Investing
7 'Strong Buy' Dividend Kings to Move to Fast in Case of Total Market Meltdown
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At 24/7 Wall St., we know how important dividend size, stability and growth are to growth and income investors who need 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. This year, 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 44 S&P 500 companies have raised the dividends they pay to shareholders for a stunning 50 consecutive years.
With the market wobbling and looking like it may be headed much lower, it may be time for investors to look for momentum or high beta stocks lurking in their portfolios, especially if they are still profitable or flat, and move the capital invested in them to the safest Dividend Kings. We found seven that fit the bill, and all are rated Buy at major Wall Street firms.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
AbbVie
This is a top pharmaceutical stock pick across Wall Street. AbbVie Inc. (NYSE: ABBV) 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.
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 3.61% dividend. J.P. Morgan’s $180 target price on AbbVie stock is a Wall Street high. The consensus price target is $163.99, and shares closed trading on Wednesday at $157.62 apiece.
Altria
This maker of tobacco products offers value investors a great entry point now and it has increased its dividend for a stunning 53 consecutive years. 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.
Shareholders receive a 6.56% dividend. Goldman Sachs recently upgraded Altria stock to a Buy rating with a $57 target price. The $54.60 consensus target compares with the most recent close at $54.92 a share.
Black Hills
This Dividend King is way off the radar for many, but it is among the safest plays now. Black Hills Corp. (NYSE: BKH) operates as an electric and natural gas utility company in the United States.
The Electric Utilities segment generates, transmits and distributes electricity to approximately 218,000 electric utility customers in Colorado, Montana, South Dakota and Wyoming. It owns and operates 1,481.5 megawatts of generation capacity and 8,892 miles of electric transmission and distribution lines.
The Gas Utilities segment distributes natural gas to approximately 1,094,000 natural gas utility customers in Arkansas, Colorado, Iowa, Kansas, Nebraska and Wyoming. It owns and operates 4,732 miles of intrastate gas transmission pipelines, 41,644 miles of gas distribution mains and service lines, six natural gas storage sites and approximately 50,000 horsepower of compression and 515 miles of gathering lines.
The company also constructs and maintains gas infrastructure facilities for gas transportation customers, and it provides appliance repair services to residential utility customers, as well as electrical system construction services to large industrial customers. In addition, it produces electric power through wind, natural gas and coal-fired generating plants, as well as coal at its coal mine located near Gillette, Wyoming.
Black Hills stock investors receive a 3.12% dividend. BofA Securities has an $87 target price, and the consensus target is $81.00. The stock closed at $75.91 on Wednesday.
24/7 Wall St.Coca-Cola
This is a top Warren Buffet holding, and he owns a massive 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.
Led by Coca-Cola, one of the world’s most valuable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Investors receive a 2.71% dividend. The Truist Financial target price is $75. The consensus target is $69.43, and the closing share price for Coca-Cola stock on Wednesday was $65.56.
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 Boston to Washington, 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 3.58% distribution. The $143 Deutsche Bank price target is well above the $135.63 consensus target for Federal Realty Investment Trust stock. Wednesday’s close was at $118.72.
24/7 Wall St.Kimberly-Clark
This consumer staples leader is another safe bet for nervous investors. Kimberly-Clark Corp. (NYSE: KMB) manufactures and markets personal care and consumer tissue products worldwide. It operates through the following three segments.
The Personal Care segment offers disposable diapers, swim pants, training and youth pants, baby wipes, feminine and incontinence care products, and other related products under the Huggies, Pull-Ups, Little Swimmers, GoodNites, DryNites, Sweety, Kotex, U by Kotex, Intimus, Depend, Plenitud, Softex, Poise and other brands.
The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve and other brands.
The K-C Professional segment offers wipers, tissues, towels, apparel, soaps and sanitizers under the Kleenex, Scott, WypAll, Kimtech and KleenGuard brands.
The company sells its household use products directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through other distributors and e-commerce. It sells away-from-home use products directly to manufacturing, lodging, office building, food service and public facilities, as well as through distributors and e-commerce.
Kimberly-Clark stock comes with a 3.33% dividend. Jefferies has set a $146 target price, while the consensus target is $132.53. The final trade Wednesday was reported at $140.48 a share.
24/7 Wall St.Northwest Natural
This off-the-radar utility stock is another good choice for worried 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 3.90% dividend. The Maxim target price is $62, and the consensus target is $55. Wednesday’s closing share price was $49.17.
Any company that has paid rising dividends for 50 years or more is the epitome of safe and dependable. All these outstanding stocks have support from top Wall Street analysts, making them good ideas for nervous investors. In these turbulent times, “better safe than sorry” are words to live by for sure, especially given the multitude of events and situations threatening a stock market that ran way past its intrinsic value some time ago.
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