Right now, three high-quality Dividend Kings are trading near long-term lows, offering values and yields not often seen. These aren’t broken businesses—just temporarily out-of-favor stocks poised for recovery. While the rebound may take time, their bottoms are in, and the downside is limited, giving investors a window to build positions before prices climb. But that window won’t stay open forever.
1. Hormel Foods: Positioned for Recovery
Hormel (NYSE: HRL) has struggled with sluggish sales and margin pressures over the last few years, but is emerging from the tough times in a better operating condition.
The latest earnings report revealed that it returned to growth and improved margins, news that led analysts to issue positive sentiment and price target revisions.
The takeaway from the analyst activity is that the downtrend in sentiment and price target revisions has ended; this stock is no longer a Sell but a Buy, with a 10% upside potential at the consensus. The revisions suggest a high likelihood that the stock price will move into the high-end range and continue to rise.
The catalyst for the move could come with the upcoming earnings report. Analysts have set a low bar with their revisions, with nearly 100% of them including reduced targets, and consumer trends remain positive. Although the May retail sales data showed sales declined sequentially, the year-over-year (YOY) comparisons were strong, suggesting strength will also be seen in results from companies like Hormel.
In the longer term, Hormel is expected to sustain a modest single-digit growth pace with solid margins, enabling it to maintain its dividend and distribution growth trends. The caveat for investors is that Hormel’s distribution growth pace is slowing and is likely to continue doing so due to the payout ratio. The payout ratio is running near 85% leaving little room for anything but dividend payment. As it stands, the company can reinvest in the business while maintaining a healthy balance sheet.
2. Genuine Parts Company: 30% More Yield Than Average
Genuine Parts Company’s (NYSE: GPC) dividend yields about 3.4% in late June. That is a solid yield for any Dividend King but a high yield for this stock, which has averaged about 2.7% over the past five and 10-year periods.
Analysts are less vocal, but their activity aligns with a bottom for the market, including noteworthy upgrades and price target revisions earlier in the year.
Among the headwinds is the unknown headwind of tariffs; however, the analysts' low bar is likely to be easily beaten in the upcoming earnings report. The car parts market is thriving because it enables Americans to keep their cars running for longer periods.
The takeaway for investors is that the analyst sentiment firmed to Moderate Buy from Hold this year, and the consensus reported by MarketBeat forecastsa 10% upside in addition to the yield. The upside potential is likely to increase as time progresses, driven by the long-term outlook, which includes sustained, modest revenue growth and widening margins.
3. The Procter & Gamble Company: No Gamble for Investors
The price action in 2025 has the PG stock market at a long-term low and the yield at the high end of its historic range, near 2.65%.
The yield is safe at 65% of the earnings due to the quality operation. The balance sheet carries debt, but it is relatively low and manageable, and the cash flow is reliable.
Procter & Gamble is also able to buy back shares. The buyback reduced the countby nearly 1% on average in FQ3 and is expected to continue robustly in FQ4 and the subsequent fiscal year.
Upcoming catalysts include the FQ4 results, which are expected to show growth and margin strength, despite the low bar set by analysts, as 100% of them, tracked by MarketBeat, have reduced their target since the last report. Procter & Gamble is expected to grow revenue at a mid-single-digit pace over the long term and to widen its margin. Analysts have given this stock a consensus Moderate Buy; the sentiment rating is firm, coverage is rising, and the price target is steady, forecasting about 10% upside this year.
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