3 Dividend Stocks to Double Up on Right Now

Even the most iconic brands encounter rough patches, and right now, a few with long-standing dividend legacies are doing just that. These companies have been pillars of the American business landscape for generations, and their management teams have long been committed to returning capital to shareholders.

Although recent challenges have weighed on their stock prices, their brands continue demonstrating staying power, offering investors a chance to pick up blue chip stocks at more attractive valuations. Here are three that stand out.

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1. Kontoor Brands

Investors may not be familiar with parent company Kontoor Brands (NYSE: KTB), but you would undoubtedly know its subsidiaries, Wrangler and Lee. Kontoor was spun off from VF Corporation in 2019 and has raised its dividend each year since 2021. Currently, the company pays a quarterly dividend of $0.52 per share, translating to a higher-than-average annual yield of 2.9%.

For any dividend-paying stock, it's important to look at its payout ratio -- the percentage of earnings paid out as dividends -- to see whether the company can continue to afford to pay and, hopefully, grow the cash distribution to shareholders. Generally, a payout ratio below 75% is considered safe, so with Kontoor Brands' payout ratio of 49%, investors should feel confident in the company's dividend.

Kontoor Brands' stock has struggled as of late partly because the company reported revenue of $623 million and operating income of $73.3 million in the first quarter of 2025, representing a year-over-year decline of 1% and 13%, respectively.

Additionally, the company announced a $900 million acquisition of outdoor workwear brand Helly Hansen -- $700 million of it funded with debt -- which is expected to more than double the company's leverage ratio from 1.6 to 3 times trailing 12-months' earnings before interest, taxes, depreciation, and amortization (EBITDA).

Meanwhile, global sourcing leaves Kontoor vulnerable to new tariffs, with management projecting a $50 million hit to operating income this year.

Despite recent concerns, management remains optimistic, expecting to reduce debt to a more manageable 1 to 2 times EBITDA by the end of 2025. For the full year, it projects revenue of $3.06 billion to $3.09 billion -- up 17% to 19% from 2024 -- and adjusted earnings per share (EPS) of $5.40 to $5.50, which would amount to a 10% to 12% increase from 2024. With that outlook, the stock trades at a modest valuation of only 13.5 times forward earnings.

KTB PE Ratio (Forward) data by YCharts.

2. Nike

Nike (NYSE: NKE), the world's leading shoe and apparel brand, has been a tough fit for investors lately. As of this writing, its stock is down 19% in 2025 and more than 65% from its 2021 peak.

Nike's recent struggles stem from several factors. The company reported a 9% sales drop during the holiday season quarter to $11.3 billion, including a 17% decrease in China. Also, management expects higher tariffs on imports from China and Mexico to weigh gross margins by approximately 4% to 5%.

Despite recent challenges, Nike has remained committed to returning capital to shareholders. The company has raised its dividend for 24 consecutive years and currently pays a quarterly dividend of $0.40 per share, yielding around 2.6%. With a payout ratio of 50%, management retains flexibility for future increases. At the same time, Nike has taken advantage of its lower stock price to repurchase shares, reducing its share count by 6% over the past three years.

Image source: Nike.

There are reasons for optimism about Nike's turnaround. After facing headwinds with its direct-to-consumer strategy, management is shifting focus back to key wholesale partners like Dick's Sporting Goods to regain momentum.

While the recovery may take time, Nike's strong balance sheet -- including $835 million in net cash -- gives it the cushion to weather short-term challenges. In the meantime, investors collect a growing dividend while owning one of the world's most iconic brands, now trading at just 20 times trailing earnings -- a valuation not seen that low in five years.

NKE Shares Outstanding data by YCharts.

3. The Walt Disney Company

After a challenging stretch, The Walt Disney Company (NYSE: DIS) brought back its semi-annual dividend in early 2024 -- a move that signals growing confidence from management. The dividend had been suspended during the pandemic back when the stock traded 45% higher than it does today. Now, Disney pays $0.50 per share twice a year, which amounts to a 0.9% annual yield and a payout ratio of about 19%.

Unlike the other two stocks, Disney has been growing revenue and earnings of late. Led by its growing experiences and entertainment segments, the media giant generated $23.6 billion in revenue and $4.9 billion in free cash flow for its fiscal 2025's second quarter, representing a year-over-year increase of 7% and 103%, respectively.

With the return to growth, Disney increased its dividend, lowered its net debt by 11% to $37 billion, and reduced its shares outstanding by 1% over the past year. Additionally, Disney management plans to spend another $2 billion on share repurchases over the coming two quarters.

Looking ahead, management is optimistic about the remainder of fiscal 2025. It expects operating income in the entertainment segment to increase between 6% and 8%, and total entertainment revenue to grow by double digits -- both compared to full-year fiscal 2024.

As for Disney's valuation, the stock trades at 18.6 times trailing free cash flow, significantly below its three-year median of 33.6, suggesting the stock is underpriced.

DIS Price to Free Cash Flow data by YCharts.

Are these dividend stocks buys?

These three companies have faced recent struggles, which their lagging stock prices reflect. Still, these stocks offer exposure to high-quality, well-established brands that have weathered tough times before. For long-term investors, these setbacks present an opportunity to initiate positions or double down in resilient, time-tested brands -- and you'll receive a dividend as you wait for their turnarounds.

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Collin Brantmeyer has positions in Nike and Walt Disney. The Motley Fool has positions in and recommends Nike and Walt Disney. The Motley Fool recommends Kontoor Brands. The Motley Fool has a disclosure policy.