The stock market has had a great run in 2023. But investors that regularly contribute savings to their accounts may be thinking that now is a good time to deploy new capital toward safer investments.

One option worth considering is Dividend Kings, meaning companies that have paid and raised their dividends for at least 50 years. Dividend Kings have long endured market cycles. So if you're worried about a correction in the stock market or you're simply on the prowl for lower-risk options, Dividend Kings make a lot of sense.

Two Dividend Kings that stand out are Illinois Tool Works (ITW 0.35%) and Stanley Black & Decker (SWK -0.43%) Meanwhile, Leggett & Platt (LEG 1.27%) is a lesser-known high-yield dividend stock that's worth a look. 

Sparks fly off of a circular saw in a factory.

Image source: Getty Images.

One of the highest-quality industrial stocks on the market

Daniel Foelber (Illinois Tool Works): After suffering a sizable sell-off in May, Illinois Tool Works, commonly known as ITW, rocketed higher in June and July and just reached a new all-time high. The industrial product and equipment manufacturer continues to prove why quality matters in the stock market.

The difference between top companies like ITW and other industrial stocks is that ITW has an impeccable track record of efficiency improvements, margin growth, dividend increases, and share repurchases. It may not be the most glamorous company, but it's extremely good at what it does, which is no easy feat.

ITW operates in seven key segments: automotive, construction, food, polymers and fluids, specialty products, test and measurement electronics, and welding. These segments each have their own unique challenges and opportunities. The dream of every industrial conglomerate is to have business units that operate efficiently on their own but also round each other out, effectively diversifying the business and making it more resistant to market cycles. ITW is a textbook example of this strategy executed to perfection.

ITW Operating Margin (TTM) Chart

ITW Operating Margin (TTM) data by YCharts

No single business unit is so big that it makes or breaks the company. Additionally, each business unit sports individually high operating margins, making ITW balanced.

While it's hard to poke holes in ITW the business, it's easy to look at the stock around an all-time high and pass in favor of other opportunities. ITW isn't cheap, and is trading at the high end of its historical valuation.

ITW PE Ratio Chart

ITW PE Ratio data by YCharts

It also doesn't have a particularly high dividend yield at just 2.1%, but that's a result of ITW's dividend growth failing to keep pace with the stock price's growth rate, and not a failure of ITW to routinely raise dividends.

With ITW, an investor is avoiding the bargain bin and buying a well-known quality stock -- albeit at a premium price. This strategy isn't for everyone. But if you're an investor that isn't looking for outsized gains and is more focused on stability, ITW is definitely worth a look, even at an all-time high.

A stock for patient investors

Lee Samaha (Stanley Black & Decker): If you can close your eyes and ears to potentially lousy news while focusing on the long-term, then Stanley Black & Decker stock might be for you. 

It's no secret that the company faces ongoing challenges in 2023. There's a natural correction in growth play in the DIY tools market as it comes up against tough comparisons with the boom in home-related sales caused by the stay-at-home measures imposed at the height of COVID. In addition, rising interest rates are curbing consumer discretionary spending, particularly on the home, as house prices come under pressure. 

As such, the company's focus in 2023 is mainly on reducing its bloated inventory and carrying out its long-needed restructuring plan. As a reminder, the plan aims to cut sales, general, and administrative expenses by $500 million by the end of 2023. In addition, management plans to transform its supply chain, resulting in $1.5 billion in cost cuts by 2025. The result is $2 billion taken out of annual costs by 2025.

The good news is the company's CFO recently told investors that the inventory reduction and restructuring plans are on track. 

That said, it's obviously a dynamic situation, and it's tough to predict where the next move in interest rates will be, or what its impact on DIY spending will be. Stanley Black & Decker may well disappoint investors in 2023. However, if the restructuring plans come to fruition and the housing market recovers -- as it usually does after the rate hiking cycle is finished -- Stanley could be a much more profitable company in a few years. On that basis, it's a good stock to buy for income-seeing investors looking to enjoy its 3.2% dividend yield.

Legget & Platt is dedicated to making customers comfortable and rewarding shareholders

Scott Levine (Leggett & Platt): Fairly new to wearing the Dividend King crown, Leggett & Platt has been hiking its payout higher for the past 51 consecutive years. Don't let this half of century returning capital to shareholders fool you, though -- the company's history actually stretches much further back. In business for 140 years, Leggett & Platt has grown into a diversified manufacturer, focusing on products that make people's lives more comfortable, including (but not limited to) bedding components, automotive seat systems, and flooring. And income investors will take comfort in knowing that they can grab this 6.3% forward-yielding stock at a bargain-bin price.

When perusing possible high-yield stocks, seasoned investors recognize the necessity of ensuring the stability of the company's underlying business. After all, a high-yield dividend means nothing if the company has to reduce it -- or even suspend it altogether -- because management hasn't planned accordingly with the company's finances. With regards to Leggett & Platt, the company's conservative payout ratio should help to allay circumspect investors' concerns. Over the past 10 years, Leggett & Platt has averaged a 68% payout ratio.

Another encouraging sign is the company's consistent generation of strong free cash flow per share that exceeds the dividend and suggests that the company has further room to hike the dividend in the future. Like the reasonable payout ratio, this also illustrates how the company isn't jeopardizing the company's financial health to placate investors.

With the stock currently changing hands at 8.1 times operating cash flow -- a discount to its five-year average cash flow multiple of 11.9 -- those looking to procure prodigious passive income have the opportunity to grab Leggett & Platt's stock without having to pay an arm and a leg for it.