Do you want to invest in the best dividend stocks, but not sure which ones to choose, or if now is the right time? Why not look for oversold Dividend Kings? In this article, I’ll show you a super easy way to pick stocks – and even your grandmother can do it. Then, I’ll show you the list of stocks I got, and pick apart the top five and why I like them.
For this article, I’ll be covering companies from the Dividend Kings list, those are companies that have increased their dividends for more than 50 years straight.
When it comes to investing in dividend stocks, yield is essential. The problem is, the best dividend stocks often have low yields as they tend to trade at a premium, so their yields are often low. The higher the stock price, the lower the yield.
So if you’re looking for a higher yield, you need to get these dividend stocks when they are cheap. And to find out if they are cheap (or oversold), we’ll use the help of RSI or the relative strength index. I’m also going to look at analyst ratings to get confirmation.
Now here’s the thing, these stocks will be the most oversold dividend kings to buy now. But by the time you read this article, lots of time may have passed. And that’s ok. You’ll have a method to do it yourself, and learn a little about the companies that came up.
How I Picked These Stocks
I’ll start by screening my Dividend Kings watchlist to get my list of cheap dividend kings. At the time of publication, there are 54 Dividend Kings.
Then, I’ll just use two simple but effective criteria to narrow the list from 54 stocks to 5. I’ll consider 14-Day RSI, and analyst ratings. Analyst ratings are pretty straightforward; they are opinions made by those who cover the stock. If they rate the stock a buy, they are optimistic about its prospects in the next twelve months.
However, the RSI is key to finding if a stock is cheap. RSI gives us information about a stock’s price movement within a given period on a 100-point scale. RSI scores of 70 and above mean the stock might be expensive, overbought, and could move down – soon. On the other hand, 30 and below indicates that it’s oversold and might be due for a rebound.
The only thing with RSI is that it’s a lagging indicator, meaning you must get in before the action happens. It’s kind of like a chicken and egg situation – and that’s why combining RSI with other metrics, such as analyst ratings is always good practice.
So, for this analysis, I used the default 14-Day period for RSI, then looked for stocks on the dividend kings list trading with an RSI below 40. That way, I can find the cheapest dividend kings to buy today.
After running the scan, I arranged the stocks based on highest to lowest yields, and as you can see, twelve Dividend Kings are trading at a discount. Now, I’ll discuss my list’s top five oversold dividend kings.
Federal Realty Investment Trust
So, we’re starting strong with one of the biggest REITs in the country. Federal Realty Investment Trust (NYSE:FRT) specializes in high-quality retail and mixed-use properties in prime metropolitan markets.
Federal Realty had a great 2024, with excellent growth across important metrics like funds from operations – where your dividends come from – and occupancy rates, which reached record highs this year.
As for dividends, the company pays around a 4% yield, has a strong buy rating from Wall Street, and trades around the 38 RSI level. Federal Reality has also increased dividends for 57 straight years – the longest increase streak in the REIT industry.
Stanley Black & Decker Inc
Next up is Stanley Black & Decker (NYSE:SWK), a tools and industrial solutions company best known for its iconic brands like DEWALT, Craftsman, and Stanley.
SWK stock is in a bit of a downtrend with RSI at 37, which gives investors a chance to snag shares at a discounted price.
By buying a quality company like Stanley, you’d get around a 4% yield, and the potential for some substantial capital gains down the road.
Not only that- the company has increased its dividends for 57 years. It also has a good track record of meeting earnings estimates, so there’s a good case for buying SWK in 2025.
Although, I have to point out that Wall Street’s expectations of SWK are a bit negative with a borderline buy rating, so keep an eye out for further developments.
Target Corp
Next up is Target (NYSE:TGT), one of the biggest retailers in the US. The company posted strong earnings in its latest quarterly report, especially with digital sales, which grew 8.7% year over year.
Wall Street rates it a buy, though we must be careful as tariffs will almost certainly increase prices for American consumers, negatively affecting its performance over the next few quarters.
If you want to take advantage of an oversold stock like this, Target is currently the most oversold Dividend King with a 29 RSI. If you buy the stock at the time of publishing, you can look forward to around a 3% yield. The company has also increased dividends for 53 years and is expected to continue the streak for the long term.
Stepan Company
Stepan Company (NYSE:SCL) is a global chemical manufacturer of surfactants, polymers, and specialty products, serving industries like agriculture, personal care, and construction. The company had a rocky 2024, with its Q4 earnings missing estimates by nearly 66%, which led to many investors selling the stock. When I last checked, SCL is at 30 RSI.
However, there is a silver lining. Stepan’s cash flow improved over the year, and its cost-saving measures are starting to bear fruit. And while it did miss top-line expectations, Stepans’ operating and net income still grew double-digits from last year’s number. Meanwhile, SCL stock still has an overall buy rating with around a 2.6% yield, and has increased dividends for 57 years.
PPG Industries
PPG Industries (NYSE:PPG) manufactures paints, coatings, and specialty materials for global clients. Its stock is currently trading at a new 52-week low, which could mean a very good entry point for this Dividend King.
Now, the company is facing a few challenges, especially in its latest quarter, though it did improve income and margins for the overall year. It also has solid fundamentals and a strong industry presence.
PPG currently pays a 2.41% yield, has a buy rating from several analysts, and has increased dividends for 52 going 53 years, this year.
Final Thoughts
Finding quality dividend stocks trading at a discount can be a great way to build long-term wealth. Not only that, Dividend Kings have a proven track record of rewarding investors with consistent payout increases, making them a solid choice for those seeking income and stability.
Still, we have different investment goals, so it’s always better to consult with a licensed financial advisor for your investment decisions.
What do you think? Do any of these stocks interest you? Let me know in the comments because I’d love to hear your thoughts.
Disclosure: Rick Orford does not have a position in any of the companies mentioned in this article. Stock prices used were the market prices of March 4, 2025.
