3 Dividend Kings With Income, Stability, and a Possible Catalyst

Key Points

• Coca-Cola, Colgate-Palmolive, and Stanley Black & Decker are Dividend Kings with durable payout records.
• A softer inflation outlook could help investors refocus on total return, not just dividend yield.
• Each stock offers a different mix of income, defensive stability, and recovery potential.

Many market analysts believe the current environment of entrenched inflation and higher-for-longer interest rates will be a headwind on the economy into 2027. That combination has made dividend stocks less attractive in recent years.

But what if the narrative is wrong? On June 14, the outline of a peace deal was announced between the United States and Iran. If—and it’s still a big "if" as of this writing—the agreement goes forward, the Strait of Hormuz will reopen, easing oil prices, which have been a major contributor to the recent spike in inflation.

If inflation drifts lower, the possibility of rate hikes will decline. And, in fact, would rekindle investor hopes for a rate cut later in 2026 or in early 2027.

That combination would allow investors to focus on a stock’s total return potential, which includes the dividend yield plus capital appreciation. One area to focus on is dividend kings that look undervalued.

Coca-Cola Continues to Reward Long-Term Shareholders

Coca-Cola Co. NYSE: KO is up more than 14% in 2026 and showing why it fits perfectly with Warren Buffett’s value investment strategy. In the past five years, KO is up more than 48% and has delivered a total return of over 71%. That includes its dividend, which yields about 2.6% and has increased for 64 consecutive years.

Coca-Cola is always linked to PepsiCo NASDAQ: PEP, and, in better times, Pepsi had the upper hand due to the diversity of its Frito-Lay acquisition. But in an economy in which companies face margin pressure, Coca-Cola is benefiting from its more streamlined business model.

In the current quarter, Coca-Cola could get a marketing bump from its FIFA World Cup sponsorship, which may help offset ongoing pressure from higher commodity prices. That pressure isn’t likely to abate, but the annualized increases should normalize.

Stock charts tell a story, and the KO chart shows a company that has been a buy on any pullback. More importantly, the stock is up significantly since falling to around the low-$40s during the March 2020 market sell-off.

Colgate-Palmolive Delivers Stability and Dividend Growth

The overarching narrative has been that consumer staples stocks have performed poorly. But as history has shown, quality matters. In the last five years, Colgate-Palmolive NYSE: CL is up over 8.5%. It hasn’t outperformed the broader market, but it has offered the defensive stability and dividend income investors expect from a high-quality consumer staples stock.

The near-term setup looks stronger. The stock is up more than 14% in 2026, and the company has demonstrated its ability to manage the impact of higher raw-material and logistics costs. Summer travel demand is expected to remain solid, which will help with sales of the company’s signature personal care products. Investors should also not be so quick to discount Colgate-Palmolive's pet care segment, which includes the Hill’s brand.

As of June 15, CL trades about 5.8% lower than the consensus price target of analysts tracked by MarketBeat of $95.88. The next catalyst for the stock could come from its earnings report expected in late July, which could reset the outlook for the stock in the second half. Either way, investors are getting a dividend that has increased for 63 consecutive years, has a 2.34% yield, and pays out $2.12 per share annually.

Stanley Black & Decker Offers Income and Recovery Potential

Stanley Black & Decker NYSE: SWK is an industrial stock with a consumer story that may be ready to refire. The company’s Q1 2026 earnings report showed strength in the company’s Engineered Fastening and PRO segments. That reflects the increased infrastructure spending that is flowing into the economy.

That's helped push SWK up more than 30% in the last 12 months and over 14% in 2026. Unlike the steadier consumer staples names, Stanley Black & Decker is still a recovery story, with shares well below prior highs. That weakness is also part of the opportunity. The company is a go-to name for the literal picks and shovels that will be needed to build out infrastructure in all its forms.

In the second half, a stronger consumer could be a catalyst worth watching. Stanley Black & Decker is the parent company of the CRAFTSMAN brand. That’s part of the Tools and Outdoor segment, where organic revenue was down 1%, primarily due to lower retail volumes in North America.

But that’s where the opportunity may be. In the meantime, investors are being paid well to wait on SWK. The company’s dividend has increased for 58 consecutive years, yielding 3.88% and paying $3.32 per share annually.