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 for 25 consecutive years. This year, 66 stocks made the cut and remain top picks across Wall Street.
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For those seeking even greater dividend dependability, investors may be drawn to the Dividend Kings. These 39 S&P 500 companies have raised their dividends a stunning 50 consecutive years in a row.
We screened the Dividend Kings looking for two things: stocks that were top-rated by some of Wall Street’s best equity analysts, and companies that make sense in a volatile and rising interest rate environment, as inflation is a huge concern now. While the following five 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.
Coca-Cola
This company 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 2.76% dividend. BofA Securities has a $70 target price on Coca-Cola stock. The consensus target is $67.39, and the final trade on Tuesday came in at $64.56 a share.
24/7 Wall St.Colgate-Palmolive
This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is a great stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned in its sector, given its strong brands in attractive categories, particularly oral care.
Over half of Colgate’s total revenues (52%) are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across Brazil, Russia, India and China. While those have slowed over the last year, a pickup in growth could be coming, especially with a weak dollar making products attractive overseas.
Colgate-Palmolive stock investors receive a 2.34% dividend. The Goldman Sachs price target is $95, and the consensus target is $85.63. Shares closed on Tuesday at $81.00 apiece.
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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 3.55% distribution. Deutsche Bank’s $143 price target compares with a $136 consensus and the close on Tuesday at $120.54 a share.
Hormel Foods
During even difficult times, people have to eat, and this stock is a pure play in the consumer defensive arena. Hormel Foods Corp. (NYSE: HRL) develops, processes and distributes various meat, nuts and other food products to retail, food service, deli and commercial customers in the United States and internationally.
The company provides various perishable products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles and bacons, as well as such shelf-stable products as canned luncheon meats, nut butters, snack nuts, chilies, microwaveable meals, hashes, stews, tortillas, salsas and tortilla chips.
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Hormel Foods also engages in the processing, marketing and sale of branded and unbranded pork, beef, poultry and turkey products. It offers nutritional food products and supplements, desserts and drink mixes, and industrial gelatin products. Its brands include Skippy, Spam, Hormel, Natural Choice, Applegate, Justin’s, Jennie-O, Café H, Herdez, Black Label, Sadler’s, Columbus, Gatherings, Wholly, Columbus, Planters, Planters Cheez Balls and Corn Nuts.
Investors receive a 1.96% dividend. Last month, Argus upgraded the stock to Buy with a $57 price target. Hormel Foods stock has a $47 consensus target, while the stock closed on Tuesday at $53.33.
Johnson & Johnson
With a diverse product base and an exceedingly popular and solid brand, this is among the most conservative big pharmaceutical plays, and vaccine demand could spike again. Johnson & Johnson (NYSE: JNJ) is one of the top market cap stocks in the health care sector and raised the dividend for shareholders this month for the 60th consecutive year.
With everything from medical devices to over-the-counter health items and prescription drugs, Johnson & Johnson remains one of the most diversified health care names on Wall Street. It also has one of the most exciting pipelines of new drugs in the sector, and it generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond. All that makes the stock an outstanding holding for conservative investors with a long-term investment outlook.
Shareholders receive a 2.36% yield. The $195 Citigroup price target is higher than the consensus target of $186.84. Johnson & Johnson stock closed trading at $179.90 on Tuesday.
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