Black Friday selloff: 3 attractively priced dividend kings

Written by
Dividend.watch team
Published on
11/27/2021

Black Friday is usually about great deals at stores, but this year stock markets are on sale as well! As a new covid variant has been discovered in South Africa, investors are worried about lockdowns. This new B.1.1.529 variant spreads quickly and while there's no evidence of how it will resist vaccines, panic has already started. Even before this discovery, the pandemic development was far from positive with lockdowns announced in several European countries.

Despite the selloff, markets are still high. Having a look at the S&P index around 4,600 it's close to the value we observed on October 25. Indices are falling everywhere with U.S., Japan around -2.5% on average, German DAX -4%, and UK FTSE declined even by -5%. While “covid related” stocks such as Pfizer, Abbott Labs, or Zoom Video are soaring.

Don't forget that the correction is when indices declined by more than 10% and the bear market starts with at least 20% decline. So there's still a way to go.

However, thanks to the selloff we can find attractive-priced dividend kings all around the world.

Let's have a look at three of them!

Germany - Munich Re (MUV.DE)

There're not many dividend kings in Europe, but Munich Re is one-of-a-kind. The company has “easy to remember” full name Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft. It is a dividend king with 51 years of dividend growth streak, offering 4.15% dividend yield and a 5-year dividend growth CAGR of 4%.

Like other companies in Germany, Munich Re declined by 6.7% on Friday. With a price of €236 and forward P/E of just 12 which is in line with the 10-year average, it is close to fair value, while analysts' average price targets are around €276.

Munich Re is one of the largest reinsurers in the world and offers insurance services as well under the ERGO brand. Having a dividend king status in this tough industry is proof of strong fundamentals and business moat.

USA - Leggett & Platt (LEG)

Founded in 1883, Leggett & Platt manufactures bedding products such as mattress springs or special foams and specialized products for various industries such as automotive or aerospace like systems for seating, aircraft suspension systems, etc.

The company is almost a dividend king with 48 years of dividend growth and offers 4.1% dividend yield. Leggett & Platt did not increase dividends in 2020 but the growth came back in 2021 with 5% increase which is in line with 5-year dividend growth CAGR.

The company currently trades at a forward P/E of 14 while its 10-year average is 20! So even being conservative and picking a P/E of 15 or 16, the company is at the discount! During Black Friday shares of Leggett & Platt declined by 2.88%!

UK - Unilever (UL)

Unilever's performance on Black Friday was exceptional! It grew by 0.76% and proved that it is a defensive business! While U.S. investors might see Unilever's dividend volatile due to forex, the company grew its dividends for 54 years! It offers a 3.9% dividend yield with a 5-year dividend growth CAGR of 8% (using data from Unilever official site).

Founded in 1930, the company produces fast-moving consumer goods in 3 segments: Beauty & Personal Care, Foods & Refreshment, and Home Care under brands like Axe, Clear, Dove, Rexona, Signal. Ben & Jerry's, Breyers, Hellmann's, Knorr, Domestos and other.

Unilever currently trades at a forward P/E of 17 which is well below the 10-year average of 20.

More attractive dividend kings

There are 2 more attractive prices dividend kings than what we covered previously such as Abbvie and Johnson & Johnson. Have a look at the articles!

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Disclaimer: This article is only for educational purposes. Don't buy or sell stock based solely on above-mentioned information. Investment in securities carries risks.

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