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3 Dividend Kings for Income Investors to Count On

·5 min read

It can be tricky to choose the best dividend kings for income investors. These companies have proven their ability to survive and thrive through good times and bad, making them an excellent choice for income investors looking for safety and stability.

In addition, dividend kings for investors tend to be large, well-established companies with strong competitive advantages, reducing the risk of investing in them.

While dividend kings may not offer the rapid growth potential of other stocks, they offer a level of safety and stability ideal for many investors.

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With over half a century of consistent dividend growth, these stocks have proven resilient in even the most challenging economic conditions. If you’re looking for income-producing investments that can offer stability and peace of mind, dividend kings should be at the top of your list.

ADP

Automatic Data Processing

$238.35

KMB

Kimberly-Clark

$126.02

GPC

Genuine Parts

$157.39

Automatic Data Processing (ADP)

In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock.
In this photo illustration the stock market information of Automatic Data Processing, Inc. displays on a smartphone with the logo of Automatic Data Processing, Inc. ADP stock.

Source: IgorGolovniov / Shutterstock

Automatic Data Processing (NASDAQ:ADP) is a company that provides human resource management services. It is an outsourcing partner for companies that need to manage their data-driven processes. The company has a strong long-term investment profile with reliable cash flow.

The ADP business model differs from other traditional companies because it has recurring revenue. It charges clients monthly fees, generating stable cash flow and supporting an annual dividend payment every quarter.

It is a stable business that continuously generates money. In fiscal 2022, revenues were $16.5 billion (10% up from the previous year), while profits were $3 billion (15% up from 2021). ADP forecasts fiscal 2023 revenue growth from 7% to 9% and adjusted diluted EPS growth of 13% to 16%.

ADP is a company that many people in the financial industry don’t know about. That’s because it might seem boring for investors accustomed to growth stocks.

ADP adds more tools to its platform daily for payroll processing or human resource management, which makes it seem less glamorous than other companies with similar offerings but higher growth potential.

However, the company has been around for a long time and is run very well. The company pays a dividend yield of 1.74%, and its shares are trading at a reasonable valuation. Consequently, Automatic Data Processing is an attractive investment option for income investors seeking safe, reliable income streams.

Kimberly Clark (KMB)

Kimberly Clark (KMB) sign, positioned outside the world headquarters’ main entrance.
Kimberly Clark (KMB) sign, positioned outside the world headquarters’ main entrance.

Source: Trong Nguyen / Shutterstock.com

Kimberly-Clark (NYSE:KMB) produces a wide range of branded items, including paper towels, tissues, toilet paper, and diapers. It is also a major health care sector, supplying products to hospitals and other medical facilities. Kimberly-Clark holds Kleenex, Scott, Huggies, Pull-Ups, Kotex and Cottonelle on its list of brands.

Sales of the company’s products surged during the pandemic. Now that the pandemic is subsiding, investors fear that Kimberly-Clark might slow down, but recent quarters reveal accelerating sales growth and robust cash flow.

In the second quarter, the personal care corporation reported sales of $5.1 billion, a 7% year-on-year jump. Second-quarter organic sales also surpassed forecasts with a 9% growth rate.

Kimberly-Clark maintained its sales volumes despite price hikes. Kimberly-Clark Corp. now expects organic sales to rise as much as 7%, compared with 6%. This is primarily due to the company’s price increases earlier this year. However, Kimberly-Clark expects inflation to affect pricing for the rest of the year.

The company has been growing steadily for years now. But investors worry that it might never catch up with Procter & Gamble’s (NYSE:PG) lead in market value. However, Kimberly Clark also offers value compared to the market’s biggest players, which is why it’s one of the best Dividend Kings for income investors.

Genuine Parts (GPC)

5 Great Blue-Chip Stocks to Buy
5 Great Blue-Chip Stocks to Buy

Source: Shutterstock

Genuine Parts (NYSE:GPC) has been through it all. It was founded in 1928, during the Great Depression era. It survived two World Wars and multiple recessions thanks largely to its loyal customer base.

Light vehicle sales have been on a downward trend this year. Price increases are the most significant reason for this. In July, for example, the average U.S. car price rose to $48,182 – a new record high.

The used car market is an economic indicator that can be called upon to assess the health of our economy and consumer spending. However, Genuine Parts can expect a consistent flow into maintenance needs, whether in the case of used cars or new ones.

The auto parts leader reported record second quarter results with $5.6 billion in sales and almost doubling earnings. Given its stellar performance, it hiked top- and bottom-line guidance for fiscal 2022.

For the income investor, Genuine Parts declared a payout of $0.895, a 9.8% jump over the prior dividend. It translates to a juicy dividend yield of 2.28%.

The dividend payout ratio stands at 45.4%, which means there is room to grow the dividend in keeping with the company’s reputation. Considering all these elements, this is one of the best Dividend Kings for income investors.

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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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