January 1 has always held the symbolic idea of fresh starts. Many of us like to start our new year with a resolution, and I’m betting many worldwide are thinking of financial security as their new year pledge. Investing in dividend stocks can be a great start towards that goal—but, then again, who says you can’t start your new year resolution early?
So, as we round the last corner of the year, let’s take a look at which Dividend Kings offer the highest yields in their class.
How I Came Up With The Following Stocks
The first step to this analysis is getting to Barchart’s Stock Screener tool. From there, I added the following filters:
- Current Analyst Rating: 4 (Moderate Buy) to 5 (Strong Buy). I’m aiming for Dividend Kings with the highest ratings, so I’m limiting the results to those with average scores within the highest bracket.
- Number of Analysts: 12 or more. Dividend Kings are mature companies with decades or even centuries of history behind them, so they’re one of the market's most well-covered groups of companies. However, I still like to ensure that consensus data is, well, consensual, so I limited the results to stocks that 12 or more analysts cover.
- Annual Dividend Yield: 3% or more. 3% is a reasonable minimum for this search, as investors agree that a decent dividend yield starts at around that value.
- Watchlists: Kings. As you can see on the screenshot, I maintain several watchlists on Barchart. Using the Stock Screener tool, I can pick and choose any of them and subject them to any sets of filters I need for any analysis. For now, I’ll limit the search to my Dividend Kings list. (Honestly, this cross-utilization of features is one of my favorite things about the site.)
After setting up these filters, I ran the screen and got exactly three companies. I arranged them from highest to lowest dividend yields by clicking on the Div Yield (a) column header.
Now, let’s start discussing these top-rated high-yield Kings, starting with the top one:
Federal Realty Investment Trust (FRT)
Any “highest-yielding Dividend King” list will almost certainly have a REIT, and today, it’s Federal Realty Investment Trust. The company focuses on investing in mixed-use and retail properties and has operated for over 60 years. One of its hottest upscale properties is Santana Row in San Jose, CA, with more than 2.4 million square feet and thousands of properties that range from condos to restaurants and offices.
Federal Realty has 57 years of consecutive dividend increases, making it the REIT with the longest increase streak. Currently, it pays $4.40 annually, which translates to a 3.97% yield. FRT stock also maintains a strong buy recommendation from 16 analysts, making it an attractive pick to start the new year right.
AbbVie Inc (ABBV)
AbbVie is a pharmaceutical company known primarily for adalimumab or Humira, a drug used to treat autoimmune disorders such as rheumatoid arthritis, plaque psoriasis, and Chron’s disease. Humira is one of the best-selling drugs in the world, though AbbVie lost its market exclusivity in 2023, opening the market for biosimilars.
In more recent news, AbbVie announced that its clinical-stage schizophrenia drug Emraclidine failed two mid-stage studies, leading to a massive sell-off that dropped its price from $200 to around $176 as of last close.
Many investors would look at the recent developments and steer clear of ABBV stock. Still, this presents an opportunity for income investors to buy an excellent Dividend King at a discount, and analysts share the sentiment, rating ABBV stock a moderate buy.
AbbVie has over 50 years of increased dividends, most inherited from its previous parent company, Abbott Laboratories. Its latest quarterly payout is $1.64, translating to a $6.56 annual rate and a 3.72% yield.
Coca-Cola Company (KO)
Last but not least, the Coca-Cola Company is a total beverage company known primarily for its namesake soft drink, the largest non-alcoholic beverage brand in the world. Aside from Coke, it has over 200 brands worldwide, including Jack Daniels, Minute Maid, Dasani, Fanta, and Powerade.
KO stock has long since been a favorite of dividend growth investors, with Warren Buffett famously investing since the 1980s. Today, Coca-Cola pays 48.5 cents quarterly, which reflects a $1.94 annual rate and a 3.13% yield. It also has a strong buy recommendation from analysts and the highest average score on this list at 4.50.
Final Thoughts
With their track records of more than 50 years of dividend increases, Dividend Kings can make excellent additions to any long-term or retirement portfolio. However, not all Kings are worthy of a buy at all given times, so checking out what analysts think can be a great shortcut to identifying entry opportunities. As always, it’s still best to do your own research, as it’s your own money you’re investing.
Happy New Year!
