Two Dividend King Stocks to Buy Now.

There's an old adage on Wall Street: the best time to buy is when there's blood on the streets. This may seem a bit 耑 for most investors, but the point is that you can often find the best deals on stocks that other investors are afraid of.

Now.Stanley Black & Decker, Inc.(math.) genus(New York Stock Exchange: SWK)respond in singingBrighton Hillfirms(Black) Hills(math.) genusNew York Stock Exchange Stock Code: BKHThe fact that these two historically cheap dividend kings are not favored is why you might want to take a closer look at them.

1. Stanley Head Resonance shares plunge

"Fallen angel" is an investment term for a once-favorite stock that has seen its share price plummet as a result of distress. shares of Stanley Black & Decker have fallen more than 55% since hitting their highs in 2021, and it looks like they've lost their wings. There's a reason for that: adjusted earnings hit an all-time high of $10.48 per share in 2021, then quickly fell to $4.62 in 2022 and $1.45 in 2023.

There are several reasons for this outcome, including debt acquisitions that have resulted in a bloated and inefficient business for the iconic tool maker. Koon's management has been trying to sell assets, streamline operations, cut costs and pay down debt to get back on its feet. But the "King of Dividends" has stuck to its dividend promise, which is to increase dividends moderately each year despite the decline in Koon's earnings. This commitment, coupled with the sharp drop in share price, has brought the company's dividend yield to a historically attractive 3.5%.

The best part of the story is that the industrial company's efforts to turn the tide seem to be paying off. For example, Stanley Bruckner-Dyer has improved its profit margins over the last year. Gruen now expects adjusted earnings to turn around again in 2024, to between $3.50 and $4.50 per share.

Stanley Black & Decker has had a tough two years, and the company still has a lot to prove. But if it can get its earnings moving in the right direction again, Wall Street will likely value the stock higher. If you can stand to own a stock that's turned a loss into a profit, now's the time to dig deeper.

2. High interest rates will become a problem for Montenegrin companies.

Black Hills is a relatively small electric and natural gas utility serving 1.3 million customers in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and parts of Wyoming. Being only a boring (Koon) utility, the company's business is not exciting. However, it has been able to increase its dividend every year for more than 50 years, so boring can be attractive if you like stability. Currently, Black Hills' yield is near its highest level in a decade, at about 5%.

Its problems are fundamental to the utility business model. The operation of power plants and natural gas distribution systems is a capital-intensive business, and companies like Montenegro typically make heavy use of debt financing. Regulated operations provide reliable cash flow, so the risk of unreasonable leverage is not particularly high. However, rising interest rates lead to rising costs; debt rolls over to higher interest rates, and there is no way around it. This is exactly the problem that Montenegro is facing, and investors have already sold their shares, as well as the entire utility industry.

Despite this, the regulator ultimately takes higher rates into account when approving capital investment projects and utility rates. So, over time, Montenegro's business will adjust accordingly. In the meantime, long-term investors have the opportunity to buy into a boring but reliable dividend king of a company with historically high yields. It's worth noting that Montenegro's customer growth in its service area is nearly three times the rate of growth of the U.S. population. That's good for strong long-term business performance and more dividend growth.

These opportunities won't last forever.

Of these two "dividend king" companies, Stanley Hed Resonance has the bigger near-term catalyst. If you wait too long, you may miss the opportunity to buy while it looks historically cheap.Black Hills could be a long-term story, as interest rate adjustments take time to complete. But even in that case, now is the time to start digging deeper, as the stock remains moribund and yields are at all-time highs.

Should you invest $1,000 in Montenegro now?

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Reuben Gregg Brewer owns shares of Black Hills and Stanley Black & Decker. the Motley Fool does not own any of these shares. the Motley Fool has a disclosure policy.

Two Incredibly Cheap Dividend King Stocks to Buy Now was originally published by The Motley Fool.