The stock market is not known for consistency. Look at things like hypergrowth technology companies or meme stocks: These sorts of assets tend to require active monitoring and trading to achieve best results.
For investors with a different time horizon, however, the stock market also offers opportunities. Income investors, in particular, tend to appreciate stability and predictability over fast gains and high levels of volatility.
And what could be better than companies that have raised their dividend payments for at least 50 years in a row. These forever stocks – nicknamed Dividend Kings – have proven their mettle through an incredible number of economic and political challenges over the decades. For these three dividend stocks in particular, they are also selling at attractive valuations today, making it a fantastic entry point right now.
Hormel Foods (HRL)
Hormel Foods (NYSE:HRL) is a packaged foods company focused on protein products. Known for its canned pork product Spam, the Hormel of nowadays is more focused on health-conscious products such as natural and organic meats, guacamole, Mexican salsas, and nuts and nut butter.
HRL stock had a dreadful run over the past two years. The company has been hit by higher commodity prices, higher labor costs and pushback against price increases in the grocery aisle. Hormel’s profit margins slumped and the stock price has had its worst drawdown in decades.
For long-term investors, this marks a compelling opportunity. Hormel increased its dividend for 57 consecutive years. And because the company is controlled by a charitable foundation, its mission is to keep increasing the dividend steadily each year to enable further charitable work. HRL stockowners can tag along for an ever-increasing income stream.
Hormel is facing problems right now. However, management has guided to better results starting in the back half of 2024. The company’s budget-conscious assortment of food products should serve it well when the next recession inevitably hits and consumers trade down to save money. HRL stock usually offers a fairly low yield, but currently is paying a generous 3.7%.
Colgate-Palmolive (CL)
Colgate-Palmolive (NYSE:CL) is the world’s dominant producer of toothpaste and oral hygiene products along with its home cleaning products business.
While the toothpaste market is somewhat competitive in the U.S., Colgate has a virtual monopoly in many overseas markets. Where I live in Colombia, for example, almost everyone uses “Colgate” instead of the dictionary-correct Spanish word when referring to toothpaste. Historically, investors tend to do well when a company’s brand becomes so popular that it becomes a proper noun.
Colgate’s marketing is one part of its success formula. The other is the timeless nature of its key products. Regardless of technological disruption or fashion trends, people will always desire to have healthy and shiny white teeth. No recession or economic trend will change that fact.
Colgate stock underperformed over the past decade as slower-moving blue-chip companies failed to keep up with leading tech giants. In addition, Colgate suffered significant economic losses from hyperinflation and economic volatility in markets like Venezuela and Argentina.
However, Colgate’s recent performance has improved markedly, and the stock appears to breaking out to new highs after a long consolidation period.
Northwest Natural Gas (NWN)
Oregon-based natural gas utility Northwest Natural Gas (NYSE:NWN) has one of the most exemplary dividend track records in America. Incredibly, Northwest has increased its dividend payment for 68 years in a row. Be it landing on the moon, the 1970s inflation, the fall of the Soviet Union, the 9/11 attacks, or the COVID-19 pandemic, Northwest kept its dividend track record going in spite of it all.
Northwest has been in business since 1859. Today, its gas utility serves approximately 2 million people with its water and wastewater operation serving another 180,000 people. It also owns approximately 14,000 miles of pipelines.
Selling natural gas may not be particularly exciting, but it’s as steady of a business as it gets. That said, Northwest had a dip in earnings tied to the pandemic and natural gas price volatility. That, along with higher interest rates, caused the price of NWN stock to plunge. Shares now trade for just 13x estimated 2025 earnings along with offering a 5.2% dividend yield.
On the date of publication, Ian Bezek held a long position in HRL and NWN stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
