In this article we discuss Top 5 dividend kings of 2021. If you want to take a look at our detailed analysis of the dividend investing strategy, go to 30 Dividend Kings of 2021 (Part I).
25. Parker-Hannifin Corp (NYSE: PH)
Dividend Yield: 1.31%
Ohio-based Parker-Hannifin specializes in motion and control technologies. Its products are used in aerospace, climate control, electromechanical, filtration, fluid and shielding. In fiscal second quarter, Parker posted a non-GAAP EPS of $3.44, above the Street’s estimate by $0.86. Revenue in the quarter declined by about 2.6% to reach $3.41 billion, but it still beat the consensus by $200 million.
Hedge fund sentiment increased for Parker in the third quarter. Insider Monkey’s data shows that 51 elite hedge funds held stakes in the company at the end of the third quarter, up from 39 funds a quarter earlier.
The company has increased its dividend for 64 consecutive fiscal years.
24. Lowe`s Companies Inc (NYSE: LOW)
Dividend Yield: 1.39%
Home improvement company Lowe’s operates about 2,370 home improvement and hardware stores. The company’s products are related to maintenance, repair, remodeling and decorating. It is one of the top 30 dividend kings to buy in 2021. The company has hiked its dividend consistently over the last 57 years.
Bank of America recently gave bullish comments about Lowe’s stock. The bank likes the stock because of its link with key themes like millennials, climate change, building renovation and energy efficiency.
Pershing Square said the following about Lowe’s in their Q2 Letter:
“Earlier this year, Lowe’s began to experience a significant acceleration in demand, as U.S. consumers in lock down began to invest more in their homes, which has contributed to Lowe’s year-to-date stock price increase of 40%. In recent months, Lowe’s sales have reflected unprecedented demand across the home improvement sector. Lowe’s has also benefited from actions taken over the prior year to improve the company’s competitive position, driving additional share gains.
Lowe’s second quarter results reflected extraordinary 35% U.S. comparable sales growth, substantial operating margin expansion, and robust earnings growth. While comparable sales growth has moderated somewhat in recent months, demand patterns continue to be well above historical averages. Although it is difficult to know how much longer the elevated demand environment will persist, we believe the pandemic has provided Lowe’s with a unique opportunity to showcase its improved merchandising, greater in-stock levels, and excellent customer service to a growing base of customers. This should drive greater customer frequency and loyalty, leading to correspondingly higher same-store-sales and profit margins over the long term.
In 2020, beyond adapting the business for surging demand and the associated operational strains imposed by Covid-19, Lowe’s continues to invest behind critical strategic initiatives, including improving omnichannel capabilities. Management completed the re-platforming of its ecommerce platform earlier this year, and will now focus on enhancing online features and functionality, thereby improving the overall user experience. Lowe’s is also accelerating investments in its supply chain initiatives, a critical element of the company’s longer-term business transformation. We believe that Lowe’s continues to make substantial progress toward achieving each of management’s high-priority initiatives, which will aid Lowe’s future competitive position.
In recent quarters, Lowe’s management has begun to acknowledge its medium-term 12% operating margin target as “not the end point,” but rather “a stop along [Lowe’s] journey,” and has further noted that they believe Lowe’s “can do better than that over time.” As Lowe’s revenue productivity and margins begin to approach its best-in-class peer Home Depot, which achieved a greater than 14% profi t margin last year, it will generate significant increases in profit, which, when coupled with the company’s likely soon-to-be-relaunched, large share repurchase program should lead to accelerated future earnings-per share growth.
Despite Lowe’s signifi cant stock price appreciation, it currently trades at approximately 19 times our estimate of Lowe’s next-twelve-month earnings (vs. Home Depot at 25 times), a valuation which does not reflect its potential for significant future profit improvement. As a result, we believe that Lowe’s share price has the potential to appreciate substantially as the company continues to make progress on its business transformation.”
23. PPG Industries, Inc. (NYSE: PPG)
Dividend Yield: 1.54%
Pennsylvania-based PPG Industries is a recent addition in the dividend kings list. The company has consistently increased its dividend for the last 50 years. It is a Fortune 500 company that sells paints, coatings and specialty materials.
Of the 816 hedge funds tracked by Insider Monkey, 36 funds were bullish on PPG Industries at the end of the third quarter.
First Eagle said the following about PPG stock in their Q1 Letter:
“Pittsburgh-based PPG Industries is a global leader in the manufacture and distribution of paints, coatings and specialty materials. PPG has a history of conservative balance sheet management and strong capital allocation and has generated positive free cash flow for more than 40 consecutive years. Early-2020 weakness in PPG’s share price, due primarily to its exposure to cyclical weakness in autos and industrial production, enabled us to add this business to the portfolio at what we considered an attractive price.”
22. Stanley Black & Decker, Inc. (NYSE: SWK)
Dividend Yield: 1.59%
Stanley Black & Decker makes power tools, industrial and household products. The company ranks 220 on the Fortune 500 list. In July 2020, Stanley Black & Decker increased its dividend for the 53rd consecutive year. In the fourth quarter, the company’s revenue jumped by almost 19% to $4.4 billion.
A total of 38 hedge funds tracked by Insider Monkey ended the third quarter with Stanley Black shares in their portfolios, up by 5 funds a quarter earlier.
21. California Water Service Group (NYSE: CWT)
Dividend Yield: 1.64%
California Water Service provides drinking water and wastewater services to about two million people in California, Hawaii, New Mexico and Washington. The company increased its dividend for the 53rd consecutive year in January 2020. As of the end of the third quarter, 14 hedge funds tracked by Insider Monkey held positions in the company. The total worth of these stakes is $83.1 million.
Ian Simm’s Impax Asset Management owns 1.48 million shares of California Water Service at the end of the third quarter.
Click to continue reading and see the 30 Dividend Kings of 2021 (Part II).
You can also go to 30 Dividend Kings of 2021 (Part III)
You can also read 15 Very High Yield Dividend Stocks Worth Checking Out and 12 Most Influencial Chinese Entrepreneurs
