These 2 Under-the-Radar Dividend Kings Just Declared Dividend Raises

MZTI -0.11% ADP +0.38%

Key Points

• Happily for income investors, there's still time to take advantage of both.

• One came from a highly specialized financial services company, the other from a veteran food business.

• 10 stocks we like better than Automatic Data Processing ›

The list of Dividend Kings -- stocks that have declared dividend raises at least once annually for a minimum of 50 years running -- is stuffed with familiar names. Not every company in that most regal lineup is famous, however, and there are several that regularly hike their payouts without much notice.

In recent days, two of those subtle superstars -- Automatic Data Processing (NASDAQ: ADP) and Marzetti (NASDAQ: MZTI) -- announced their latest dividend raises. Here's a bit more about both these businesses for those who may not be acquainted, along with the pertinent details of their new hikes.

1. ADP

ADP is one of the more recent Dividend Kings, as it crossed the 50-year barrier in 2024. It extended this streak to 51 in mid-November, when it increased its quarterly payout by a fairly generous 10% to $1.70 per share.

ADP operates in the finance sector and is a leading provider of employer solutions, best known for its payroll and human resources services. There are a dizzying number of businesses, of every type and size, in this country. ADP is a long-standing company that has been delivering the goods for scores of them. More than a few have been clients for many years.

Given its history, prominence, and size, ADP is not a high-growth company. It is, however, a highly and reliably profitable one, with high net income according to generally accepted accounting principles (GAAP) margins. Over the last five fiscal years, said margins have landed in a narrow band between 17% and 20%. What's more, both revenue and net profit have risen in each of those years.

So far, it appears that the current 12-month stretch will produce more of the same. ADP's first quarter of fiscal 2026, reported at the end of October, saw the company boost revenue by 7% year over year to $5.2 billion, with GAAP net income moving 6% higher to $1 billion.

Companies with that kind of sustained profitability are rare. That tendency, combined with a dividend yield that's well above the average of 1.2% of all S&P 500 (SNPINDEX: ^GSPC) component stocks, makes ADP a solid and reliable income stock.

ADP's upcoming payout will be dispensed on Jan. 1, 2026, to investors of record as of Dec. 12. At the most recent closing stock price, it would yield 2.7%.

2. Marzetti

It's safe to say that Marzetti is even less of a household name than ADP. Yet it's a good bet that millions of Americans have consumed its wares. It's a food products supplier that has a portfolio of comestibles brands, and provides products like dressings and sauces to popular restaurant chains such as Arby's and Chick-fil-A.

Dining out is a significant activity in the U.S., and Marzetti has a well-established niche in the restaurant supply segment. Like ADP, it's a relatively slow grower, but consistently produces bottom-line profits. It also likes sharing its wealth; in mid-November, for the 63rd consecutive year, it declared a dividend increase. The quarterly disbursement is getting a 5% bump to an even $1 per share.

And why not? Marzetti's first-quarter 2026 results, unveiled at the start of that month, boasted a nearly 6% rise in net sales to over $493 million.

Much of that growth came from the food service segment -- the one that supplies those restaurants -- which saw a net sales boost of 8% (to almost $246 million). The second of the two reporting segments, retail, advanced by nearly 4% to $248 million. As for GAAP net income, yes, that increased too -- by almost 6%, to land a bit north of $47 million.

I find Marzetti's structure and strategy to be quite appealing. The two segments are almost exactly even in terms of sales, so that if there's a pullback in restaurant spending from consumers preferring to eat at home, the retail segment can theoretically mitigate this. It's an approach that has been proven to work for Marzetti, year after year, through many economic peaks and valleys.

That raised dividend is to be paid on Dec. 31 to stockholders of record as of Dec. 5. It yields a theoretical 2.4% on the current share price.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

These 2 Under-the-Radar Dividend Kings Just Declared Dividend Raises was originally published by The Motley Fool