If you’re investing for dividends, looking at the list of dividend kings in the stock market are a must. They’re arguably the safest dividend stocks you could invest in. How is that, you ask?
Dividend kings, simply put, don’t ever cut their dividends. In fact, they’ve raised them every year for decades. That means if you’re investing for dividend income, you really never have to worry about your income being slashed or cut off by one of these companies.
Before I get ahead of myself, let me further explain what a dividend king actually is.
What is a Dividend King?
A dividend king is a company that has increased its dividend payouts to shareholders for at least 50 consecutive years. These companies are known for their stability, dependability, and commitment to returning value to shareholders through dividends.
The concept of a dividend king is similar to that of a dividend aristocrat, which you can read up on here.
Dividend kings, as we mentioned earlier, are the first stocks you should be looking at if you’re looking to dive in head first with dividend investing. Especially if you’re looking to limit risk.
5 of the Top Dividend Kings
Here are five of our personal favorite dividend kings, based on their long histories of consistently increasing dividends as well as their strong financial performance.
Coca-Cola is a multinational beverage company that has increased its dividends for 59 consecutive years. It is known for its iconic brand and wide range of products, including Coca-Cola, Sprite, and Fanta.
Coca-Cola has a 2.8% dividend yield that pays their shareholders $1.76 per share annually, split over quarterly payments. Making it $.44 per share every quarter.
Their yield falls on the lower end of the industry average of 2-5%, but is one of the safest dividend kings to hold in your portfolio.
Procter & Gamble (PG)
Procter & Gamble is a consumer goods company that has increased its dividends for 62 consecutive years. Its portfolio of brands includes Tide, Crest, and Pampers.
$PG has a dividend yield of 2.9% that pays investors $3.65 annually, which equates to $.91 every quarter per share. A strong dividend for one of the strongest dividend kings in the stock market.
3M is the popular diversified industrial giant with a hand in many different sectors. It has increased it’s dividends every year for 65 years running and has the 6th highest yield percentage of any dividend king.
With a yield of 4.69%, 3M pays out $5.96 per share annually to it’s shareholders, or $1.49 per share quarterly. One of the best dividend kings to invest in for high returns and stability.
Johnson & Johnson (JNJ)
Johnson & Johnson is a healthcare company that has increased its dividends for 60 consecutive years. Its portfolio of products includes consumer health products, medical devices, and pharmaceuticals.
$JNJ has a dividend yield of 2.59% and pays out $4.52 annually, coming out to $1.13 quarterly. Another strong and safe candidate to add to your dividend portfolio.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust is the leader in investing in real-estate for retail-based properties.
They carry a strong dividend yield of 4.25% with 55 years of consecutive dividend growth. They pay out $4.32 annually to their shareholders, coming out to $1.08 every quarter.
Which Dividend Kings Should You Invest In?
Aside from the five dividend kings we mentioned above, which ones you should invest in will really all come down to your investment strategy. You’ll first need to determine your risk tolerance, whether you want maximized returns, or if you prioritize receiving payouts every single month.
Are you aiming for maximized returns? You’ll want to look for the dividend kings with the highest yields and annual payouts. Altria (MO) would be a decent option, while on the riskier side with a very high payout ratio percentage.
Do you want a dividend king that pays out every single month? Unfortunately there aren’t any dividend kings that pay out monthly. BUT, if done right you can lineup and invest in different stocks by pay dates which will allow you to be paid every month.
For example, investing in 3M will allow you to receive dividends in March, June, September and December. If you couple this by investing in Federal Realty Investment Trust which pays out every January, April, July, and October, you’ll have eight of the 12 months out of the year covered.
Where to Research Dividend Kings
We hope this post has helped cover what a dividend king is and showed you why they’re some of the best investments, especially for a dividend-based portfolio. Before jumping in head first with dividend investing, always do in-depth research on each stock you’re looking to invest in.
Look for the dividend yield, payout ratio, growth rate, etc. as there is a lot that can determine the actual risk of the dividend. Two of our favorite resources for finding all of the necessary info regarding a dividend king is MarketBeat (this link will take you to their dividend king list) as well as Sure Dividend.
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