Should You Buy the 3 Highest-Yielding Dividend King Consumer Staples Stocks?

If you are a dividend lover, the Dividend King list is a great place to start your stock search. With at least 50 annual dividend increases, the companies on this list have proven they are resilient in the face of business adversity and market swings. But conservative investors can hone their search even more by focusing on consumer staples makers, a sector that tends to be resilient to market downturns.

Right now, the three highest-yielding consumer staples Dividend Kings are Universal (NYSE: UVV), Altria (NYSE: MO), and Hormel Foods (NYSE: HRL). But don't rush out and buy any of these stocks just yet, because a high yield alone isn't enough. Here's what you need to know about each of these dividend stocks before you buy.

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Hormel: The yield alone isn't the whole story

While dividend investors often look at yield first, it is important to consider other factors before buying a stock. Valuation is one such factor, but yield can help inform your decision here, too. For example, Hormel Foods has an attractive 4.7% yield. That's well above the market's tiny 1% yield and the roughly 2.1% yield offered by the average consumer staples stock. However, the real attraction with Hormel is that its five-year average yield is around 3.6%.

That suggests Hormel, which makes packaged food products with a focus on protein, is trading at a historically attractive valuation. In fact, the stocks' price-to-sale ratio and price-to-book ratio are both below their five-year averages. While the price-to-earnings ratio is above its longer-term average, that's because the company is working through a turnaround. But that turnaround is starting to show promise, with organic sales rising for six consecutive quarters.

The company isn't out of the woods yet, but it is moving in the right direction and still remains attractively priced. If you are a long-term investor looking for a high-yield stock, it is worth a deep dive.

Altria and Universal: More risk than you may realize

Altria's yield is 6.4%, with Universal's yield even higher at 7.4%. At first glance, you might think both are attractively valued. But Altria's five-year average yield is roughly 8.3%. Universal's five-year average yield is 6.8%. That hints that Altria may be more expensive than you think, and Universal relatively cheap.

Altria's P/S and P/E ratios are above their five-year averages, so the stock does look a bit expensive right now. Universal's P/S and P/B ratios are below their five-year averages, but its P/E is drastically above its five-year average because of a weak fiscal 2027 first quarter. But there's more to the story here, with Universal and Altria both suffering from a similar fundamental headwind.

That headwind is best highlighted by Alria's steadily declining cigarette volumes. Cigarettes account for the vast majority of the company's revenues, with its industry-leading Marlboro brand being its most important product. Overall, cigarette volumes dropped 2.8% year over year in the first half of 2026, with Marlboro off by 7.6%. That's just a continuation of a long downtrend, suggesting the company's business is fundamentally challenged.

Universal gets sucked into this story because its primary product is tobacco, which it sells to companies that make tobacco products like cigarettes. In order to justify buying and holding Altria and Universal over the long term, you would need to believe that their businesses are likely to shift back into growth mode. Current trends suggest it isn't likely, noting that Universal's trailing 12-month dividend payout ratio has risen to over 400%. While Altria's payout ratio is stronger, at around 90%, the ongoing decline in cigarette volumes isn't very encouraging from a fundamental point of view.

Hormel is the best of the bunch

When you look at stocks with high yields, there are often negatives that you have to consider. Altria and Universal face fundamental headwinds that are deeply troubling and should probably keep them off your buy list. Altria has the added negative of looking a bit expensive from a valuation perspective.

Hormel's headwinds, on the other hand, appear to be abating, as its turnaround efforts start to take hold. And its dividend yield remains relatively high compared to its own history, suggesting an attractive entry price. If you are a long-term dividend investor, Hormel is probably worth adding to your buy list, especially since protein is currently a hot consumer trend.

Reuben Gregg Brewer has positions in Hormel Foods. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.