Capital appreciation is usually the ultimate goal when it comes to investing. So, it's only normal that we seek to find the right stock before it takes off - while minimizing the risk as much as possible. That is where companies on the Dividend Kings list come in: they bridge the gap between stability and income.

In many cases, stocks are low-yield, long-term plays. Although that be true, the right investment at the right time can start to provide immediate income. Market headwinds can impede a company's momentum, even pushing its stock prices to 52-week lows, and that is precisely where I see an opportunity. A sharp turnaround could just be around the corner.

So, today, let us look at three Undervalued Dividend Kings primed to overturn the market and attract early investors, including myself.

How I Came Up With The Following Undervalued Dividend Kings

Using Barchart’s Stock Screener, I selected the following filters to get my list: 

• 14-Day Relative Strength Index: Less than 50%. RSI at >70% suggests the stock is overbought, and <30% is oversold. 50% is a sweet spot within the range
• Percent From Low:  Set to 10% above 1-year or 52-week low. It filters the stock near its yearly low point.
• Number of Analysts: 8 or more. The more analysts, the stronger the confidence rating.
• Current Analyst Rating: 3.5 (Moderate Buy) to 5 (Strong Buy).
• Watchlist: Dividend Kings.

After setting these filters, I reviewed the results and found three companies.

Then, I arranged the stocks based on their percent change, starting with:

Sysco Corp (SYY)

Sysco Corporation is the world’s leader in selling, marketing, and distributing food-related products to 730,000 customer locations through 340 distribution centers in over 90 different countries. The company is composed of four business groups: Broadline, Specialty Companies, International, and Sygma.

Sysco’s EPS for FY’2024 was $3.90, 11.7% higher compared to 2023. It pays a forward annual dividend of $2.16, translating to an annual yield of approximately 2.96%. 

The stock’s current price trades at $73.06, about 8.8% higher than its 52-week low of $67.12. A consensus among 17 analysts also rate SYY stock a “moderate buy.”

Colgate-Palmolive Company (CL)

The next undervalued Dividend King to buy is Colgate-Palmolive, which is also in the consumer staples sector, similar to P&G. Colgate-Palmolive has a presence in over 200 countries, offering products for oral care, skin health, personal care, home care, and pet nutrition. Some brands from the company that you have probably heard of are Colgate, Palmolive, Sanex, Irish Spring, and the like.

The company’s 2024 EPS came in at $3.51, 26.7% higher than the previous year. In terms of stock price, CL stock is up 7.7% from its 52-week low. And similar to the first two stocks I covered, a consensus among 21 analysts rate Colgate-Palmolive stock a moderate buy.

Colgate-Palmolive pays a forward annual dividend of $2.08, which translates to an approx. annual yield of 2.26%.

Procter and Gamble Company (PG)

The third and last company on this list of Dividend Kings to buy is Procter & Gamble, a leading provider of personal and home care products to millions of families and households. You may not know the company by name, but you’ve likely used its brands like Pampers, Tide, and Head & Shoulders, to name a few.

The company’s 2024 EPS came in at $6.59, 11.7% higher compared to the previous comparable year, amounting to $5.90. PG’s stock price is also up 7.1% from its 52-week low, and a consensus among 25 Analysts rate the stock a moderate buy.

Procter & Gamble pays a quarterly dividend of around $1.06, which translates to a yield of roughly 2.5%. The yield is certainly not the highest, but its upside potential is a key metric to watch.

Final Thoughts

These undervalued Dividend Kings offer stable income, and if you are in it for the long term, say 3, 5, or 10 years, they could be a great addition to your income portfolio. That said, it's always best to always stay on top of market headwinds and geopolitical risks as these events can affect even the most established companies.