Wall Street’s current fervent pursuit of technology stocks and artificial intelligence has caused some companies with solid dividends and outstanding dividend records to be overlooked by the market. For income-focused investors, Stanley Black & Decker (SWK) and McCormick (MKC), two stocks under price pressure, may be ideal candidates for building an income-oriented investment portfolio.
Industrial giant Stanley Black & Decker currently offers a dividend yield of approximately 3.7%, more than triple the average yield of the S&P 500 Index (approximately 1.1%). As a “Dividend King” with more than 50 consecutive years of dividend increases, the company primarily engages in tool manufacturing and fastener products, which are widely used across various construction sectors.
Previously, the company suffered from business bloat, high leverage, and a lack of portfolio focus due to rapid large-scale acquisitions. Management is actively adjusting its strategy by divesting assets, streamlining operations, and refocusing on its core tools business. Financial data show that the company’s net debt-to-adjusted EBITDA ratio has declined from 5.9x at the end of 2023 to 3.4x at the end of 2025, with a target of 2.5x by the end of 2026, significantly alleviating leverage concerns.
In terms of profitability, adjusted gross margins have continued to improve, approaching the target range of 35% to 37%. The company expects adjusted earnings per share of $4.90 to $5.70 in 2026, sufficient to cover the full-year dividend payout of $3.32 per share. Although the company’s fundamentals are back on track, Wall Street remains relatively cautious, presenting an entry opportunity for long-term dividend investors.
McCormick, the world’s leading spice producer, currently offers a dividend yield of approximately 3.7% as well, which is historically high for this well-known consumer staples company. The company has achieved 38 consecutive years of annual dividend increases while actively expanding its condiment business.
The market’s primary concern stems from the company’s planned acquisition of Unilever’s (UL) food business, which includes the Hellmann’s mayonnaise and Knorr brands. This transaction would roughly double the company’s size, carrying certain execution risks. However, McCormick has experience in merger integration, Unilever’s food business is operationally sound, and Unilever will retain an equity stake in McCormick, ensuring its active interest in facilitating a smooth completion of the transaction.
At a time when technology stocks dominate market enthusiasm, traditional companies like Stanley Black & Decker and McCormick are being overlooked by the market. Both stocks have long and stable dividend records and currently offer attractive valuations. Stanley Black & Decker is returning to a growth trajectory through deleveraging and margin improvement, while McCormick is expanding its business footprint through strategic acquisitions. For long-term dividend investors who are not afraid to position against the prevailing trend, these two undervalued stocks represent quality choices for an income-focused portfolio.
