Dividend Kings are an elite group of income stocks that have increased their dividends every year for at least 50 years. They’re highly regarded for their consistent payouts, which improve their total returns in any market conditions. However, Dividend Kings may be especially attractive now as investors look to protect their portfolios against inflation.
As inflationary pressures build, Dividend Kings’ consistent payments can offer a buffer against rising consumer prices. Additionally, their underlying businesses tend to be stable and more resistant to economic downturns. As a result, Dividend Kings offer a unique combination of safety and stability that can be hard to find during periods of high inflation and market turmoil.
The following list contains three Dividend Kings to consider for those looking for a strong business model and steady income. Each of them has a yield that exceeds the S&P 500’s 1.69%.
|Federal Realty Investment Trust
Dividend Kings: Target (TGT)
Target (NYSE:TGT) has been one of the most successful retailers in recent years. It posted strong growth despite the pandemic-induced economic downturn. Its share price is up nearly 200% in the past five years.
However, the bix-box retailer has struggled this year, and its stock is down 28%. Soaring inflation means more of Americans’ budgets are allocated toward housing, gasoline and groceries, causing them to spend less on discretionary items.
Reduced discretionary spending, along with rising fuel costs and supply chain issues, hit Target’s first-quarter profits. Adjusted earnings per share of $2.19 fell short of analyst estimates despite a 3.2% year-over-year increase in revenue to $25.17 billion. However, management reiterated its full-year revenue forecast, calling for growth in the mid-single-digits.
On the company’s earnings call, Target CEO Brian Cornell noted a few bright spots, including toy and luggage sales, in what he called a trend toward experience-based purchases.
The retailer will need to overcome its inventory issues and adapt faster to changes in consumer spending. However, the 23% drop in the stock since the Q1 report was released in mid-May presents an attractive entry point for aggressive investors, especially considering its status as a Dividend King.
Target has increased its dividend for 50 years straight and counting. The current quarterly payout is $1.08 per share for a forward annual yield of 2.59%.
Computer Services (CSVI)
Computer Services (OTCMKTS:CSVI) is a leading provider of technology solutions for the banking sector, including enterprise banking, regulatory compliance software and managed cybersecurity.
In its most recently reported quarter, the company generated record revenue and net income, driven by high contract renewals, as well as new business.
In addition to its industry-leading technology solutions and experienced management team, Computer Services offers an attractive dividend for income-seeking investors. The company has raised its dividend for 51 consecutive years. The most recent dividend hike in July boosted its quarterly payout by 7.4% to 29 cents per share.
This Dividend King is down 29% year to date. On the plus side, it looks like a bargain — with a trailing price-to-earnings ratio of less than 17 — given its long track record of delivering strong financial results. The stock sports a current forward yield of 3.05%.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust (NYSE:FRT) is a real estate investment trust that owns and operates 105 retail-based properties with 25 million square feet of space.
The company’s recently released second-quarter results paint a positive picture for investors. Federal Realty Investment Trust reported funds from operations (FFO) of $1.65 per diluted share, a record high and up 17% from a year ago. Revenue increased 14% year over year to $264 million.
The company also hiked its quarterly distribution to $1.08 per common share. The latest increase means the company has 55 years of consecutive dividend growth, a record in the REIT sector.
Finally, the company increased its 2022 diluted EPS guidance to $2.50 to $2.65 and FFO per diluted share guidance to $6.10 to $6.25.
Federal Realty Investment Trust is a stable company that has been in business for 60 years. The company has a wide range of investments that generate stable cash flows. What’s more, it’s one of the most reliable dividend investments in the market today.
On the publication date, Faizan Farooque 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.