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2 Dividend Stocks to Buy on Sale

By Jennifer Saibil – Oct 5, 2021 at 9:45AM

Key Points

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These high-yielding dividend stocks offer stability when the market is volatile.

Investors may be worried as the market enters another round of volatility. But that's par for the course in the stock market, and investors should sit tight and ride it out. There's bound to be better times and worse times, but historically, the broader market has always recovered from downticks and come out on top.

In the meantime, one of the safest ways to grow your money in any type of environment is through dividend stocks. They provide income as long as you own shares, and dividends can really add up, giving investors a cushion when stock prices are falling.

Lower prices mean a higher dividend yield and more bang for your buck. You can buy some great dividend stocks on sale now, such as Kimberly Clark (KMB 0.71%) and Altria Group (MO 0.92%).

A child sitting in a wheelchair blowing their nose with a tissue as a nurse sits by.

Image source: Getty Images.

A steady and high-yielding dividend

Kimberly Clark makes home hygiene products such as Kleenex tissues and Scott paper towels. That's why it's about as stable as you can get and its growth is generally low. But as an established cash generator, it's also committed to a high dividend.

2020 was a monster year for the company as people stocked up on home essentials, but it's feeling the crunch in 2021 as it faces tough comps year over year. Sales increased 2% in the second quarter, but organic sales, or sales from existing brands, decreased 3%.

Management began a restructuring program in 2018 to trim the product line and become more efficient. In the short term, that's cutting into the bottom line. But Kimberly Clark should ultimately emerge as a stronger company, and investors should expect many years of healthy dividend growth.

The share price has declined 7% over the past year, and the dividend yields 3.3% at the current price after it was raised in June to a quarterly payment of $1.14. Kimberly Clark has raised its dividend for 49 consecutive years and will become a Dividend King when it raises it next for for the 50th consecutive time.

A person holding a smartphone and an e-cigarette.

Image source: Getty Images.

Rebounding into new ventures

You might know Altria Group better by the brands it produces -- cigarettes such as Marlboro, under the Philip Morris USA umbrella. 

The company has been in decline for several years as it grapples with regulations and public sentiment toward its products. But it's changed course, investing in e-cigarettes and other ventures.

Its new mission is "moving beyond smoking," and it's working toward a smoke-free choices for adults. Altria has recently acquired a 35% stake in JUUL Labs, the leading e-cigarette product company, and a 45% stake in Cronos Group, a Canadian cannabis maker. It also owns 10% of beer-maker Anheuser-Busch.

Altria Group stock lost 22% over the past five years but has gained 27% over the past year. It's still well below all-time highs, and its dividend yields 7.14% at the current price. That's a high yield from a stock that also has growth potential.

Altria Group comes with a significant dose of risk as it branches out of its main product line into new businesses, but recently, it's showing signs of progress, such as a 9% increase in sales year over year in the second quarter. If you're looking for high-yielding dividend stocks, you might want to consider this Dividend King, which has raised its dividend annually for the past 52 years.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool recommends Anheuser-Busch InBev NV. The Motley Fool has a disclosure policy.

Stocks Mentioned

Altria Group Stock Quote
Altria Group
MO
$47.01 (0.92%) $0.43
Kimberly-Clark Stock Quote
Kimberly-Clark
KMB
$136.60 (0.71%) $0.97

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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