Investing

2 Dividend Kings Yielding Over 3% to Pick up This December

Joey Frenette

Published: December 11, 2024 9:04 am

For passive income seekers, it really doesn’t get much more prestigious than the Dividend Kings, which are firms that have increased their dividend payouts for a minimum of 50 straight years. Indeed, with the group, you’re going to be looking at some pretty old companies, many of which may have lost some of their growth luster in recent decades.

That said, if yield, dividend growth, steady appreciation, relative stability, and value in a somewhat pricey and extended stock market are what you’re after, the group certainly is worth a closer look. In this piece, we’ll check out two of my favorite Dividend Kings with yields north of 3% that I view as quite promising as we head into 2025.

Sure, the following names aren’t half as exciting as the likes of a Palantir (NASDAQ:PLTR), but I do view them as intriguing places to be for those who don’t want to run the risk of sticking behind once the tech trade experiences its next blow-up. Whether that’s in the form of a mild correction, a lengthy cooldown, or a vicious crash, the hot run in AI and tech stocks probably won’t stay smooth for the long haul.

Key Points About This Article

• The steady Dividend Kings stand out as great places to get paid to wait as the rally runs its course.
• If you value passive income, the following names stand out as great value buys after their respective corrections.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Coca-Cola

Coca-Cola (NYSE:KO) stock is one of those Warren Buffett names worth checking out anytime it falls into a correction. The stock’s now down around 14% from its all-time highs due to “near-term challenges,” but looks well-equipped to bounce back in the new year as CEO James Quincey maintains focus on “long-term growth opportunities.”

Undoubtedly, leveraging artificial intelligence (AI) for targeted marketing seems like an opportunity for the firm to bolster its brand. However, thus far, it seems like Coke’s AI holiday ad hasn’t had as warm a reception as hoped. As the company looks to increase automation at some of its plants, perhaps the firm can jolt margins and offset higher costs.

While robotic process automation opportunities won’t pay dividends overnight, I do think Coke stands as a major winner once the robotic theme really starts to take off, perhaps in the latter part of the decade. Either way, the stock’s cheap (26.1 times trailing price-to-earnings), with a 3.1%-yielding dividend to collect while you wait. And if there’s a recession that rocks markets at some point, KO also stands out as a less-choppy place to hide out.

It’s a Dividend King that can increase dividends even through the worst of economic rough patches. And while it’s not an immediate AI beneficiary, I do see benefits trickling down as the firm explores cost-saving options the new tech can provide.

Exxon Mobil

Exxon Mobil (NYSE:XOM) is another Dividend King that’s trailed the S&P 500 so far this year, with just 10% gains year to date. Undoubtedly, the big oil firm looks fairly cheap way to score a nice, growing dividend. At 14.1 times trailing price-to-earnings, you’re getting a well-oiled business that pays a growing 3.5%-yielding dividend.

With the firm laying off 400 following its acquisition of Pioneer Natural, questions linger as to where the firm heads next. More recently, Exxon was reportedly considering selling off some of its gas stations in Singapore, a move that could shore up close to $1 billion. Indeed, there are definitely more lucrative areas where the energy giant can invest the cash.

Even after slipping 10% from recent highs, Jim Cramer views XOM stock as overvalued compared to peer Chevron (NYSE:CVX), which has an even more bountiful yield of 4.15% at the time of writing. Personally, I think you can’t go wrong with either big energy name as they move into a new year with relatively modest expectations.

Regardless of where oil prices head, Exxon stands out as a behemoth that can fare better than some of the smaller players in the oil patch.