Dividend Kings—firms capable of consistently raising dividends for over 50 consecutive years—are like the timeless oaks of the investment forest. Seeking those blessed with buy endorsements from elite financial establishments not only ignites hopes of burgeoning dividends but also promises capital appreciation. And what could be sweeter than snagging these Dividend Kings at a bargain? With each dividend increase, these stalwarts embody trust, riding the winds of credibility.
Today, we embark on a quest to unearth the top three most affordable Dividend Kings with beckoning buy signals.
Unveiling the Selection Process
Our journey commences with the aid of the Barchart Watchlist tool, where meticulously curated lists tailored to diverse criteria stand ready. Venturing into the realm of Dividend Kings, a mere click unveils the treasure trove of the Stock Screener.
Our filters were stringent yet precise:
- P/E ratio TTM: The stalwart Price-to-Earnings ratio, a lodestar for assessing a stock’s affordability. Our quest veered towards extraordinarily modest to low (0 – 20 P/E), accentuated by juxtaposing the company’s P/E with the sector’s average. Context is king, even among Dividend Kings.
- Current Analyst Ratings: With a benchmark of 4 and above, we sought stocks adorned with moderate to robust buy accolades from the Wall Street congregation.
- Annual Dividend Yield: A subtle yet powerful filter, left blank to orchestrate our list from the most bountiful to the more modest.
Guided by the North Star of Dividend Yield, we unveiled the top triumvirate of the most inexpensive Dividend Kings blessed by analysts.
Exploring Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust reigns supreme on our roster. A doyen among REITs, boasting a legacy spanning over 60 fruitful years. Nestled in enclaves of opulence such as Silicon Valley and New York City, FRT offers investors a passport to the real estate realm via stock ownership—a velvet-rope entry to the real estate gallery. An imminent dividend surge beckons, marking 56 years of consecutive dividend hikes, with forecasts pointing towards another crescendo in Q3’24.
With a P/E ratio of 15.53, a mere shadow of the S&P 500 Real Estate’s lofty 33.43, the allure of FRT casts a magnetic spell on analysts, meriting it a laudable 4.24 rating. Financial edifices stand firm, with FY’23 showcasing a resplendent FFO per share at $6.55, a delicate uptick from yesteryears. FRT entices with a tantalizing $4.36 forward annual dividend rate, translating to a cozy 4.3% yield.
Spotlight on AbbVie (ABBV)
AbbVie, a luminary in the pharmaceutical pantheon, erects a fortress of resilience by crafting a diversified drug portfolio. Skirting the snares of reliance on a solitary blockbuster, AbbVie’s strategic dance with success is epitomized by stalwarts like Humira, a global juggernaut in rheumatoid arthritis treatment. Despite the chinks in its armor post-Humira’s exclusivity tenure, AbbVie roars with double-digit sales growth for flagships Skyrizi and Rinvoq in FY’23, gearing up to offset the revenue slump.
Analysts wield a brush of optimism, affording AbbVie a charismatic 4.09 consensus ranking. A humble P/E ratio of 14.74 juxtaposed against the healthcare precinct’s 33.24 beckons bargain hunters. Marking its territory with an annual dividend rate of $6.20, AbbVie extends an olive branch of a 3.77% yield.
Envisioning Target Corporation (TGT)
Target Corporation, an emporium of bargains and quality, doesns the garb of a Dividend King, flaunting an unbroken lineage of 52 years bedecked with dividend jewels. Celebrated through press releases elucidating the very essence of shareholder commitment, Target is a beacon for dividend growth enthusiasts.
A modest slip in sales in 2023 metamorphosed into a triumphant saga with nearly a 50% leap in GAAP and adjusted EPS. Verdant pastures await, as cash from operations moonlights from $4.0 billion in 2022 to $8.6 billion, a twofold leap. Analysts serenade TGT with a harmonious 4.20 rating, christening it as a prudent buy. A frugal P/E ratio of 17.80 juxtaposed with the sector’s 24.91 ratio positions Target as an alluring prospect. With a forward annual dividend of $4.40, Target extends an embrace yielding 2.74%.
Parting Words
Like a sage whispering from a bygone era, “buy low and sell high” echoes in the halls of investing wisdom. The allure of capturing cheap Dividend Kings is akin to sowing seeds of reliability in your portfolio. However, tread cautiously, for not all glitters cheap is gold. Engage in thorough scrutiny before embarking on any investment odyssey.
