In this article, we will be taking a look at 10 cheap dividend kings with over 2% yield. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Cheap Dividend Kings with Over 2% Yield.
Dividends have long been among the most attractive incentives some stocks may have to offer, and thus dividend stocks continue to remain popular among income investors and others looking to establish passive income streams and set up a hedge against inflation in their investment portfolios. Yet while all dividend stocks may seem highly attractive to these investors, it is important to take into account certain factors before deciding where to invest. One of these factors is evidently the number of years of consistent dividend increases of the stocks concerned, as this indicates a company’s ability to sustain itself and its dividend payouts. For this reason, some dividend stocks with impressive records of consistent dividend increases, like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), tend to win out over others in terms of popularity. These stocks fall under a range of categories, like the category of the dividend kings.
What is a Dividend King?
Stocks referred to as dividend kings are typically those that are publicly traded and have managed to increase their dividend yields every year for at least 50 years. Such companies are typically considered to be among the more reliable dividend payers, keeping investors engaged with regular dividend payouts.
There are many reasons why such stocks are highly popular to date. For instance, dividends have historically contributed a significant amount to the stock market’s total return, as mentioned by Ibbotson Associates, where dividends were estimated to have brought in about 40% of the 10.3% average annual total return of the S&P 500 between 1926 and 2020. Morningstar has also estimated that, for instance, in the 1940s, dividends contributed about 67% to the S&P 500’s total return and in the 1970s, they contributed about 73%. And finally, while dividends have not always contributed the most, for instance in the 2010s, when dividend contribution to the S&P 500’s total return was only about 17%, they have still managed to remain a vital aspect of the market’s performance in general. Hence, dividend stocks remain among the more sought after stocks on the market.
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Without further ado, let’s take a look at the 10 cheap dividend kings with over 2% yield.
Our Methodology
The stocks added to our list below are all priced under $80 and have dividend yields of 2% or above. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield, the number of years of consistent dividend increases, share price, and the number of hedge fund holding a stake in it, ranking them from the lowest to the highest dividend yield. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Cheap Dividend Kings with Over 2% Yield
10. SJW Group (NYSE: SJW)
Number of Hedge Fund Holders: 7
Dividend Yield: 2%
Number of Years of Consistent Dividend Increases: 55
Share Price as of August 24: $68.93
SJW Group (NYSE: SJW) is a provider of water utility services to consumers in the US. The company produces, purchases, stores, purifies, distributes, and sells water and wastewater services. It ranks 10th on our list of cheap dividend kings with over 2% yield.
Eric Beaumont, an analyst at Barclays, began covering shares of SJW Group (NYSE: SJW) this July with an Equal Weight rating and a $70 price target.
In the second quarter of 2021, SJW Group (NYSE: SJW) had an EPS of $0.69, beating estimates by $0.06. The company’s revenue was $152.24 million, up 3.42% year over year and beating the previous quarter’s revenue of $114.78 million. SJW Group (NYSE: SJW) has gained 5.03% in the past 6 months and 0.01% year to date.
By the end of the second quarter of 2021, 7 hedge funds out of the 873 tracked by Insider Monkey held stakes in SJW Group (NYSE: SJW) worth roughly $60 million. This is compared to 9 hedge funds in the previous quarter with a total stake value of approximately $73 million.
Like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), SJW Group (NYSE: SJW) is a good stock to invest in.
9. Hormel Foods Corporation (NYSE: HRL)
Number of Hedge Fund Holders: 24
Dividend Yield: 2.13%
Number of Years of Consistent Dividend Increases: 55
Share Price as of August 24: $46
Hormel Foods Corporation (NYSE: HRL), a consumer staples and packaged foods and meats company, is next on our list of cheap dividend kings with over 2% yield. The company provides meat and food products to retail, food service, deli, and commercial customers in the US and globally, and ranks 9th on our list.
In the fiscal second quarter of 2021, Hormel Foods Corporation (NYSE: HRL) had an EPS of $0.42, beating estimates by $0.01. The company’s revenue was $2.61 billion, up 7.6% year over year and beating estimates by $199.11 million.
By the end of the second quarter of 2021, 24 hedge funds out of the 873 tracked by Insider Monkey held stakes in Hormel Foods Corporation (NYSE: HRL) worth roughly $562 million. This is compared to 26 hedge funds in the previous quarter with a total stake value of approximately $483 million.
Like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), Hormel Foods Corporation (NYSE: HRL) is a good stock to invest in.
Nelson Capital Management, an investment management firm, mentioned Hormel Foods Corporation (NYSE: HRL) in its fourth-quarter 2020 investor letter. Here’s what they said:
“We had a quiet fourth quarter, making just one swap within our consumer staples sector. We sold our position in Hormel (tkr: HRL). Hormel has seen tailwinds from the pandemic, as the maker of Spam and Skippy peanut butter has experienced higher demand from nervous consumers seeking out products with longer shelf lives. The stock had risen 18% year-to-date and its price-to-earnings (P/E) ratio had expanded from 25x to over 31x. Hormel pays a 2% dividend which is lower than many of its peers in the consumer staples sector. Furthermore, Hormel’s Jennie-O Turkey brand has experienced disruption in recent years as raw material over- or undersupply has caused large swings in revenue that lead to unpredictability. We decided to seek out better opportunities within the sector, particularly looking for a more attractively valued company that pays a higher dividend and sells everyday products that people will buy even in times of economic distress.”
