Two Kings of Dividends You Can Buy Right Now for a Pitiful Price

A Wall Street adage suggests to purchase when there's blood in the streets. That may be too severe for most investors, but you can often find the finest buys on stocks other investors fear. Stanley Black & Decker (NYSE: SWK) and Black Hills (NYSE: BKH) are out of favor, therefore you may want to consider these two historically low Dividend Kings.  

1. Stanley Black & Decker is down. A stock called a "fallen angel" has suffered a setback that has sent its shares plummeting. Stanley Black & Decker appears to have lost its wings with a stock price down almost 55% since its 2021 high. That's justified: Adjusted earnings reached a record $10.48 per share in 2021 before declining to $4.62 in 2022 and $1.45 in 2023.  

Financial issues and debt-funded acquisitions made the legendary tool producer bloated and inefficient. Management has been selling assets, streamlining operations, cutting costs, and paying down debt to recover. The payout King maintained its payout, increasing it somewhat despite the earnings fall. The company offers a historically attractive 3.5% dividend yield due to its dedication and substantial stock-price decrease.  

Best of all, the industrial company's turnaround attempts seem to be working. For instance, Stanley Black & Decker's margins rose last year. Executives expect 2024 adjusted earnings to rise to $3.50–$4.50 per share. Stanley Black & Decker has much to prove after two tough years. If it can improve earnings, Wall Street may value the company higher. If you can handle a turnaround stock, dive in now.  

2. High rates will plague Black Hills. A minor electric and natural gas provider, Black Hills serves 1.3 million consumers in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Being a dull (and regulated) utility doesn't make it exciting. However, it has increased its dividend annually for over 50 years, making dull appealing to consistency seekers. At 5%, Black Hills' yield is near a decade-high.  

Utility business model fundamentals are its issue. Power plants and natural gas distribution systems are capital-intensive, hence Black Hills uses debt financing. Regulated operations generate reliable cash flows, reducing the danger of excessive leverage. Debt carries over to higher rates, thus rising interest rates will raise costs. Black Hills faces that, and investors have liquidated the stock and the utility sector.

However, authorities will eventually consider increased interest rates when approving capital investment projects and utility prices. Eventually, Black Hills' business will adjust. Additionally, long-term investors can acquire a dull and stable Dividend King with a historically high yield. Customers in Black Hills' regions are growing at roughly three times the U.S. population. This bodes well for long-term success and dividend increases.  

Opportunities won't stay forever. Stanley Black & Decker has the greatest upcoming catalyst of these Dividend Kings. If you wait, you may miss the historically low price. Black Hills is likely a long-term tale because interest rate adjustment cases take time. Still, start your thorough dive now when the stock is moribund and the yield is historically high.  

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