Dividend stocks are great investments if you’re looking for a stable income in retirement. Dividend Kings—companies that have paid increasing dividends for the past 50 consecutive years—are more reliable than most (though the title is not always a certainty.) 

But how do you pick from the 50-plus companies on the Dividend Kings list? Sadly, many investors typically start by looking for dividend stocks with the highest yields, only to have them crash shortly after due to unsustainable payout ratios or weakening fundamentals.

“Dividend yields should be considered but certainly should not be the only criteria,” says Jason Buol, SVP, Senior Portfolio Manager, and Team Leader at Associated Bank. “A more balanced approach, including additional metrics like dividend growth, balance sheet strength, valuation, cash flow analysis, and others is recommended.” 

Now, I understand that not everyone has the time, experience, and inclination to get the full picture by diving into multiple company filings. Thankfully, analysts get paid to study the ins and outs of company filings, business practices, and prospects to get the best possible idea of where its stock price is headed. These analyses are then quantified, and stocks are given scores from one to five, with five being the highest and most recommended for buying. 

That’s why I’ll look at the highest-rated Dividend Kings to buy today. 

How I Came Up With The Following Stocks

Today’s analysis is designed to be simple. I used Barchart’s Stock Screener tool with the following filters to get my list today: 

The combination of the Current Analyst Ratings, set to 4.5 to 5 to look for the highest-rated Dividend Kings, and the Number of Analysts filters set to “Very High” will result in a “ best-of-the-best” Dividend Kings list.

Five companies match the parameters, and I arranged them from highest to lowest in terms of analyst rating: 

Now, I’ll take the top three and discuss each one, starting with the number one spot: 

S&P Global (SPGI)

S&P Global is one of the world's biggest and most popular financial information and analytics companies. The company provides credit ratings, market intelligence, and exclusive analytics to businesses and investors across financial services, commodities, technology, and more. Of course, you’d know about its most famous index, the S&P 500, but it also maintains and owns multiple indices, including the Dow Jones, Global BMI, and fixed-income ones like the U.S. Treasury Bond Current 10-Year Index. 

Now, I want to be upfront about this: S&P Global is not a high-yield company. Its trailing twelve month (TTM) dividend is $3.84, which reflects a measly 0.7% yield. 

However, the company’s strength and market presence more than makes up for its low yield. The company has the highest rating on this list at 4.81 (up from 4.80, 3 months ago), a one-year $650 (high) price target. If that's not all, its 5-year dividend growth rate is 59.65%, and has returned over 100% to its investors over the same period. I guess that’s why it's number one on my list. 

Coca-Cola Company (KO)

The Coca-Cola Company rarely needs an introduction: it’s one of the biggest beverage companies in the world and a top Dividend King, with 63 years of straight increases and more than a hundred years of dividend payments, ranking it as a rare Dividend Zombie.  

Analysts rate KO stock an average score of 4.77 and set a one-year high target price of $85. Its latest annual dividend is $2.04, translating to a 2.91% yield, which makes it the highest-yielding Dividend King on this list. 

The company’s tried-and-tested business model, reliable cash flow, and global presence in a generally stable consumer staples industry give me confidence that it can keep increasing its dividends for the foreseeable future. 

Parker-Hannifin Corp (PH)

Parker-Hannifin Corporation, also known as just Parker from its original company name, is an industrial manufacturing company specializing in motion and control technologies for various industries, including aerospace, automotive, and healthcare. It provides engineered solutions in fluid management, hydraulics, pneumatics, and electromechanical systems.

Parker-Hannifin pays $1.63 quarterly, reflecting a $6.52 annual rate and 0.94% yield. Again, yields aren’t stellar, but if history is to repeat itself, Parker should be increasing their dividend next quarter for the 69th consecutive time to somewhere between $1.79 and $2.10 a share. Not only that, the company has the highest 5-year dividend growth rate at 92.09% and a consensus strong buy recommendation with a one-year high target price of $842. 

Final Thoughts

Don’t be fooled by low dividend yields. These top 3 Dividend Kings appear on many of my “Top 3 lists” for many reasons, but mostly because they’re the closest things to a fixture in their industry. Their strong brand presence, reliable revenue streams, and unquestionable dedication to providing shareholder value make them some of the best long-term investments you’ll ever find in the market.