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Dividend stocks are making a comeback as investors understand the possibility of a higher and longer interest rate scenario and look for safe stocks that can promise a steady income stream during market volatility. Dividend stocks have accounted for about 40% of market returns since 1930, according to an analysis by Fidelity Investments. Dividend stocks also excel during periods of high inflation. An analysis cited in a report from NCM Investments shows that dividend stocks outperformed the broader index by 3.7% annually over the past decade when inflation was at its highest levels – in the 1940s, 1970s and 1980s.
In tough times, income investors flock to dividend growth stocks with decades of consistent dividend increases. Dividend Kings are at the top of this stock category because these companies have been increasing payouts without interruption for more than 50 years.
When Wall Street analysts see the benefit of a dividend king, the market pays attention. Irving, a Texas-based consumer goods and personal care company Kimberly-Clark Corp (NYSE:KMB) is a dividend king with 52 years of dividend increases recently appearing on analysts’ radar. On June 13, Bank of America upgraded Kimberly-Clark to Buy from Underperform and raised its price target for the stock from $115 to $160. The stock closed the June 14 session at $139.49, meaning BofA’s price target represents 14% upside potential for KMB. BofA analyst Anna Lizzul cited structural improvements and a long-term growth strategy the company is executing to boost organic sales. The analyst expects the maker of Huggies diapers and Kleenex tissues to grow its market share in premium products after a challenging 2023.
In April, Kimberly-Clark posted strong first-quarter results and raised its full-year guidance. Adjusted earnings per share for the quarter came in at $2.01, beating Wall Street consensus expectations by $0.37, while revenue of $5.15 billion beat consensus by $60 million. Kimberly-Clark now expects adjusted operating profit to grow at a low rate of ten percent on a constant currency basis, compared to previous expectations of low-to-mid single digit growth. Organic sales growth for the year is now expected to be in the mid-single digits, compared to the low to mid-single digits growth the company had previously anticipated.
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This article A Notable Wall Street Analyst Just Upgraded This Dividend King With a Yield Above 3.5% originally appeared on Benzinga.com
