6 ‘Strong Buy’ Highest-Yielding Dividend Kings Are Incredible Q2 Ideas

At 24/7 Wall St., we know how important dividend size, stability and growth are to growth and income investors who rely on a dependable stream of income. We often have written about the opportunities that the Dividend Aristocrats offer for long-term investors. These are the companies that meet the guidelines for inclusion and have raised their dividends every year for 25 consecutive years. In 2022, 66 stocks made the cut, and they remain top picks across Wall Street.

For those seeking even greater dividend dependability, investors may be drawn to the Dividend Kings. These are the 39 companies in the S&P 500 that have raised the dividends they pay to shareholders a stunning 50 years in a row.

We screened the 39 Dividend Kings looking for two things: those that pay the highest dividends and those that have Buy ratings from top Wall Street firms. We found six that all make sense for growth and income investors looking for safety and dependability in a time when many investors have grown nervous.

While all six are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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AbbVie

This is a top pharmaceutical stock pick across Wall Street. AbbVie Inc. (NYSE: ABBV | ABBV Price Prediction) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.

One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.
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AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.

Shareholders receive a 3.62% dividend. J.P. Morgan has a Wall Street high target price of $180. The consensus target for AbbVie stock is $152.79. Shares closed on Monday at $161.97 apiece.

This maker of tobacco products offers value investors a great entry point now and was hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.

Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.

The company also is rolling out its own heated and vapor products, such as Marlboro HeatSticks and IQOS, both of which are slowly being expanded across the United States.

The company has increased its dividend for 52 consecutive years. Shareholders now receive a 6.98% dividend. Goldman Sachs recently upgraded Altria stock to Buy with a $57 target. The consensus target is $54.61, and the shares closed on Monday at $52.03.
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Federal Realty Investment Trust

While real estate has come back strongly, demand is still growing and hard assets are good in inflationary times. Federal Realty Investment Trust (NYSE: FRT) is a recognized leader in the ownership, operation and redevelopment of high-quality retail-based properties located primarily in major coastal markets from Washington, D.C., to Boston, as well as San Francisco and Los Angeles.

Founded in 1962, Federal Realty’s mission is to deliver long-term, sustainable growth through investing in densely populated, affluent communities where retail demand exceeds supply. Its expertise includes creating urban, mixed-use neighborhoods like Santana Row in San Jose, California, Pike & Rose in North Bethesda, Maryland, and Assembly Row in Somerville, Massachusetts.

Federal Realty’s 105 properties include approximately 3,000 tenants in 24 million square feet and over 2,600 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 51 consecutive years, the longest record in the real estate investment trust industry.

Unitholders receive a 3.64% distribution. The $150 Deutsche Bank price target is well above the $136.81 consensus target. Federal Realty Investment Trust stock closed at $119.29 on Monday.

This consumer staples leader is a safe bet for nervous investors. Kimberly-Clark Corp. (NYSE: KMB) is a manufacturer of tissue, personal care, and health care products. Global brands include Huggies, Kotex, Kleenex, Cottonelle, Viva, Scott, Depend and Poise, as well as Andrex in the United Kingdom.

Last year, the company notified U.S. and Canadian customers about plans to increase net selling prices for most of its North American consumer products business. The percentage increase in prices were in the mid-to-high single digits. Almost all the price increases came into effect by the end of last June via changes in list prices. In addition, Kimberly-Clark’s baby and child care, adult care and Scott bathroom tissue businesses were affected by this move.

Investors in Kimberly-Clark stock receive a 3.83% dividend. Jefferies has set a $146 target price. The consensus target is $130.49, and the final trade for Monday was reported at $122.43.
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Northwest Natural

This off-the-radar utility stock is another good choice for conservative investors looking for income and safety. Northwest Natural Holding Co. (NYSE: NWN), through subsidiary Northwest Natural Gas, provides regulated natural gas distribution services to residential, commercial, industrial and transportation customers in Oregon and southwest Washington.

The company also operates 5.7 billion cubic feet of the Mist gas storage facility contracted to other utilities and third-party marketers; offers natural gas asset management services; and operates an appliance retail center. In addition, it engages in gas storage, water, non-regulated renewable natural gas and other investments and activities.

The company provides natural gas service through approximately 786,000 meters and water services to approximately 80,000 people through approximately 33,000 water and wastewater connections in the Pacific Northwest and Texas.

Shareholders receive a 3.63% dividend. The Northwest Natural stock target price at Maxim is $74, while the consensus target is just $55.71. The closing share price on Monday was reported at $54.59.

This top company could really benefit from continued economic pick-up, and the shares are down big this year. 3M Co. (NYSE: MMM) operates as a diversified technology company worldwide. It operates through the following four segments.

The Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; auto body repair solutions; closure systems for personal hygiene products, masking and packaging materials; electrical products and materials for construction and maintenance, power distribution and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye and fall protection solutions; and natural and color-coated mineral granules for shingles.

The Transportation and Electronics segment provides ceramic solutions; attachment tapes, films, sound and temperature management for transportation vehicles; premium large format graphic films for advertising and fleet signage; light management films and electronics assembly solutions; packaging and interconnection solutions; and reflective signage for highway and vehicle safety.

The Health Care segment offers food safety indicator solutions; health care procedure coding and reimbursement software; skin, wound care and infection prevention products and solutions; dentistry and orthodontic solutions; and filtration and purification systems.

The Consumer segment provides consumer bandages, braces, supports and consumer respirators; cleaning products for the home; retail abrasives, paint accessories, car care DIY products, picture hanging and consumer air quality solutions; and stationery products.

The company offers its products through e-commerce and traditional wholesalers, retailers, jobbers, distributors and dealers.

Shareholders receive a 4.13% dividend. The Argus target price of $190 compares with a $168.31 consensus target and the most recent close at $149.47.
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Any company that has paid shareholders dividends for 50 years or more is the epitome of safe and dependable. Toss in the fact that all these outstanding stocks have support from top Wall Street analysts, which make them good ideas for nervous investors. In these turbulent times, “better safe than sorry” are words to live by, for sure.