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TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
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MU   84.88 (-0.34%)
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GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)
QQQ   432.79 (+0.19%)
AAPL   188.32 (-0.58%)
MSFT   414.11 (+0.01%)
META   470.00 (+0.09%)
GOOGL   145.91 (+0.25%)
AMZN   169.84 (-0.40%)
TSLA   189.56 (+1.06%)
NVDA   696.41 (-0.65%)
NIO   5.82 (-0.68%)
AMD   169.35 (-0.93%)
BABA   70.74 (-3.94%)
T   16.82 (-2.94%)
F   12.83 (+0.23%)
MU   84.88 (-0.34%)
CGC   4.11 (-4.86%)
GE   139.07 (+0.41%)
DIS   110.54 (+11.50%)
AMC   4.09 (+3.81%)
PFE   27.56 (+0.00%)
PYPL   56.13 (-11.24%)
XOM   103.97 (+1.71%)

3 high-yielding Dividend Kings: Buy, sell or hold?

Key Points

  • Procter & Gamble has pricing power, and analysts are raising their targets. 
  • Archer-Daniels-Midland falls into deep-value territory due to scandal; analysts are holding on tight. 
  • Colgate-Palmolive is another with pricing power and the support of analysts. 
  • 5 stocks we like better than Procter & Gamble

Dividend Kings are attractive for income investors because of the reliable payments and insulation from market downturns. 

These buy-and-hold names are also tightly held, significantly affecting their volatility and resistance to knee-jerk selling. Many, such as Procter & Gamble Co. NYSE: PGArcher-Daniels-Midland Co. NYSE: ADM and Colgate-Palmolive Co. NYSE: CL, also come with higher-than-average yields, adding leverage to the total returns, which have been great over time. 

The average three-year beta for these stocks is 0.6x the S&P 500; the average yield is 2.75%, but are they a buy, sell or hold? 

Investors buy into Procter & Gamble's leverage 

Among the many takeaways from Procter & Gamble's earnings report is pricing power. The company made significant pricing increases over the last year, which supported growth, and there was only a mild amount of elasticity. 

The result was mixed, with the top line up year-over-year but weaker than expected, offset by margin strength, better-than-expected earnings and a positive outlook for the remainder of the fiscal and calendar year. Analysts are raising their targets and expect growth to accelerate in the next fiscal year. 

The Procter & Gamble Company is among the highest quality consumer staples and trades at a high valuation because of it. However, the 24x it trades for is below average for the stock and further offset by dividend quality. The stock yields about 2.45%, is trading at recent levels, and should grow again in 2024. The pace of distribution increases isn't robust, but the 6% CAGR is at the high end of the range for this group, and there are repurchases to consider. Repurchases projected for this fiscal year increase the effective yield by more than 55%. 

The price action in PG stock fired a trend-following signal following the Q2 release and can move higher. The stock is trading at the low end of the analysts' target range with significantly bullish activity post-release. MarketBeat.com tracks six revisions with higher price targets and an implied 7.5% advance at the midpoint. A move to the analysts' consensus would put this market at an all-time high. 

Procter & Gamble chart

Archer-Daniels-Midland drops to deep-value territory: Analysts hold

A scandal rocked commodity giant Archer-Daniels-Midland, which sent its shares into deep-value territory. The SEC is probing issues related to the nutrition unit that may impact results this quarter. The company also issued weak guidance, adding to the market decline. The company put its CFO on leave pending the probe's conclusion. 


Archer-Daniels-Midland is a deep value trading at 10x its earnings forecast, putting it at the low range for consumer staples-oriented companies, Dividend Kings and high-yielding stocks. Aside from the threat of misstated financials, the company's cash and cash flow are solid and support a healthy dividend. 

Execs issued the 52nd annual increase as expected, adding 11% to its already robust 3.5% per-share yield. 

Analysts are lowering their sentiment ratings, but two things are clear: The analyst community still holds on to this stock and sees it trading much higher than it is today. The move lower has this market at the low end of the range, a potential floor for the action, with a 35% upside forecast at the consensus. 

Archer-Daniels-Midland chart

Colgate-Palmolive is another product company with pricing power

Colgate-Palmolive reported an even better quarter than The Procter & Gamble Company, with top- and bottom-line growth ahead of its competitor and above consensus. A 7% increase in average pricing compounded by flat volume drove results. Flat volume is noteworthy because consumer staples businesses across the spectrum are struggling with volume growth and making up the difference with prices. 

Colgate-Palmolive stock is also highly valued due to its dividend quality. This King has increased for 60 years and will make another soon. Yield and health are comparable to The Procter & Gamble Company at 2.35% and 60%, respectively. Analysts rate this stock a "moderate buy" but see it trading near fair value. However, the sentiment and price target are rising, bringing the high end of the range into play. A move to the analysts' highest target would put this market at a new all-time high.

Colgate-Palmolive chart

→ Critical asset just had biggest fall on record (From Stansberry Research) (Ad)

Should you invest $1,000 in Procter & Gamble right now?

Before you consider Procter & Gamble, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Procter & Gamble wasn't on the list.

While Procter & Gamble currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Archer-Daniels-Midland (ADM)
4.8267 of 5 stars
$52.70-0.3%3.42%7.34Reduce$67.08
Colgate-Palmolive (CL)
4.7759 of 5 stars
$84.26+0.5%2.28%30.31Moderate Buy$86.93
Procter & Gamble (PG)
4.6357 of 5 stars
$158.64-0.3%2.37%26.57Moderate Buy$167.06
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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