Consistency builds wealth. But consistency combined with momentum can be even more powerful.
Dividend Kings are the gold standard for long-term dividend growth, having raised their payouts for at least five decades through multiple economic cycles. It might be boring for some, but it is the type of boring that builds a strong income-growth portfolio. When some of these same companies are also delivering strong year to date gains and earning favorable analyst ratings, it highlights businesses that are not only reliable but also currently in demand. That is exactly the type of setup I set out to find.
How I came up with the following stocks
Using Barchart’s Stock Screener, I selected the following filters to get my list:
- YTD Percent Change: 1% or more. It limits the results to stocks that grew year-to-date. Then I will sort the list from highest to lowest.
- Number of Analysts: 12 or more. A high number of analysts offers a stronger conviction.
- Current Analyst Rating: Stocks that are well-liked by Wall Street, giving them a “Moderate” or “Strong Buy” rating.
- Dividend Investing Ideas: Dividend Kings.
I set these filters, ran the screen with 18 results, and I'll cover three companies with the highest year-to-date percent change.
Let’s start with the first Dividend King:
Colgate-Palmolive Company (CL)
Colgate-Palmolive is a global consumer products company that manufactures everyday essentials, including toothpaste, toothbrushes, soap, pet food, and cleaning products. Sold in more than 200 countries, there is a good chance that at least one is sitting in a household cabinet right now.
In its recent financial results, the company reported sales rose 6% YOY to $5.2 billion. Meanwhile, its net income fell a whopping 2150%, resulting in a $36 million net loss due to restructuring and impairment expenses. These scenarios typically occur when companies realign operations or streamline costs, which, in my opinion, is a positive. Fix what's broken.
Colgate-Palmolive has increased its dividends for 63 consecutive years. Today, it pays a forward annual dividend of $2.08, translating to a yield of approximately 2.12%. Further, the stock is up 24.16% year-to-date, the highest among my list of Dividend Kings.
While a consensus among 21 analysts rates the stock a “Moderate Buy”, there's as much as 7% upside if it hits its high target price of $105.
PPG Industries (PPG)
PPG Industries is a global manufacturer of paints, coatings, and specialty materials used in homes, buildings, automobiles, and industrial equipment. Its coatings help protect and finish everything from residential walls to commercial aircraft.
In its recent financial report, sales were up 5% YOY to $3.9 billion, and net income bounced back from a loss, up 207% to $300 million, which is pretty impressive.
PPG Industries also increased its dividends for 54 consecutive years. Currently, it pays a forward annual dividend of $2.84, translating to a yield of around 2.26%. And year-to-date, the stock is up 22.54%.
A consensus among 24 analysts rates the stock a “Moderate Buy” and suggests there could be a 12% upside should it hit its target high of $140.
Sysco Corp (SYY)
Sysco Corp is a global food distribution company that supplies restaurants, hospitals, schools, hotels, and other foodservice operators. With operations spanning multiple countries, it delivers the ingredients and kitchen essentials that help keep commercial kitchens running every day.
In its recent quarterly results, the company reported that sales increased 3% YOY to $20.8 billion. Meanwhile, net income decreased 4.2% to $389 million due to higher operating expenses.
Sysco increased its dividends for more than 50 consecutive years, and today pays a forward annual dividend of $2.16, translating to a yield of approximately 2.4%. Meanwhile, Sysco stock is up 21.96% since the start of the year.
Finally, a consensus among 17 Wall Street analysts rates the stock a “Moderate Buy”, with potential 13.3% upside if the stock manages to achieve its target price of $102.
Final Thoughts
These three Dividend Kings prove that stability does not have to be boring. While the year-to-date performance continues to attract attention, what made them popular in the first place is decades of consistency and reliability. And remember, these companies are invested in not just because of short-term gains, but also for their ability to thrive even in the toughest markets.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