8. Colgate-Palmolive Company (NYSE: CL)
Number of Hedge Fund Holders: 58
Dividend Yield: 2.39%
Number of Years of Consistent Dividend Increases: 58
Share Price as of August 24: $78.32
Colgate-Palmolive Company (NYSE: CL), another consumer staples company, works to sell consumer products globally under its brands such as Colgate, Palmolive, and Ajax. The company ranks 8th on our list of cheap dividend kings with over 2% yield. It operates through its Oral, Personal and Home Care, and Pet Nutrition segments.
Morgan Stanley’s Dara Mohsenian reiterated the firm’s Equal Weight rating on shares of Colgate-Palmolive Company (NYSE: CL) this August, alongside a $90 price target.
In the second quarter of 2021, Colgate-Palmolive Company (NYSE: CL) had an EPS of $0.80, in line with estimates. The company’s revenue was $4.26 billion, up 9.31% year over year and beating estimates by $15.21 million. Colgate-Palmolive Company (NYSE: CL) has gained 1.85% in the past 6 months.
By the end of the second quarter of 2021, 58 hedge funds out of the 873 tracked by Insider Monkey held stakes in Colgate-Palmolive Company (NYSE: CL) worth roughly $2.4 billion. This is compared to 48 hedge funds in the previous quarter with a total stake value of approximately $2.3 billion.
Like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), Colgate-Palmolive Company (NYSE: CL) is a good stock to invest in.
First Eagle Investment Management, an investment management firm, mentioned Colgate-Palmolive Company (NYSE: CL) in its first-quarter 2021 investor letter. Here’s what they said:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
7. Sysco Corporation (NYSE: SYY)
Number of Hedge Fund Holders: 40
Dividend Yield: 2.42%
Number of Years of Consistent Dividend Increases: 51
Share Price as of August 24: $77.30
Sysco Corporation (NYSE: SYY), yet another consumer staples company on our list of cheap dividend kings with over 2% yield, works to market and distribute food and related products to consumers in the US, Canada, the UK, France, and internationally. It ranks 7th on our list and operates through its U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments.
Mark Carden, an analyst at UBS, began covering shares of Sysco Corporation (NYSE: SYY) this July with a Buy rating and an $89 price target.
In the fiscal fourth quarter of 2021, Sysco Corporation (NYSE: SYY) had an EPS of $0.71, beating estimates by $0.11. The company’s revenue was $16.14 billion, up 82% year over year and beating estimates by $1.49 billion. Sysco Corporation (NYSE: SYY) has gained 7.9% year to date and 31.1% in the past year.
By the end of the second quarter of 2021, 40 hedge funds out of the 873 tracked by Insider Monkey held stakes in Sysco Corporation (NYSE: SYY) worth roughly $2.6 billion. This is compared to 42 hedge funds in the previous quarter with a total stake value of approximately $2.7 billion.
Like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), Sysco Corporation (NYSE: SYY) is a good stock to invest in.
6. The Coca-Cola Company (NYSE: KO)
Number of Hedge Fund Holders: 62
Dividend Yield: 2.98%
Number of Years of Consistent Dividend Increases: 59
Share Price as of August 24: $56.51
The Coca-Cola Company (NYSE: KO) is a consumer staples company operating in the beverages and soft drinks industry to offer non-alcoholic drinks to consumers across the globe. It ranks 6th on our list of cheap dividend kings with over 2% yield.
Bill Chappell, an analyst at Truist, raised his price target on shares of The Coca-Cola Company (NYSE: KO) this July from $60 to $65 while reiterating a Buy rating on the stock.
In the second quarter of 2021, The Coca-Cola Company (NYSE: KO) had an EPS of $0.68, beating estimates by $0.12. The company’s revenue was $10.13 billion, up 41.61% year over year and beating estimates by $823.11 million. The Coca-Cola Company (NYSE: KO) has gained 10.77% in the past 6 months and 6.46% year to date.
By the end of the second quarter of 2021, 62 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Coca-Cola Company (NYSE: KO) worth roughly $25 billion. This is compared to 61 hedge funds in the previous quarter with a total stake value of approximately $25 billion.
Like Altria Group, Inc. (NYSE: MO), The Procter & Gamble Company (NYSE: PG), Lowe’s Companies, Inc. (NYSE: LOW), and Walmart Inc. (NYSE: WMT), The Coca-Cola Company (NYSE: KO) is a good stock to invest in.
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Disclosure: None. 10 Cheap Dividend Kings with Over 2% Yield is originally published on Insider Monkey.
