3 Buy-Rated Dividend Kings to Create Generational Wealth
Building generational wealth is the ultimate goal of investing. It is a feat that not everyone can easily accomplish, requiring patience and consistent wealth building. You want to secure your retirement and pass on the legacy you’ve built to future generations of your family. That’s why it is it is probably a great idea to jump on these dividend kings.
Luckily, dividend growth investors have access to investment vehicles that help secure that future. For example, dividend kings have a history of over 50 years of consecutive dividend growth that provides investors with a consistently growing income and capital growth to help build their legacy. While the consistent dividend income is an excellent selling point, investors should still do their due diligence. They should focus on dividend stocks with long-term growth potential. Or, they can take the guesswork out of it all and look for ones analysts recommend as “Strong Buys,” which we will do today.
Tennant Company (TNC)
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A leader in the cleaning industry, Tennant Company (NYSE:TNC) specializes in floor maintenance and cleaning technology. It’s one of the top go-to brands in various sectors like universities, hospitals, clinics, and more. The company markets its offerings under brands like Nobles, Tennant, Alfa Uma Empresa Tennant, and others. Tennant recently acquired M&F Management and Financing GmbH (“M&F”) to accelerate its growth in Central Europe. In addition, TNC announced an exclusive tech agreement with Brain Corp to accelerate robotic cleaning innovations and adopt automated cleaning in the cleaning industry.
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On top of all this positive news, TNC has also released solid financial results. Net income achieved a remarkable 65.2% YoY growth for 2023. Net sales also grew 13.9% over the same period. It’s worth noting that TNC has also consistently been seeing positive results for the last six quarters.
This spells a brighter future for TNQ, making it well-recommended by Wall Street analysts. The company currently pays an annual dividend of $1.12, representing an approximate 1.03% yield. While the yield may seem lower than other Dividend Kings, its growth potential balances this out if you are looking for a stock for the long term. Tennant Company has raised its dividend for the past 52 consecutive years and has paid interrupted dividends since 1944.
The Gorman-Rupp Company (GRC)
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The Gorman-Rupp Company (NYSE:GRC) sells pumps and pump systems for various applications like water, wastewater, sewage, and heating. While all of these might sound boring, what matters is its ability to provide its investors with stable growth and income to help build their generational wealth. The company has consistently rewarded its investors with an increasing dividend payout for the last 51 years. One of the reasons why analysts and investors love the stock is that It offers an annual dividend yield of approximately 1.98% based on its $0.72 dividend per share (annual) at a 51.51% payout ratio.
If we look at its financials, GRC has also demonstrated a profitable year, with fourth-quarter net sales increasing by 10% YoY to $160.6 million and full-year net sales growing by 26.6% YoY to $659.5 million. Net income for the entire year came in at $35.0 million, or $1.34 per share, nearly triple from the previous year.
GRC also reduced total debt by $58.2 million during 2023 and increased its cash reserves by $23.7 million, ensuring a healthy balance sheet. Its strong market presence puts it in a solid position to offer investors retirement income and stable growth that can weather market downturns. Hence, GRC is one of the top Dividend Kings investors should check out.
Target Corporation (TGT)
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Target Corporation’s (NYSE:TGT) “Expect more, pay less” slogan is an excellent summary of its business model. The company is a household name with various product categories ranging from electronics, food, beverages, household items, etc. Target’s low prices have been the everyday consumer’s go-to place for great deals. The company recently announced its collaboration with Diane Von Furstenberg to offer customers an affordable spring collection. In addition, Target recently introduced brand-new and deal-worthy everyday basics that will surely be a hit with thrift shoppers. TGT currently offers an annual dividend of $4.40 per share, representing an approximate dividend yield of 2.54%, with a dividend payout of 55.12%.
TGT reported a strong year alongside improvements in sales and traffic trends. 2023’s GAAP and adjusted EPS came in at $8.94, almost 50% higher than last year’s figures. Cash from operations doubled from $4.0 billion to $8.6 billion. Despite an anticipated decline in comparable sales for the first quarter of 2024, Target’s forward-looking guidance expects GAAP EPS and Adjusted EPS in the $8.60 to $9.60 range.
Wall Street analysts agree and rate the company as a strong buy. With analysts’ firm conviction and a 52-year consecutive dividend increase, it’s a no-brainer that TGT is worth adding to your Dividend Kings portfolio for building generational wealth.
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.
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