What’s not to love about Dividend Kings? They’re great companies with proven track records and over 50 years of increasing dividend payouts. That says a lot about their operations and ability to weather the ever-changing business landscape.
However, not all Dividend Kings are equal. We recently saw some high-profile companies like 3M drop off the list. However, I must admit that 3M's company’s reason for cutting dividends (spinning off its healthcare segment into a different company) is reasonable.
I can’t say the same for Leggett & Platt, which previously held the #1 Dividend King rank in yields. Unfortunately, it recently cut dividends by 89%, leading to a massive sell-off that dropped its stock price to its lowest in almost 30 years.
The funny thing is that analysts saw LEG’s predicament from a mile away, lending a measure of credence to their consensus analysis. And that leads us neatly to our topic today: the highest-rated Dividend Kings based on analyst scores.
How I Selected These Stocks
I used Barchart’s Watchlist feature to get to my pre-prepared Dividend Kings list. Then, I clicked on SCREEN to filter my selection.
Then, I used the CURRENT ANALYST RATING filter to get today's highest-rated Dividend Kings. I wanted to get the best, so I filtered for companies with an average rating of 4.5 and above. That means strong buy recommendations only—the highest recommendation a stock can get.
I used the NUMBER OF ANALYSTS filter to improve the selection, which tells me how many analyst firms are covering the stock. Again, we’re looking for the cream of the crop here, so I used the highest category (16 analysts and above).
I like using the NUMBER OF ANALYSTS filter because it gives me more confidence in my picks. There are instances where investors thought they were purchasing a perfect 5 company, but then it turns out that that perfect score came from a single firm—not exactly a statistically relevant score.
After that, I included the ANNUAL DIVIDEND YIELD (%) filter but left it blank so that it would appear in the search results.
After setting my filters, I clicked SEE RESULTS to get the list of today's highest-rated Dividend Kings. The screen resulted in 4 companies.
Typically, I like to report the top three, but I think all four companies deserve coverage in this case. So, let’s look at the highest-rated Dividend Kings in the market today, arranged from lowest to highest yields.
S&P Global (SPGI)
First is S&P Global, the highest-rated company based on an average score of 4.84 from 19 analysts. However, it also has the lowest yield, with a forward annual rate of $3.64, which translates to 0.8% annually.
Still, SPGI stock has a lot going for it. It is a trusted company with a significant presence in the financial services industry. It has also paid dividends since 1937, increasing the payouts for at least the last 51 years.
Parker-Hannifin (PH)
Parker-Hannifin, better known as Parker, is a manufacturing company that provides highly engineered motion and control technologies. The company offers its brand and products to a wide range of industries that require precision control. These include transportation, industrial manufacturing, oil and gas, healthcare, semiconductor production, power generation, and more.
So far, Parker is having a great year. Q2’24 financials reported a 3% year-over-year growth in sales, while adjusted EPS ended at $6.15 and grew 29% in the same period.
PH stock pays a $1.48 quarterly dividend, which translates to $5.92 annually or a 1.12% yield. The company has also increased dividends for 67 consecutive years. With a dividend payout ratio of only 23.61% and an analyst rating of 4.63 based on 16 firms, I think it’s fair to say that Parker is one of the safest Dividend Kings to invest in.
Walmart (WMT)
There’s a lot to love about Walmart as a company. As of 2024, it's the biggest retailer in the world, beating Amazon and German retailer Schwarz Group for the title. The company’s FY’24 results also reported quite a few notable numbers.
The retail giant saw a 6% increase in revenue, another 6.1% increase in net sales, and an impressive 32% increase in operating income. For its size, these are impressive numbers.
As for dividends, the company recently raised its payout by 9% to 83 cents per share after the 2024 stock split. This increase marks its 51st consecutive year and translates to a 1.3% yield.
“Dividends continue to be a part of our diversified capital returns approach. We're proud to be increasing our annual dividend for the 51st consecutive year,” says John David Rainey, CFO and vice president of Walmart.
On top of this good news, 30 analysts rate WMT stock an average score of 4.53.
Emerson Electric Company (EMR)
Topping our list today is Emerson Electric, a regular in my top Dividend Kings lists. Emerson Electric develops and sells engineering, technology, and software solutions worldwide.
For 2024, the company announced a quarterly dividend payout of $0.525. Annually, that’s $2.10, reflecting a 1.9% forward yield.
Meanwhile, the company reported 17% YOY revenue growth for Q2FY’24, exceeding previous estimates of 12.5% to 14.5%. Emerson also reported a 32% increase in operating and free cash flow, laying out optimistic guidance for Q3. However, its full-year revenue guidance has been decreased from 17% to 16% on the high end.
Still, EMR stock has an average score of 4.65 based on 20 analysts, so there’s still something to look forward to.
Final Thoughts
While I highly encourage investors to analyze their stock picks independently, it doesn’t hurt to look at what experts say about them. That’s why I like to look at analyst ratings to see if consensus goes for or against my choices.
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.
