Dividend Kings can offer stability and a steady predictable source of income in volatile markets. These stocks are some of the most sought-after by income-seeking investors.
What are Dividend Kings?
Dividend Kings are companies who have increased their dividend payout for at least 50 consecutive years.
These tend to be mature companies and can offer stability in share price due to investors buying and holding them for years or even decades. Dividend payments and consistent increases in that payout signal that a company is profitable and financially strong.
A Place in any Portfolio
No investment is completely risk-free, but Dividend Kings can offer about as minimal risk as you will find in the stock market. Their stability and commitment to ever-increasing dividends encourage investors to “buy and hold.” This mitigates the share price volatility.
Even if you aren’t focused on income, having a few Kings in your portfolio can help lessen the blow of corrections and bear markets, and by reinvesting your dividends, you can realize higher returns. The complete list of Kings for 2023 can be found here.
Investing solely in Kings can lessen overall returns since these companies prioritize dividend payouts overgrowth. Their share prices are stagnant or slower growing than other younger companies. Many investors saw huge returns in technology stocks in recent years, but are now feeling the pain if they didn’t sell their positions at the top.
The other downside is that despite the payouts being consistent they tend to be lower yielding than other dividend stocks. The tradeoff of having a steady predictable income stream is that you will likely see lower payout percentages than some other stocks.
Dividend Kings can have a place in any portfolio. They add some stability, steady income, and can lessen volatility. Even if you are investing for growth rather than income, you still may want to consider researching a few of these companies.
Writer and Investor. Based in the Pittsburgh, PA area, Brian holds full-time employment as a Warehouse Manager for an electronics firm. Brian enjoys wealth building, investing, gardening and the great outdoors. Brian holds a B.A. in Environmental Studies from the University of Pittsburgh and an MBA from Robert Morris University.