Struggling to find stocks to improve your portfolio’s total return? In today’s market, finding stocks that balance risk and return is the struggle of most investors. One of the common questions investors ask is what stocks can offer protection and returns for their retirement. If you have that question too, then let me introduce the prestigious “Dividend Kings.”
So, what are Dividend Kings? Dividend Kings are groups of long-term dividend stocks with some of the longest histories of dividend payments and dividend increases for at least 50 consecutive years. These companies offer a balance of capital growth, high dividend income, and diversification to mitigate risk. Investors should look at these types of stocks if they are looking for high-profit dividend stocks. In my experience, if you can invest in Dividend Kings and pick them up at low prices, you can boost your portfolio’s total return even more!
But how can you find Dividend Kings that are currently trading at low prices? One way is to look for dividend stocks that recently registered an “oversold” reading. Oversold levels are determined using a momentum indicator, RSI. When RSI registers a value below 30, it indicates that the security is now oversold.
Now let’s look at these Dividend Kings that currently trade at bargain prices.
California Water Services Group (CWT)
California Water Service Group (NYSE:CWT) is a holding company providing water utility and related services through its subsidiaries. The company offers its services in California, New Mexico, Washington, Texas, and Hawaii. The bulk of CWT’s business consists of the production, storage, purchase, treatment, distribution, testing, and sale of water for domestic, industrial, public, and irrigation uses and the provision of domestic and municipal fire protection services.
California Water Service Group has been trading bearishly for a while, starting on Nov. 25, 2022. Last week, the stock’s 14-day RSI went into oversold territory, and the price dropped to $49.63 — its 52-week low. Investors stepped in after the oversold reading and started buying, which resulted in a boost. This is a prime example of how a stock flashing oversold readings can attract buyers to high-profit dividend stocks.
When buying long-dividend stocks like CWT, we need to consider that the company has a dividend yield of 2.01%, an attractive dividend payout ratio of 76.43%, and a 5-year dividend growth rate of 38.89%. The company has also constantly increased its dividend payments for 56 years, cementing its name among the prestigious dividend kings.
SJW Group (SJW)
SJW Group (NYSE:SJW) is a holdings company originally formed in 1985 as SJW Corp and later changed to its current name. Today, SJW provides water utility and related services through its California, Connecticut, Maine, and Canyon Lake, Texas subsidiaries. The company also provides property management and investment activities through its SJW Land Company and Chester Realty, Inc.
SJW Group prioritizes investing in its water supply and infrastructure. According to its June 2023 presentation, the company has allocated $1.6 billion for its five-year capital investment plan in water/wastewater infrastructure and per- and poly-fluoroalkyl substances (PFAS) remediation (subject to regulatory approval). The result is that the company prioritizes innovation and capital growth even in a “boring industry” that doesn’t often change.
The company’s recent 14-day RSI oversold reading presents a potential buying opportunity for investors. In fact, traders started taking advantage of SJW’s attractive price point, coinciding with the immediate support area of around $68.17. With more follow through, we may have just seen the short-term bottom for SJW.
Dividend investors will note the company offers a 1.97% dividend yield with a payout ratio of 54.3%. Not only that, SJW has increased its dividends for 56 consecutive years, cementing its place as a dividend king.
Tootsie Roll Industries (TR)
Tootsie Roll Industries (NYSE:TR) is the last company on this list of oversold Dividend Kings. The company is a household name for children — and children at heart.
Tootsie Roll Industries manufactures confectionary products sold under its trademarks, like Tootsie Roll, Tootsie Fruit Rolls, Frooties, Tootsie Pops, etc. Its products are currently sold through food and grocery distributors or by the company itself in countries like the United States, Canada and Mexico.
TR is currently trading near its strong support area, around $35-$36. The company recently registered an oversold reading in its 14-day RSI, signaling that we may expect a bounce or a change in trend in the near term.
Tootsie Roll Industries has a dividend yield of 1.02% and a dividend payout ratio of 32.12% with a 5-year dividend growth rate of 16.67%. Even with a lower yield than the other companies on the list, the company has constantly increased its dividend for 54 years. Dividend Kings like TR stock are a great addition to a long-term portfolio.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines