Investing

5 Virtually Unknown Dividend Kings That Generate Strong Passive Income

Lee Jackson

Published: February 27, 2024 8:25 am

Over the last two years, interest rates have jumped from historical lows of 0% to the highest level since 2007 at 5.5%. 30 FHA Mortgages have jumped from 2.65% in January of 2021 to the current 7.56% rate. During that period, any stock that was the least sensitive to interest rates got hammered, and the damage trail covered several sectors.

While it was a tough stretch for shareholders, 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 to lower rates by next year.

For those seeking dividend dependability, investors may be drawn to the Dividend Kings. These are the 53 companies that have raised the dividends they pay to shareholders for a stunning 50 consecutive years in a row or longer.

We screened the list for stocks that investors may need to become more familiar with and found five top companies that pay hefty dividends and offer investors some very solid passive income. Passive income is a steady stream of unearned income that doesn’t require active traditional work. Ideas for earning passive income include investments, real estate, or side hustles.

Federal Realty Investment Trust

Source: Davel5957 / iStock via Getty Images

While real estate has been hit strongly, hard assets are good during periods of inflation, and this stock pays a solid 4.35% dividend. 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, San Francisco, and Los Angeles.

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
• Assembly Row in Somerville, Massachusetts

Federal Realty’s 102 properties include approximately 3,300 26 million square feet tenants and over 3,100 residential units. Federal Realty has increased its quarterly dividends to its shareholders for 56 consecutive years, the longest record in the REIT industry.

Northwest Natural Holding

Source: trekandshoot / iStock via Getty Images

This off-the-radar utility stock is good for worried conservative investors and pays a large 5.44% dividend. Northwest Natural Holding Company (NYSE: NWN), through its subsidiary, Northwest Natural Gas Company, 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
• 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 in Oregon and southwest Washington and water services to roughly 80,000 people through approximately 33,000 water and wastewater connections in the Pacific Northwest and Texas.

Universal Corporation

Source: Matt Cardy / Getty Images News via Getty Images

While this company’s products may not be for everyone, they have strong demand, have been in business for almost 150 years, and offer shareholders a hefty 6.48% dividend. Universal Corporation (NYSE: UVV) processes and supplies leaf tobacco and plant-based ingredients worldwide.

The company operates through two segments:

• Tobacco Operations 
• Ingredients Operations

It is involved in procuring, financing, processing, packing, storing, and shipping leaf tobacco for sale to manufacturers of consumer tobacco products.

The company contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes and dark air-cured tobaccos principally used in the manufacture of cigars, naturally wrapped cigars and cigarillos, smokeless and pipe tobacco products.

Universal Corporation also provides value-added services, including:

• Blending, chemical, and physical tobacco testing
• Service cutting for various manufacturers
• Manufacturing reconstituted leaf tobacco
• Just-in-time inventory management services
• Electronic nicotine delivery systems
• Customer smoke testing services

Consolidated Edison

Source: Ingus Kruklitis / iStock via Getty Images

This old-school utility stock offers income investors the stability and track record many seek now and a solid 3.78% dividend. Consolidated Edison Inc. (NYSE: ED), through its subsidiaries, engages in the regulated electric, gas, and steam delivery businesses in the United States.

It offers electric services to approximately:

• 3.6 million customers in New York City and Westchester County
• Gas to about 1.1 million customers in Manhattan, the Bronx, parts of Queens, and Westchester County
• Steam to approximately 1,530 customers in parts of Manhattan

The company also supplies electricity to approximately 0.3 million customers in southeastern New York and northern New Jersey and gas to about 0.1 million customers in southeastern New York.

In addition, it operates:

• 543 circuit miles of transmission lines
• 15 transmission substations
• 63 distribution substations
• 87,951 in-service line transformers
• 3,869 pole miles of overhead distribution lines
• 2,320 miles of underground distribution lines
• 4,359 miles of mains
• 377,741 service lines for natural gas distribution

Consolidated Edison owns, develops, and operates renewable and energy infrastructure projects, provides energy-related products and services to wholesale and retail customers, and invests in electric and gas transmission projects.

Kenvue

Source: skhoward / Getty Images

Spun off from Johnson & Johnson, Inc. (NYSE: JNJ) last year, this potential total return home run pays a solid 4.17% 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