.50 per share and has a dividend yield of 6.18%, as recorded on September 23.
Emerson Electric Co. (NYSE:EMR) is a Missouri-based global manufacturing and technology company that operates in various industrial and commercial sectors. The company currently offers a quarterly dividend of $0.52 per share and has a dividend yield of 2.14%, as of September 23. Its dividend growth streak currently stands at 66 years, coming through as one of the best dividend kings on our list.
In the third quarter of 2023, Emerson Electric Co. (NYSE:EMR) reported revenue of $4 billion, which showed a 13.5% growth from the same period last year. Its operating cash flow came in at $842 million and its free cash flow is $769 million, showing a 76% and 83% year-over-year growth, respectively.
The number of hedge funds tracked by Insider Monkey owning stakes in Emerson Electric Co. (NYSE:EMR) grew to 49 in Q2 2023, from 47 in the previous quarter. The collective value of these stakes is over $1.77 billion. With over 3.6 million shares, Two Sigma Advisors was the company's leading stakeholder in Q2.
Becton, Dickinson and Company (NYSE:BDX) is a global medical technology company that mainly operates in the healthcare industry. In its most recent quarter, the company generated over $4.8 billion in revenues, which showed a 5.1% growth from the same period last year. For FY23, it expects its revenue to be approximately $19.3 billion.
Becton, Dickinson and Company (NYSE:BDX), one of the best dividend kings on our list, currently pays a quarterly dividend of $0.91 per share and has a dividend yield of 1.37%, as of September 23. The company holds a 51-year streak of consistent dividend growth.
As of the end of Q2 2023, 55 hedge funds in Insider Monkey's database reported having stakes in Becton, Dickinson and Company (NYSE:BDX), compared with 56 in the previous quarter. The collective value of these stakes is over $2.7 billion.
Colgate-Palmolive Company (NYSE:CL) is a New York-based multinational consumer products company that specializes in the production and distribution of a wide range of personal care and household products. On September 14, the company announced a quarterly dividend of $0.48 per share, which was consistent with its previous dividend. Overall, the company has raised its dividends for 61 consecutive years. The stock's dividend yield on September 23 came in at 2.65%.
Insider Monkey's database of Q2 2023 indicated that 58 hedge funds owned investments in Colgate-Palmolive Company (NYSE:CL), up from 55 a quarter earlier. The consolidated value of these stakes is more than $2.6 billion. With over 11 million shares, First Eagle Investment Management was the company's largest stakeholder in Q2.
The Coca-Cola Company (NYSE:KO) is an American multinational beverage company. In its second quarter 2023 earnings, the company posted a 6% year-over-year growth in its revenue at $12 billion. Year-to-date its operating cash flow came in at $4.6 billion and its free cash flow stood at $4 billion.
The Coca-Cola Company (NYSE:KO) is one of the best dividend kings on our list as the company has raised its payouts for 61 years straight. The company offers a quarterly dividend of $0.46 per share and has a dividend yield of 3.19%, as of September 23.
At the end of the June quarter of 2023, 61 hedge funds in Insider Monkey's database reported having stakes in The Coca-Cola Company (NYSE:KO), which remained unchanged from the previous quarter. The stakes owned by these hedge funds have a total value of over $27.2 billion.
Abbott Laboratories (NYSE:ABT) is a global healthcare company that operates in various segments of the healthcare industry. The company holds a 51-year streak of consistent dividend growth and currently pays a quarterly dividend of $0.51 per share. The stock's dividend yield on September 23 came in at 2.08%.
Insider Monkey's database of Q2 2023 indicated that 62 hedge funds owned investments in Abbott Laboratories (NYSE:ABT), worth collectively over $1.18 billion. Among these hedge funds, Diamond Hill Capital was the company's leading stakeholder in Q2.
PepsiCo, Inc. (NASDAQ:PEP) ranks sixth on our list of the best dividend kings to invest in. The multinational beverage and snack company reported revenue of $22.3 billion in the second quarter of 2023, which showed a 10.3% growth from the same period last year. The company also raised its FY23 guidance and now expects to deliver a 10% growth in its organic revenue.
PepsiCo, Inc. (NASDAQ:PEP) has been growing its dividends consistently for the past 51 years. It offers a quarterly dividend of $1.265 per share and has a dividend yield of 2.89%, as recorded on September 23.
As of the close of the June quarter of 2023, 68 hedge funds in Insider Monkey's database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), down from 70 in the previous quarter. The overall value of these stakes is over $3.5 billion.
