Investors are on edge as they digest recent market events. For example, the Federal Reserve pointed to an interest rate hike in March. Additionally, geopolitical concerns in Russia have traders worried. And finally, sprinkle in some ongoing pandemic worries, and it’s understandably difficult for people to invest for the long term. While retirement accounts may be taking a hit right now - many companies trade at attractive valuations unseen since the spring of 2020! So if you've got some cash sitting around, is now the right time to put it to use?

If you're a dividend growth investor, you've likely heard of the dividend aristocrats - a list of S&P 500 listed companies that have increased their dividend for each of the past 25 years. But did you know there's an even more elite list? These are the dividend kings. They're a rare breed of companies that have been able to increase their dividends for 50 consecutive years or more. And unlike the aristocrats, these companies don't need to be listed on the S&P 500 either.

Using the 200-day moving average to determine value

The 200-day moving average is the average closing price of a stock, for each of the past 200 trading days, or almost 1 year. Investors like to look at the 200-day MA as it might provide an indication of value.

The following 3 dividend kings are trading below their 200-day moving average (the average price over the past 200 trading days). And, when stocks trade below the 200-day moving average, investors may infer that they are on sale.

PPG Industries (PPG)

PPG Industries is the world’s largest paints and coatings company and sells them under the PPG Paints, Glidden, and Comex brands. 

PPG Industries was founded in 1883 by Captain John Baptiste Ford and John Pitcairn, Jr. They started as a manufacturer and distributor of glass (its name stands for Pittsburgh Plate Glass) and today has approximately 3,500 technical employees located in more than 70 countries at 100 locations. 

On January 20, 2022, the company reported a record fourth-quarter net sales of about $4.2 billion, about 12% higher than the prior year.

Technical Indicators

PPG Industries' last trading price of $154.83 represents an approximate 6% discount over its 200-day moving average of $164.72. Interestingly, the 50-day moving average is also very close by, at $163.40. When the stock’s 50-day MA moves above the 200-day MA, investors often view it as a bullish signal. 

With 120 years of dividend payments and 50 consecutive years of dividend increases, PPG is a newcomer to the list of Dividend Kings.

PPG Industries stock Current Dividend Yield: 1.52%

Lancaster Colony (LANC)

The company has been making food products since 1969, after shifting away from housewares. The pivot has allowed the company to experience some explosive growth in the past five decades. The company generates $1.6 billion in annual revenue. 

Lancaster Colony makes various meal accessories like croutons and bread products in frozen and non-frozen categories. 

The company reported fourth-quarter and full-year earnings on August 26th, 2021, and results were mixed against expectations. Consolidated fourth-quarter net sales increased 20.2% to a record $385.6 million. Retail segment net sales grew 11.4% in the quarter to $214.3 million while Foodservice segment net sales surged 33.3% to $171.3 million. For the fiscal year, consolidated net sales increased 9.9% to a record $1.5 billion as Retail segment net sales advanced 16.1% to $829.0 million and Foodservice segment net sales improved 2.9% to $638.1 million.

Second-quarter, FY2022 financial results will be reported prior to the bell on Thursday, February 3, 2022.

Technical Indicators

Lancaster Colony’s last trading price of $159.64 represents an approximate 10% discount over its 200-day moving average of $177.47. Interestingly, the 50-day moving average is $160.57. When the stock’s 50-day MA moves above the 200-day MA, investors often view it as a bullish signal - so, technical inventors may have to wait a little while. 

On November 10, 2021, Lancaster Colony increased its quarterly dividend to $0.80 per common share, marking 59 consecutive years of increasing regular cash dividends. Shares currently yield 2%.

Stepan Co. (SCL)

Stepan Co. has been around since 1932 and at first, their only product was a chemical to keep the dust down on Illinois’ country roads. Nowadays, they are a chemicals company with surfactants making up most of what revenue comes from them!
The company generates approximately $2.3 billion in revenue per year and has increased its dividend for 54 consecutive years. 

Technical Indicators

Stepan co’s last trading price of $108.94 represents an approximate 10.66% discount over its 200-day moving average of $121.94. However, the 50-day moving average is nearby at $119.38. When the stock’s 50-day MA moves above the 200-day MA, investors often view it as a buying signal. 

Stepan reported third-quarter earnings on October 20th, 2021, and results were well ahead of estimates for both revenue and adjusted earnings. The company reported net income of $36.9 million, or $1.59 per diluted share, up 11% versus $33.2 million, or $1.43 per diluted share, in the prior year. The company is set to report fourth-quarter earnings on Feb 17, 2022.

Stepan Co. pays an annual dividend of $1.34 representing a current dividend yield: 1.23%

*Disclaimer: On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. Data as of after-hours, Jan 31, 2022.