What Can The Dividend Kings Deliver In 2025?

2025-01-24 03:14:25 ET

Summary

• The Dividend Kings underperformed the broad U.S. equity market in 2024, achieving a 5.53% total return compared to the S&P 500's 24.89%.
• 2024 returns for the Dividend Kings were primarily driven by earnings growth and dividends, with the change in P/E ratio being a detractor.
• I breakdown the components of total return for each Dividend King by sector to gain insights into current valuation.
• I present the 18 most opportune Dividend Kings today based on valuation and forward-looking total return.

2024 Review

On average, all 54 Dividend Kings, achieved a 5.53% total return in 2024. Suffice it to say, last year was not a great year for these elite dividend stocks, at least relative to the broad U.S. equity market. The SPDR S&P 500 Trust ETF (SPY) generated a total return of 24.89% in 2024, far outpacing the Dividend Kings. But let's unpack the performance of the Dividend Kings in 2024 and maybe gain a little insight as to what can be expected from these stocks in 2025.

What Drives Total Return

A total return is driven by 3 components: Earnings Growth, Change in P/E multiple and Dividends. Let me give you an example....

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