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GE   63.89 (-3.02%)
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QQQ   283.55 (+0.00%)
AAPL   139.77 (+1.70%)
MSFT   261.08 (+1.79%)
META   162.90 (+1.38%)
GOOGL   2,238.53 (-0.07%)
AMZN   109.30 (+1.77%)
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NVDA   154.56 (-3.29%)
NIO   21.40 (-4.29%)
BABA   115.28 (-1.27%)
AMD   77.32 (-4.28%)
MU   55.93 (-3.34%)
CGC   3.50 (-3.05%)
T   20.70 (+0.44%)
GE   63.89 (-3.02%)
F   11.49 (-2.71%)
DIS   94.80 (-1.17%)
AMC   13.24 (-1.05%)
PFE   51.02 (+0.71%)
PYPL   71.32 (-0.70%)
NFLX   176.62 (-1.66%)

Ride Out The Recession With These Dividend Kings 

Saturday, June 18, 2022 | Thomas Hughes
Ride Out The Recession With These Dividend Kings 

Dividend Kings Are Proven Payers For Tough Times 

Recession or not, Dividend Kings have a proven track record of success that includes over 50 years of consecutive distribution increases. This tells us management has the foresight to run their companies profitably in both good times and bad. The stocks on our list today are not only Dividend Kings but also Consumer Staples, the sector we most want to be in during an economic downturn. While we can’t predict with 100% certainty what will happen with the economy, inflation, and interest rates we can predict that these companies will continue to pay their dividends and even raise them while the rest of the stock market is floundering.

Colgate-Palmolive Yields 2.55%

Colgate-Palmolive (NYSE: CL) is a Dividend King with 60 years of consecutive dividend increases under its belt. As of the last increase, the stock is paying about 2.55% in yield while trading about 24X its earnings. This is a bit of a high valuation but Colgate-Palmolive, like all the Dividend Kings, is a very high-quality stock and desirable for many reasons. Analyst Christopher Graja at Argus just called the stock out as “a high-quality stock for the times” when he reiterated a Buy rating and $90 price target. In his view, the company’s pricing power will be enhanced by product innovation and cost-control efforts that should more than offset inflation. His target compares well to Marketbeat.com's consensus of $85.50 which implies about 15% of upside for the stock. 


Shares of Colgate-Palmolive are trading at the lowest levels since the pandemic began and offering an attractive entry point. Price action appears to be confirming support at a slightly higher level as well, and the indicators are consistent with support. Assuming the market is able to hold the stock at this level, we would expect to see it move sideways and up within the long-term range. The high end of the range is near the $85.50 consensus target. 

Ride Out The Recession With These Dividend Kings 

Hormel Foods, Lower Yield But Stronger Growth 

Hormel Foods (NYSE: HRL) is a Dividend King with 56 years of consecutive distribution increases to its credit. This stock yields a slightly lower 2.35% compared to Colgate-Palmolive but the distribution is growing at a faster pace. Hormel has been increasing its payout at a near 10% CAGR which is more than triple the pace of Colgate. In addition, Hormel carries a lower payout ratio and has a better earnings growth outlook to fuel the action. Hormel recently cut its growth forecast but to a level more in-line with the Marketbeat.com consensus so it’s not a worry for us. The result, however, was a 15% decline in share prices that is opening today’s opportunity. The decline in share prices has the price action moving back toward the long-term trendline that has been dominating price action since 2008. It is our view that a touch of the trend line will spark another round of buying. 

Ride Out The Recession With These Dividend Kings 

Proctor & Gamble, The High-Yield Value Among Dividend Kings 

Proctor & Gamble (NYSE: PG) is no bargain trading at 23X its earnings but it is slightly cheaper than Hormel and Colgate while paying the highest dividend of the lot. Proctor & Gamble is yielding about 2.75% at the current price point and has been increasing for the last 65 years. The payout ratio is also the highest at 60% but even at this level, we view the payout as incredibly safe. Based on the cash flow, balance sheet, and earnings outlook we see no reason why the company cant sustain a few more increases at the 5% pace it has held over the last few years. 

Ride Out The Recession With These Dividend Kings 

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Procter & Gamble (PG)
2.9463 of 5 stars
$142.03+0.8%2.57%24.79Moderate Buy$165.64
Hormel Foods (HRL)
2.4165 of 5 stars
$47.75+1.4%2.18%27.29Hold$47.83
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Procter & Gamble right now?

Before you consider Procter & Gamble, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Procter & Gamble wasn't on the list.

While Procter & Gamble currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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