Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

A study from the Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the past half-century (1973-2023). Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

While passive income shareholders have endured a tough stretch over the last two years, 2024 could be the year many interest rate-sensitive stocks bounce back with a vengeance. While the possibility of one final interest rate hike still looms if inflation rears its head again, many across Wall Street feel that the Federal Reserve will have started lowering rates by next year. 

Investors seeking dividend dependability may be drawn to the Dividend Kings. These 53 companies have raised their dividends for 50 consecutive years or more. We decided to screen the list for stocks that have underperformed this year but may be poised for a big turnaround. All are rated buy by top Wall Street firms. 

Why we recommend the Dividend Kings

Companies that have paid and raised their dividends for 50 years and longer are precisely the kind that growth and income investors want to buy and hold in stock portfolios forever. These stocks are, for the most part, conservative, and should we see a dramatic market correction, they will likely hold their ground much better than volatile technology names.

AbbVie

This stock is one of the top pharmaceutical stock picks across Wall Street and pays a dependable 3.88% dividend. AbbVie Inc. (NYSE: ABBV) discovers, develops, manufactures, and sells pharmaceuticals worldwide.

The company offers:

• Humira, an injection for autoimmune and intestinal Behçet’s diseases and pyoderma gangrenosum;
• Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn’s disease;
• Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn’s disease;
• Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma;
• Elahere to treat cancer; and
• Venclexta/Venclyxto to treat blood cancers.

It also provides:

• Facial injectables, plastics and regenerative medicine, body contouring, and skin care products
• Botox therapeutic
• Vraylar for depressive disorder
• Duopa and Duodopa to treat advanced Parkinson’s disease
• Ubrelvy for the acute treatment of migraine in adults
• Qulipta for episodic and chronic migraine

In addition, the company offers Ozurdex for eye diseases, Lumigan/Ganfort and Alphagan/Combigan for reducing elevated intraocular pressure in patients with open-angle glaucoma or ocular hypertension, Restasis to increase tear production, and other eye care products.

Further, it provides:

• Mavyret/Maviret to treat chronic hepatitis C virus genotype 1-6 infection
• Creon, a pancreatic enzyme therapy
• Lupron to treat advanced prostate cancer, endometriosis, and central precocious puberty, and patients with anemia caused by uterine fibroids
• Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation
• Synthroid for hypothyroidism

Coca-Cola

This company remains a top Warren Buffet holding as he owns a massive 400 million shares, 9.3% of the float and 6.4% of the portfolio. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the Company’s portfolio features 20 billion-dollar brands, including:

• Diet Coke
• Fanta
• Sprite
• Coca-Cola Zero
• Vitaminwater
• Powerade
• Minute Maid
• Simply
• Georgia
• Del Valle

Globally, they are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juice drinks.

Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of more than 1.9 billion servings a day. It’s also important to remember that the company owns almost 20% % of Monster Beverage (NASDAQ: MNST), which continues to deliver big numbers.

Investors are paid a very dependable 3.06% dividend.

Kenvue

Spun off from Johnson & Johnson Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 3.72% dividend. Kenvue Inc. (NYSE: KVUE) is a global consumer health company.

The company operates through three segments:

• Self Care
• Skin Health and Beauty
• Essential Health

The self-care segment offers cough, cold, and allergy pain care, digestive health, smoking cessation, and other products under:

• Tylenol
• Nicorette
• Zyrtec brands

The Skin Health and Beauty segment provides face and body care, hair care, sun care, and other products under:

• Neutrogena
• Aveeno
• OGX brand names

The Essential Health segment offers oral and baby, women’s health, and wound care products under:

• Listerine
• Johnson’s
• Band-Aid
• Stayfree brands

Kimberly-Clark

This consumer staples leader is a safe bet for nervous investors, paying a dependable 3.98% dividend. Kimberly Clark Corp. (NYSE: KMB) and its subsidiaries manufacture and market personal care and consumer tissue products worldwide.

It operates through three segments:

• Personal Care
• Consumer Tissue
• K-C Professional

The Personal Care segment offers a diverse range of products, including:

• 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 brand names, showcases the company’s resilience and adaptability.

The Consumer Tissue segment provides facial and bathroom tissues, paper towels, napkins, and related products under Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Neve, and other brand names.

The K-C Professional segment offers wipers, tissues, towels, apparel, soaps, and sanitizers under the Kleenex, Scott, WypAll, Kimtech, and KleenGuard brands.

Target

This company remains a solid and safe retail total return play despite some rough public relations issues last year and pays a solid 3.17% dividend. Target Corp. (NYSE: TGT) is a general merchandise retailer in the United States.

The company offers apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as jewelry, accessories, shoes, beauty and personal care, baby gear, cleaning, paper products, and pet supplies.

Target’s product portfolio is diverse, catering to a wide range of consumer needs. It offers:

• Dry grocery
• Dairy
• Frozen food
• Beverages
• Candy
• Snacks
• Deli
• Bakery
• Meat, and food service
• Electronics
• Toys
• Entertainment
• Sporting goods and luggage
• Furniture
• Lighting
• Storage
• Kitchenware
• Small appliances
• Home décor
• Bed and bath
• Home improvement
• School/office supplies
• Greeting cards and party supplies
• Seasonal merchandise

Target employs a multi-channel sales strategy, selling its merchandise through periodic design and creative partnerships, and shop-in-shop experiences. It also offers in-store amenities to enhance the shopping experience. The company’s products are available through its physical stores and digital channels, including Target.com.

The company suffered a “Bud Light” moment last year after disastrous merchandising of LBGTQ products struck a nerve with many shoppers. While not as bad as the beer giants’ conundrum, it still proved to be a huge negative that has seemingly subsided some.

∴

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.