These 2 New Dividend Kings Are A Strong Buy

Investors looking for some potential upside a lot of options. The first half of 2022 has pushed many stocks on the S&P 500 into oversold territory. Last week, the July unemployment rate fell -0.1 to 3.5%, matching a five-decade low.

Today, we have the July 2022 CPI data to provide insight into whether or not inflation has (hopefully) peaked. Indeed, commodity prices have been dramatically lower in the last 3 months. For example, in the last 90 days, corn is down almost 20%, oil is down almost 24%, and even natural gas is showing signs of relief. And as a result, CPI is expected to come in at +0.2%. 

That said, there are still significant amounts of cash on the sidelines. And investors will eventually want to put it back to work. Dividend investors look to quality companies with durable competitive advantages and dividend-friendly management to provide long-term value. These companies tend to overperform against the index over time - all while acting like ATMs for the shareholders. For this reason, I’ve put together two stocks that analysts love. They are the two highest-rated dividend aristocrats and also happen to be newly minted dividend kings!

S&P Global Inc. (SPGI)

S&P Global Inc. is an information services provider that offers financial services, education, and business information and analytics in the global capital, commodity, and automotive markets. It was founded in 1917. The company is headquartered in Manhattan, New York, and employs more than 22,000 people.

The company’s operations are divided into six segments:

• S&P Global Ratings offers impartial investment research, including evaluations of different financial instruments.
• S&P Global Market Intelligence provides investment firms, banks, insurance companies, different enterprises, and universities with comprehensive real-time data, research, and analytics.
• S&P Dow Jones Indices provides CE-accredited research data to investors. This segment also produces the S&P 500 and Dow Jones Industrial Average.
• S&P Global Commodity Insights offers information and benchmark prices for various industries.
• S&P Global Mobility offers customers information and data about everything related to automotive.
• S&P Global Engineering Solutions provides engineers and technical professionals with solutions to many technical issues with the help of Artificial Intelligence (AI).

Recently, the company has seen some changes in its administrative structure. On June 28, 2022, the company announced that John Berisford would take the position of Executive Advisor. Additionally, on August 4, 2022, the company named Aaron Baldwin as the Chief Product Officer and Michael Eager as the Chief Revenue Officer.

Stockholder Information

The Vanguard Group, Inc. holds an 8.64% stake in SPGI and is the company's largest shareholder. The second and third largest shareholders are Blackrock Inc. and State Street Corporation.

On August 2, 2022, the company released its results for the second quarter of 2022. SPGI’s revenue for the quarter ending June 30, 2022, was $2.993 billion, a 42% increase year-over-year.

Additionally, the company announced a quarterly dividend of $0.85, payable on September 12, 2022. And its latest Ex-dividend date is August 25, 2022. The company also has an annual dividend of $3.4 and an annualized dividend yield of 0.9%. Also, its dividend payout ratio is 25.55%, which is very low. This could indicate the company is reinvesting its net earnings into the business.

On August 2, 2022, SPGI also announced that its earnings per share (EPS) for the fiscal quarter ending June 30, 2022, was $2.81, a decrease of 13% from the previous year’s quarter.

Dividend info

With its June 2022 payment, SPGI has increased its dividend for 50 consecutive years. This makes the company a dividend king, as well as a dividend aristocrat. 

Dividend aristocrats are S&P 500 listed companies with 25+ consecutive years of dividend increases. On the other hand, dividend kings are companies that have increased tier dividends for 50+ consecutive years. That said, dividend kings don’t need to be listed on the S&P 500. That means a company could be a dividend king but not an aristocrat.

Analyst rating

S&P Global is trading just above its low target. That said, analysts predict that SPGI's stock price will rise by the end of the year. For example, the company has a high estimate of $485 representing a potential upside of 28.6%. 

Abbott Laboratories (ABT)

Abbott Laboratories is a diversified healthcare company that provides various products and services to the healthcare industry, including pharmaceuticals, medical devices, and nutrition products. with operations in more than 160 countries. It was founded in 1888 and has been a dividend aristocrat since 1972. Today, Abbott has a diversified business model with several businesses that employ more than 113,000.

Shareholder Info 

On July 20, 2022, Abbot Labs reported earnings per share of $1.43 for the most recent quarter  - a surprise of 31.19%.

"We achieved another quarter of strong growth and are raising our full-year EPS guidance," said Robert B. Ford, chairman, and chief executive officer, Abbott. "Our new product pipeline has remained highly productive, and our diversified business has continued to be resilient in a challenging macro environment."

Dividend info

Starting with the February 15, 2022 payment, Abbott increased its dividend for the 50th consecutive year - placing it on the dividend kings list.

Today, its $1.88 annual dividend represents a yield of 1.72%. And while this might not be exciting, investors should note that the dividend payout ratio is currently 30.82 percent. And this leaves the company plenty of room for dividend growth before the earnings release.

Analyst rating

Abbot Laboratories is currently trading below its mean target of $127.15. However, its high target of $150.00 represents a potential upside of 39% over and above the last trading price. Will it get there? It’s anyone's guess. That said, while the fundamentals are compelling, analysts give Abbott labs the highest score among the dividend aristocrats.

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