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Dividend stocks are making a comeback as investors understand the possibility of a higher-for-longer interest rate scenario and look for safe stocks that can promise a steady income stream during market volatility. According to an analysis by Fidelity Investments, dividend stocks have accounted for about 40% of the market returns since 1930. Dividend stocks also shine during high inflationary periods. An analysis quoted in a report by NCM Investments shows that over the past 10 decades, dividend stocks outperformed the broader index by 3.7% annually when inflation was at its highest levels — during the 40s, 70s and 80s.
When times are tough, income investors flock to dividend-growth stocks with decades of consistent dividend hikes. Dividend kings sit at the top of this category of stocks since these companies have increased payouts for 50+ years without a break.
When Wall Street analysts see the upside to a dividend king, the market pays attention. Irving, Texas-based consumer goods and personal care company Kimberly-Clark Corp (NYSE:KMB) is a dividend king with 52 years of dividend increases that recently came on analysts’ radar. On June 13, Bank of America upgraded Kimberly-Clark to Buy from Underperform and increased its price target for the stock to $160 from $115. The stock closed the June 14 session at $139.49, which means BofA’s price target represents a 14% upside potential for KMB. BofA analyst Anna Lizzul cited structural improvements and a long-term growth strategy that the company is executing to drive organic sales. The analyst expects the maker of Huggies diapers and Kleenex tissues to grow its market share in premium-tier products after a challenging 2023.
In April, Kimberly-Clark posted strong first quarter results and increased its full-year guidance. Adjusted EPS in the quarter came in at $2.01, beating Wall Street consensus estimates by $0.37, while revenue of $5.15 billion surpassed the consensus by $60 million. Kimberly-Clark now expects its adjusted operating profit to grow at a low-teens percentage rate on a constant-currency basis, versus its previous guidance of low-to mid-single-digit growth. Organic sales growth in the year is now expected at mid-single digits, compared with the low-to mid-single-digit growth the company had guided for previously.
Are You Missing Out on Higher Yields?
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For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000.
Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.
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This article A Notable Wall Street Analyst Just Upgraded This Dividend King With A 3.5%+ Yield originally appeared on Benzinga.com
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