Dividend Kings—stocks that have increased dividends for over 50 years—are rare. Out of the thousands of companies listed on the NYSE, Nasdaq, and other markets, less than 70 companies hold the title. Each company has demonstrated the capacity to weather economic storms, global technological upheaval, and mercurial consumer requirements, and each has earned their top spots in their respective sectors.
However, for retail investors who want to invest in Dividend Kings, buying 70+ stocks for their income portfolio is often out of the question. You can cut down the list by yields, sector quality, maturity, global footprint, etc, to get your perfect set of Dividend Kings.
Now, though, I prefer a slightly different criteria: Dividend Kings, which are trading at steep discounts.
So, let’s take a look at the top discounted Dividend Kings today.
How I Came Up With The Following Stocks
First, I started with Barchart’s Stock Screener feature. From there, I selected the following filters to get my list of Dividend Kings:
- 14-Day Relative Strength Index: Less than 30%. RSI, or the relative strength index, is a popular technical analysis tool that indicates whether a stock is oversold or overbought based on its recent price movements across a 100-point scale. Seventy and above indicates overbought, and 30 below means oversold. Since I’m aiming for cheap Dividend Kings, I’ll set this to 30 and below.
- Current Analyst Rating: 3.5 to 5 (Moderate Buy to Strong Buy)
- Annual Dividend Yield: Left blank.
- Watchlist: Kings. This filter allows me to access my pre-set watchlists and screen them at any time.
Using this set of filters, I got three results, which I arranged from highest to lowest dividend yield.
So, let’s start with number one:
Coca-Cola Company (KO)
The Coca-Cola Company is an American multinational corporation best known for its flagship product, Coca-Cola, and its vast beverage portfolio, which includes not only sodas but also water, sports drinks, teas, and coffee brands. Some well-known brands under its umbrella are Sprite, Fanta, Dasani, Minute Maid, and Powerade.
The Coca-Cola Company also enjoys a reputation for being a reliable dividend stock. Indeed, it enjoys being a Dividend Aristocrat, Dividend King, and Dividend Zombie (100+ years of consistent dividend payments).
KO stock’s current RSI is 25.34%—the lowest on this list—making it an attractive buy for those looking for cheap Dividend Kings. Based on its $1.94 annual dividend, it also has the highest yield on this list at 2.98%. If that’s not enough incentive to buy, analysts rate KO stock a strong buy recommendation.
Colgate-Palmolive Company (CL)
Colgate-Palmolive is a consumer and household products company that manufactures and sells oral, personal, home care, and pet nutrition products under the names Colgate, Emex, and Meridol. The company also produces soaps, deodorants, dishwashing liquids, and household cleaning products under various brands, including Palmolive, Speed Stick, Softsoap, and Ajax.
Colgate-Palmolive pays $2.00 per share in dividends (annually), which reflects a 2.14% yield on CL stock’s last trading price. Its current 14-RSI is 26.80%, though admittedly, Colgate-Palmolive has the lowest analyst score on this list at 3.96 (moderate buy). Even with this rating, Colgate-Palmolive is a reliable income investment; it has paid dividends since 1895 and has increased them for 60 consecutive years.
Tennant Company (TNC)
Tennant Company manufactures cleaning equipment and solutions for commercial and industrial floor care products. Its product line includes a wide range of cleaning machines, such as floor scrubbers, sweepers, carpet extractors, and burnishers, as well as cleaning chemicals and coatings designed to enhance floor durability and appearance. Tennant is an undeniable leader in the field of cleaning and is a trusted brand by businesses and consumers.
TNC stock is hovering just above its current 52-week low at $81.81, and its 14-day RSI is currently at 26.26%. Though it’s still too early to tell with 100% certainty, buyers appear to be nibbling on TNC stock, which could potentially lead to a recovery over the short term.
Meanwhile, Tennant Company pays a $1.12 annual dividend, which translates to a 1.34% yield based on the stock’s latest trading price.
Final Thoughts
These cheap dividend kings offer reliable income and potential capital appreciation in one swoop—like having your cake and eating it, too. However, markets change, and things can turn around at the snap of a finger. So, consider these three additions to your portfolio, BUT don’t neglect to watch your portfolio and the ever-needed due diligence. Remember, it’s your money on the line.
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.
