The dividend kings are a select group of dividend stocks made up of companies that have increased their dividends for at least 50 consecutive years. That may be a throw-away statistic. But consider everything that’s happened to the economy in the past 50 years.
Being able to continually issue a dividend speaks to the blue-chip nature of these companies. They deliver rock-solid revenue and earnings with a commitment to returning capital to shareholders.
Naysayers will say those dividend payments come at the expense of growth. And, it’s true that you won’t find an Nvidia (NASDAQ:NVDA) among this group of stocks. But that’s not to say you won’t get share price appreciation and possible market-beating growth.
In 2024, only 54 stocks have earned the distinction of being a dividend king. And the three dividend stocks we’ll explore have the added benefit of receiving one or more strong buy ratings from analysts.
Johnson & Johnson (JNJ)
Founded in 1886, Johnson & Johnson (NYSE:JNJ) stock has been a tough hold in the last year. The stock was down around 7.8% in that time. And 2024 isn’t getting off to a much better start with JNJ down 2.9%.
The pharmaceutical giant will be paying the settlement in its talc lawsuit for some time to come. And investors are now pricing the stock without its consumer products division that it spun off and now trades as Kenvue (NYSE:KVUE).
But things could change quickly, Johnson & Johnson plans to buy Shockwave Medical (NYSE:SWAV) for $13.1 billion. The deal still must be approved by Shockwave shareholders. But if it goes through, JNJ will have access to Shockwave’s first-to-market Intravascular Lithotripsy technology (ILT).
Another potential catalyst is that JNJ stock is cheap at just 11x trailing earnings and 14x forward earnings. The consensus price target of 19 analysts is $176.38, which marks a 15.9% upside. Plus, 7 out of 23 analysts give the stock a strong buy rating.
Gorman-Rupp (GRC)
Gorman-Rupp (NYSE:GRC) is a picks and shovel play on the country’s need to bolster its infrastructure. GRC makes pumps and pumping systems primarily for water-related products.
The company has delivered higher year-over-year (YOY) revenue and earnings in each of the last four quarters. Also, it’s increasing its cash while decreasing its debt, which justifies the 64% gain in the GRC stock price.
At 24x forward earnings, some investors may feel that Gorman-Rupp is richly valued. To be fair, you’re largely on your own when it comes to assessing GRC stock. Gorman-Rupp is a small-cap company with a market cap of just over $1 billion. Only two analysts have issued a 12-month price target for the stock. Yet both give GRC an upside of about 10%. Plus, the one analyst that has issued a rating in the last three months gives the stock a strong buy rating.
Walmart (WMT)
Over the past five years, Walmart (NYSE:WMT) has proven that it’s not just one of the best dividend stocks investors can own, it’s one of the best stocks period.
If you’re looking for growth, WMT is up 81% in the past five years. And if it’s income you’re looking for, Walmart has a highly reliable dividend that has increased for 52 consecutive years.
In 2023, the retailer continued to be a go-to location for consumers looking to get some relief from inflation. Walmart hasn’t been immune to the effects of inflation and notes that its consumers are prioritizing staple items over discretionary goods.
That’s why the company did post YOY gains in revenue and earnings. Plus, the company is forecasting high single-digit earnings growth in the next 12 months.
Currently, the stock trades for 31x earnings, and some investors may be concerned about its valuation. That could be a reason the stock has pulled back about 0.45% in the last month. But, analysts are forecasting 9.5% share price growth, and 26 out of 39 analysts give WMT stock a strong buy rating.
On the date of publication, Chris Markoch 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.