Investing

7 'Strong Buy' Dividend Kings to Own Now If the Fed Rate Increase This Week Is Huge

Illinois Tool Works

Investors looking for a strong industrial idea may want to consider this venerable company. Illinois Tool Works Inc. (NYSE: ITW) manufactures and sells industrial products and equipment worldwide. It operates through these segments:

  • Automotive OEM: Offers plastic and metal components, fasteners, and assemblies for automobiles, light trucks and other industrial uses.
  • Food Equipment: Provides warewashing, refrigeration, cooking and food processing equipment; kitchen exhaust, ventilation, and pollution control systems; and food equipment maintenance and repair services.
  • Test & Measurement and Electronics: Produces and sells equipment, consumables and related software for testing and measuring of materials and structures, as well as equipment and consumables used in the production of electronic subassemblies and microelectronics.
  • Welding: Produces arc welding equipment and metal arc welding consumables and related accessories.
  • Polymers & Fluids: Produces adhesives, sealants, lubrication and cutting fluids, as well as fluids and polymers for auto aftermarket maintenance and appearance.
  • Construction Products: Offers engineered fastening systems and solutions for the residential construction, renovation/remodel and commercial construction markets.

Shareholders receive a 2.48% dividend. J.P. Morgan has a $255 price target. The $219.06 consensus target on Illinois Tool Works stock is closer to Friday’s closing print of $196.97.

Leggett & Platt

While somewhat off the radar, this stock has almost been cut in half over the past year and offers massive upside potential. Leggett & Platt Inc. (NYSE: LEG) designs, manufactures and markets engineered components and products worldwide.

The company offers steel rods, drawn wires, foam chemicals and additives, innersprings, specialty foams, private label finished mattresses, mattress foundations, wire forms for mattress foundations, adjustable beds, industrial sewing and quilting machines, and mattress packaging and glue drying equipment, as well as machines to produce innersprings for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores and home improvement centers.

Leggett & Platt also provides mechanical and pneumatic lumbar support and massage systems for automotive seating; seat suspension systems, motors and actuators and cables; titanium, nickel and stainless-steel tubing, formed tubes, tube assemblies and flexible joint components for fluid conveyance systems; and engineered hydraulic cylinders to automobile original equipment manufacturers (OEMs) and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs.

Investors receive a 4.73% dividend. The target price on Leggett & Platt stock at Goldman Sachs is $50. The consensus target is $46.50, and shares closed Friday at $37.23.

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