First, it was David Solomon from Goldman Sachs, then Jamie Dimon from J.P. Morgan, in less than a week, warning of the possibility of a substantial stock market correction. Both cited the same reasons: skyrocketing national debt, tariffs, credit spreads, and a host of additional items. The most important reason, however, is that the stock market has been on a massive three-year run and likely needs a breather. It is trading at a gigantic 29 times trailing earnings, which compares with the five-year average of 25 and the 10-year average of 22.7. One thing is for sure: the question of a potential sell-off is not if it will occur but when. Given the precarious position investors find themselves in now, we decided to screen the Dividend Kings for the safest stocks in the group, all of which are rated Buy at top Wall Street firms that we cover.
The Dividend Kings are the 55 companies that have raised their dividends for 50 years, a testament to their dependability and reliability. Those are two “must-have” items for investors who rely on passive income to boost their overall revenue. Unlike the Dividend Aristocrats, the Dividend Kings do not have to be members of the S&P 500. When we searched for the safest Dividend King companies, we found that they have demonstrated exceptional financial stability and consistent dividend growth for at least 50 consecutive years, representing diverse sectors including technology services, financial services, retail, healthcare, and consumer goods.
Five top companies hit our screens, all making sense for worried growth and income investors looking to preserve capital while continuing to receive reliable passive income. All five are rated Buy at top Wall Street firms that we cover at 24/7 Wall St.
Why do we cover the Dividend Kings?
Companies that have raised their dividends for shareholders for 50 years or longer are the kind of investments that passive income investors need to own. Dependability is crucial for individuals seeking to increase their annual income through dividend stock investments. In addition, the safest companies in the group will hold up much better in a market sell-off than high-flying tech/AI stocks with no earnings.
Abbott Laboratories
This healthcare giant presents an excellent investment opportunity for investors with a 1.74% dividend. Abbott Laboratories Inc. (NYSE: ABT) is engaged in the discovery, development, manufacture, and sale of a broad and diversified line of health care products.
The company operates through four segments:
- Established Pharmaceutical Products
- Diagnostic Products
- Nutritional Products
- Medical Devices
The Established Pharmaceutical Products segment is engaged in the international sales of a broad line of branded generic pharmaceutical products.
The Diagnostic Products segment is engaged in the worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories, and alternate-care testing sites.
The Nutritional Products segment is involved in the worldwide sales of a broad line of adult and pediatric nutritional products.
The Medical Devices segment includes the worldwide sales of:
- Rhythm management
- Electrophysiology
- Heart failure
- Vascular
- Structural heart
- Neuromodulation
- Diabetes care products
Goldman Sachs has a $157 target price with their Buy rating, which would be a solid 17% gain.
Automatic Data Processing
This company, founded in 1949, is a global leader in payroll and HR services and provides cloud-based software trusted by over 80% of Fortune 100 companies. Automatic Data Processing Inc. (NYSE: ADP) is a global technology company engaged in providing cloud-based human capital management (HCM) solutions that unite HR, payroll, talent, time, tax, and benefits administration. The company pays a 2.11% dividend.
Its segments include:
- Employer Services
- Professional Employer Organization (PEO)
The Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees around the world, offering a range of technology-based HCM solutions, including its cloud-based platforms and human resource outsourcing solutions (other than PEO).
The company’s offerings include:
- Payroll Services
- Benefits Administration
- Talent Management
- HR Management
- Workforce Management
- Compliance Services
- Insurance Services
- Retirement Services
Its PEO business, called ADP TotalSource, provides clients with employment administration outsourcing solutions. ADP serves over 1.1 million clients in 140 countries and territories.
Mizuho has an Outperform rating with a $332 target price.
Procter & Gamble
Procter & Gamble Co. (NYSE: PG) was founded more than 185 years ago as a soap and candle company. It has paid dividends to shareholders since 1891, raised them for 70 straight years, and currently pays a 2.71% dividend. The company is focused on providing branded consumer packaged goods to consumers worldwide.
The company’s segments include:
- Beauty
- Grooming
- Health Care
- Fabric & Home Care
- Baby
- Feminine & Family Care
The company’s products are sold in approximately 180 countries and territories primarily through mass merchandisers, e-commerce, including social commerce channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, including airport duty-free stores, high-frequency stores, pharmacies, electronics stores, and professional channels.
It also sells directly to individual consumers. It has operations in approximately 70 countries.
Procter & Gamble offers products under these brands and others, such as:
- Head & Shoulders
- Herbal Essences
- Pantene
- Rejoice
- Olay,
- Old Spice
- Safeguard
- Secret
- SK-II
- Braun
- Gillette
- Venus
- Crest
- Oral-B
- Ariel
- Downy
- Gain
- Tide
- Always
- Always Discreet
- Tampax
- Bounty
Raymond James has an Outperform rating with a $185 price objective.
S&P Global
Founded in 1860, it offers critical insights and data for markets worldwide, providing credit ratings, analytics, and maintains indices like the Dow Jones while paying a 0.77% dividend. S&P Global Inc. (NYSE: SPGI) provides essential intelligence.
Its operations consist of five businesses:
- S&P Global Market Intelligence
- S&P Global Ratings
- S&P Global Commodity Insights
- S&P Global Mobility
- S&P Dow Jones Indices
Market Intelligence is a global provider of multi-asset-class data and analytics integrated with purpose-built workflow solutions.
Ratings is an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings, and benchmarks.
Commodity Insights is an independent provider of information and benchmark prices for the commodity and energy markets.
Mobility is a provider of solutions serving the whole automotive value chain, including vehicle manufacturers and retailers.
Indices is a global index provider that maintains a variety of valuation and index benchmarks for investment advisors, wealth managers, and institutional investors.
Morgan Stanley has an Overweight rating with a $620 target price.
Walmart
This company, founded in 1945, is the world’s largest retailer, with over 10,000 stores offering groceries, health products, and general merchandise. It also has a strong e-commerce platform and a 0.86% dividend. Walmart Inc. (NYSE: WMT) is a technology-powered omnichannel retailer.
Walmart operates retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India, and Mexico.
It operates in three reportable segments:
- Walmart U.S.
- Walmart International
- Sam’s Club U.S.
The Walmart U.S. segment includes the company’s mass merchandising concept in the U.S., as well as eCommerce, which provides omni-channel initiatives and other specific business offerings such as advertising services.
The Walmart International segment consists of the company’s operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives.
The Sam’s Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
Bank of America has a Buy rating with a $125 target price.
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