The summer investing months are typically known for their sleepiness, with action picking up again in the final months to close out the year. But August is also a great time to do some portfolio review and maintenance.
As some may have experienced, the 20 most valuable chip stocks shed $1.3 trillion in value from July 24 to July 28, underscoring that portfolios can sometimes become too concentrated. Those owning Nvidia, Advanced Micro Devices, and Micron Technology during that chip sell-off may have seen their total portfolio quickly heading lower in value.
While there’s no such thing as a risk-free investment, Dividend Kings can help offer some portfolio protection, as well as provide diversification. For 50 or more consecutive years, those companies have increased their dividend payouts, no matter what the market throws at them or the state of the economy.
Three companies that have earned the Dividend King title are Stanley Black & Decker (SWK), Emerson Electric (EMR), and Illinois Tool Works (ITW).
Stanley Black & Decker
Over the past five years, Stanley Black & Decker’s stock price has dropped 47%, but it’s becoming a turnaround story. It has been cutting expenses since launching its Global Cost Reduction Program in mid-2022, which the company says has “generated approximately $2.1 billion of pre-tax run-rate savings.”
It’s also simplifying its operations. In 2020, Stanley purchased Consolidated Aerospace Manufacturing (CAM), a supplier of hardware for the aerospace and defense industries, for roughly $1.4 billion. But in April, it completed the sale of CAM to Howmet Aerospace for $1.8 billion. While not a financial windfall, it does help Stanley Black & Decker move on from an acquisition that may not have fit well with its business and was diverting attention, time, and money from stronger areas.
It’s also been putting its freed-up cash to good use, paying down $1.7 billion in the second quarter of 2026 and repurchasing $250 million in shares. In terms of paying dividends, it’s one of the most trustworthy companies on the market, having paid them for 149 consecutive years and increased its dividend payout for 58 consecutive years. As of this writing, Stanley Black & Decker’s dividend payout yields 3.2%.
Emerson Electric
Emerson is growing into a pick-and-shovel play in the artificial intelligence (AI) industry, offering the upside of that sector without some of the direct risks. Its hardware and software can be used in data centers to coordinate and monitor thermal, mechanical, and electrical subsystems, with real-time alerts if something is amiss.
In its fiscal 2026 third-quarter earnings report, Emerson reported sales of $4.9 billion, a slight increase from $4.6 billion in the prior-year period. But it also has an $8.2 billion backlog to convert from potential revenue into recorded revenue.
Emerson has raised its dividend continuously for the past 69 years, and the dividend currently yields 1.4%. Emerson is also providing a shareholder-friendly move through $1 billion in planned share repurchases for 2026.
Illinois Tool Works
The final company we’ll review has a rich history, launching in 1912 in Chicago after a small group of tool inventors came together to form Illinois Tool Works. Fast-forward to today, and it has a broad portfolio of components and equipment that serve industries ranging from the automotive to the food sector.
Of its seven segments, the top two in revenue for the second quarter of 2026 were its automotive and food equipment divisions, with sales of $857 million and $692 million, respectively. In total for the quarter, Illinois Tool Works reported $4.3 billion in revenue, a 7% increase.
This last Dividend King on the list has increased its dividend payout for 63 consecutive years, with the payout yielding 2.1%.
Adding a Dividend King to a portfolio
Of the three, I would give the edge to owning Stanley Black & Decker. It’s becoming a turnaround story, which has helped boost its stock price by 51% over the past 12 months. If it keeps executing and sending the stock price higher, paired with that 3.4% dividend yield, it offers the most favorable total return potential from the group for the foreseeable future.
That said, if it has any setbacks or missteps, those gains could quickly reverse. Risk-averse investors may want to considering looking more into Emerson Electric or Illinois Tool Works.
— Jack Delaney
Motley Fool Stock Advisor's average stock pick is up over 350%*, beating the market by an incredible 4-1 margin. Here’s what you get if you join up with us today: Two new stock recommendations each month. A short list of Best Buys Now. Stocks we feel present the most timely buying opportunity, so you know what to focus on today. There's so much more, including a membership-fee-back guarantee. New members can join today for only $99/year.
Source: The Motley Fool
