Penny stocks and startups might be great for speculation, but building a retirement portfolio requires more stability. Preparing for the golden years requires a blend of growth, safety and, more importantly, income. While doubling your money in a week is exciting, investing should be anything but.
Dividend growth investors require income and, of course, dividend growth—and Dividend Kings should be at the top of your list. These high-quality dividend stocks have consistently increased their dividend payments for at least the last 50 years. Price action might fluctuate, and past performance may not indicate the future—but these three royals mix consistency and high yields that are excellent for long-term investments. They are also the highest-yielding stocks on the Dividend Kings list today.
3M Company (MMM)
3M logo on top of a corporate building. MMM stock
Source: JPstock / Shutterstock.com
If one were to look up the definition of “jack of all trades,” 3M (NYSE:MMM) would be a prime example. Its wide range of products makes it a very diversified company, perfect for investors looking to add a piece of exposure to different industries and a cushion during times when diversification is more critical. It also has a record of 100-plus years of dividend payouts (making it a Dividend Zombie) and 64 years of consecutive dividend growth.
3M had quite a bumpy 2023, with sales falling flat and several high-profile lawsuits taking a sizable chunk of its bottom line for the entire year. Analysts are also expressing caution regarding the stock, giving it a “Hold” recommendation. Prices have taken the brunt of the bad news, falling significantly since its last quarterly report.
This might seem like a collection of reasons not to buy MMM to some, but to me, it looks like a golden opportunity to scoop up a high-yield Dividend King at bargain prices. The company’s estimated full-year earnings per share (EPS) of $9.35 to $9.75 for 2024 also gives me confidence that it can still provide consistent dividend growth. The litigations are largely out of the way and are already priced in. The potential for recovery and its well-established Dividend King status makes me extremely bullish on 3M.
Today, 3M boasts a 6.5% annual dividend yield and an annual dividend rate of $6.04 per share.
Leggett & Platt (LEG)
A magnifying glass is focused on the logo for Leggett & Platt on the company's website.
Source: Casimiro PT / Shutterstock.com
Known for its ComfortCore innerspring, Leggett & Platt (NYSE:LEG) manufactures various components found in homes, offices and automobiles.
If we’re going purely by annual dividend yields, LEG is one of the top contenders, with $1.84 per share, or 8.93%. However, investors should know that the company’s recent financials paint an uncertain picture of its future as a Dividend King.
For full context, quarterly sales fell 7% year-over-year (YOY) and reached $1.10 billion for the fourth quarter. Meanwhile, full-year sales for 2023 ended at $4.7 billion, representing an 8% decrease from 2022. However, the real kicker is that the company expects its 2024 sales to continue to decline, and adjusted FY24 EPS is expected to come in around $1.05 to $1.35 — well below its projected dividend payouts for the year.
Still, LEG isn’t going down without a fight. In its latest report, the company announced a restructuring plan to optimize profitability while keeping costs down. Besides, there is still a chance that the company can exceed its guidance and maintain its Dividend King status. Prices are down 21% since the last trading day of 2023, potentially giving it more room for recovery. However, I need to stress that LEG is a risky dividend play. So, consider it carefully, or wait for further developments before buying into this embattled Dividend King.
Altria Group (MO)
a pile of cigarettes
Source: Shutterstock
Sin stocks might not be everyone’s cup of tea. Still, those looking for yield might think twice before passing on Altria Group (NYSE:MO). Altria is best known as a holding company that operates in the tobacco industry and is the maker of brands like Marlboro and Philip Morris. The company offers the highest dividend yield in the Dividend Kings list, with an annual dividend rate of $3.92 or a 9.5%. MO has consistently increased its dividends 58 times over the last 54 years.
MO’s full-year 2023 numbers are in. Revenue and revenue net of excise tax saw a 2.4% and 0.9% decrease, respectively. On the other hand, reported diluted EPS saw a 43.3% jump, while adjusted EPS grew 2.3%. One of the company’s key highlights in 2023 is its acquisition of NJOY holdings, which helped MO expand its footprint by increasing its market share in smoke-free products and reporting an increase in its shipment volume and retail share. MO has also announced a $1 billion share repurchase program, further improving shareholder value. So, if you want a steady income from a company with a strong foothold in its market, then MO might be for you.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
