Dividend stocks have a proven record of stock market outperformance. For nearly 100 years, income-generating stocks on the S&P 500 have beaten non-payers. There has never been a decade when dividend stocks didn’t produce a positive return.

And then we have the dividend royalty, companies that have raised their payouts the longest. These Dividend Kings have increased their dividends every year for 50 years or more without fail. Through wars, recessions and global pandemics, these businesses kept rewarding their investors for sticking by them.

That doesn’t mean, however, their stocks will always go up. Economic factors and global events can temporarily slow business, causing investors to seek out faster growing stocks. But over time the Dividend Kings always rebound, explaining why they can still claim their thrones.

The following are three royal dividend payers whose stocks are down 10% or more this year. You might want to consider buying these dividend stocks before they rebound once more.

Archer-Daniels-Midland (ADM)
Agricultural products processor Archer-Daniels-Midland (NYSE:ADM) has been trying to move beyond the volatility of its commodities-based business. As one of the biggest traders in grains and oilseeds, it has been using that expertise to develop a leadership position in human and animal nutrition in service of the food, beverages and food supplement businesses.

It has been one of Archer-Daniels’ fastest growing segments, though also one of its smallest. However, in January the ag products specialist revealed it was under investigation by the Securities & Exchange Commission and the Justice Department for overstating historical profits in the nutrition business.

When its other segments sold products to the nutrition business, it did not record the prices at market prices. That inflated the segment’s profits. ADM had to restate six years of operating profits and is now under criminal investigation.

In most instances, that would be a no-go zone for investors. However, the CFO has been put on leave and the company is cooperating with authorities. The biggest risk it faces is fines and penalties. That’s not good, but not fatal either. And Archer-Daniels-Midland’s dividend that yields 3.1% remains secure.

ADM stock has raised its dividend for 51 consecutive years and will undoubtedly continue doing so into the future. The ag products stock is operating under a cloud at the moment but this might be the right time to buy in before the sun breaks through again.

Kenvue (KVUE)
Recently spun off from Johnson & Johnson (NYSE:JNJ), consumer products giant Kenvue (NYSE:KVUE) is one of the newest additions to the Dividend Kings list. It’s sort of a backhanded way for some companies to earn their way in. Having been part of a company that has paid dividends for decades, the new stock adopts the dividend history of their former parent upon separation.

AbbVie (NYSE:ABBV) is another example of dividend royalty that earned its crown through the history of Abbott Labs (NYSE:ABT). Yet it has established its own track record of growing its payout for more than a decade. Kenvue will likely do the same.

Kenvue owns J&J’s former consumer goods brands, including Tylenol, Listerine and Band-Aid. These are some of the top-selling brands in their space and are well-known and loved by consumers. It was spun off from J&J because the healthcare company wanted to focus narrowly on its healthcare business and Kenvue was “getting lost” in the mix.

Shares of the consumer products stock are down 11.5% in 2024 after forecasting 2024 profits below expectations. Kenvue expects earnings of $1.10 to $1.20 per share, short of Wall Street’s forecast of $1.26 per share. It cites foreign currency exchange rates and a tougher market in China as reasons for coming up short.

These are temporary headwinds for Kenvue that won’t affect its dividend, which yields 2.1% annually. It possesses a wide competitive moat with its top-shelf products and the discount it offers makes it a dividend stock to buy now.

PPG Industries (PPG)
Paint and coatings specialist PPG Industries (NYSE:PPG) rounds out our trio of Dividend Kings that have been beaten down by the market. PPG stock is off 10% this year on concerns over the direction of the U.S. economy.

It is looking to sell its U.S. and Canadian architectural coatings business as it sees declining demand for do-it-yourself projects that it sees as a longer-term trend. The business generates about $1.8 billion in annual sales, or about 10% of PPG’s total revenue. It will retain the same business in Asia, Europe and Latin America, with business in Mexico being particularly strong.

The sale is part of a larger restructuring that PPG is undergoing in order to better focus on its best, most profitable operations. Last year it sold its traffic markings business in Europe, Australia and New Zealand. It is also exploring alternatives, including a sale of its silica unit.

PPG will announce earnings this week. It has paid a dividend every year since 1899 and has raised the payout for 52 consecutive years. The coatings company is an otherwise solid company trading at just 14 times next year’s earnings. That makes it a discounted Dividend King to buy now.

— Rich Duprey

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Source: Investor Place