U.S. Markets closed

15 Dividend Kings for Decades of Dividend Growth

Dan Burrows, Contributing Writer, Kiplinger.com

Getty Images


You might start to hear more about the "Dividend Kings" over the next few months. Small wonder: Stocks that have boasted uninterrupted dividend growth for a half-century or more might be an ideal place to hide out amid market panic and heightened economic uncertainty.

The longest bull market in U.S. history came to an abrupt end on Feb. 19 when the COVID-19 outbreak caused stocks to collapse. The S&P 500 lost 30% in only one month of trading. That has some market strategists banging the drum for quality stocks with defensive attributes.

And nothing says quality more than stocks that haven't missed a dividend hike in decades.

"For us, it is vitally important not only that a company can pay its dividends today, but that it can grow its dividends tomorrow," says Tony DeSpirito, head of BlackRock's U.S. Income and Value team.

"We base our judgement on cash flow - what is left for the shareholder when all a company's other commitments have been paid. Good cash flow means the management team has been disciplined and the company is likely to have competitive resilience."

Investors can find such dividend machines within the ranks of the Dividend Kings. You've surely heard of the Dividend Aristocrats - companies in Standard & Poor's 500-stock index that have raised their payouts every year for a minimum of 25 consecutive years. The Dividend Kings are Aristocrats that have done it for at least 50.

Here, then, are the current 15 Dividend Kings. These have been among the best of the best dividend stocks for income growth since at least the late 1960s. Any company with that kind of track record clearly makes its dividend a top priority - and one that investors can count on through thick and thin.

SEE ALSO: Every Warren Buffett Stock Ranked: The Berkshire Hathaway Portfolio

Hormel

Getty Images


Market value: $24.1 billion

Dividend yield: 2.1%

Consecutive annual dividend increases: 54

Analysts' opinion: 0 strong buy, 1 buy, 7 hold, 3 sell, 1 strong sell

Hormel (HRL, $44.85) is about as reliable as an income payer gets. The packaged food company best known for Spam - but also responsible for Hormel-brand chili and meats, Dinty Moore stews and House of Tsang sauces - has raised its annual payout every year for more than five decades.

Indeed, Hormel announced a 54th straight year of dividend increases in November. And its upcoming May payout will mark the company's 367th consecutive quarterly dividend.

Hormel is rightly proud to note that it has paid a regular quarterly dividend without interruption since becoming a public company in 1928. Even before it was a mature business, HRL made the payout a top priority.

Like the shares of many consumer staples companies, HRL has held up comparatively well since the market peaked on Feb. 19. This Dividend King is off about 10% vs. a drop of 34% for the benchmark S&P 500. And analysts are bullish on Hormel's longer-term prospects, expecting profits to expand by an average of 4% annually over the next three to five years.

SEE ALSO: 25 Dividend Stocks the Analysts Love the Most

Dover


Market value: $10.8 billion

Dividend yield: 2.6%

Consecutive annual dividend increases: 64

Analysts' opinion: 5 strong buy, 4 buy, 8 hold, 0 sell, 0 strong sell

Industrial conglomerate Dover (DOV, $74.74) logged its 64th consecutive year of dividend increases with a modest hike, maintaining its place among Dividend Kings. In August, DOV upped the ante by 2.1%, to 49 cents per share from 48 cents per share.

The company, which has its hands in all sorts of industries - from Dover-branded pumps, lifts and productivity tools for the energy business, to Anthony-branded commercial refrigerator and freezer doors - has always made the dividend No. 1. Its annual streak of dividend growth is the third-longest among publicly traded companies.

Dover doesn't have the most exciting business, though it did garner some headlines in 2018. Under pressure from activist investor Daniel Loeb's Third Point hedge fund, Dover spun off its upstream energy business. Known as Apergy (APY), the spinoff began trading on the New York Stock Exchange in May 2018.

As for Dover, analysts project average annual earnings growth of nearly 11% during the next three to five years.

SEE ALSO: 16 Stocks Warren Buffett Is Buying and Selling

Lowe's

Getty Images


Market value: $59.3 billion

Dividend yield: 2.9%

Consecutive annual dividend increases: 57

Analysts' opinion: 16 strong buy, 7 buy, 9 hold, 0 sell, 0 strong sell

Lowe's (LOW, $77.30) has paid a dividend every quarter since going public in 1961, and that cash distribution has increased annually for more than half a century. Most recently, in August, Lowe's lifted its quarterly payout to 55 cents a share from 48 cents a share to keep up its Dividend Kings membership. That's an improvement of almost 15%. Rival Home Depot (HD) has paid dividends for a long time, too, but its streak of payout growth dates back only to 2010.

Goldman Sachs recently downgraded LOW to Buy from Conviction Buy, citing the company's lack of an e-commerce platform amid the coronavirus outbreak. Lowe's is currently moving its e-commerce platform to the cloud, so it's not operating at full capacity.

The pros expect Lowe's to deliver average annual earnings growth of 15.5% for the next three to five years, according to S&P Global Market Intelligence.

SEE ALSO: 25 Dividend Stocks That Analysts Love the Most

Colgate-Palmolive

Getty Images


Market value: $52.3 billion

Dividend yield: 2.9%

Consecutive annual dividend increases: 57

Analysts' opinion: 6 strong buy, 4 buy, 10 hold, 1 sell, 1 strong sell

Colgate-Palmolive (CL, $61.18) sells staples ranging from toothpaste to dish detergent, and thus demand for its products tends to remain stable in good and bad economies alike.

The company derives the vast majority of its sales outside the U.S., and that has been a problem of late. A stronger dollar, stagnant demand in key overseas markets and higher input costs had been weighing on Colgate's results. CL has offset some of the pain by raising prices, although costs remain a headwind.

Colgate also is turning to M&A to improve its fates, announcing in July that it would acquire French skin brand Laboratories Filorga Cosmétiques for $1.69 billion - its biggest M&A move since purchasing Kolynos in 1995. Bank of America's Olivia Tong thinks the move sets up Colgate to grab its piece of the fast-growing premium skincare market.

Despite its issues, CL stock has outperformed the S&P 500 since the market topped in February.

And then there's the dividend. Colgate's payout dates back more than a century, to 1895, and has increased annually for 57 years. CL last raised its quarterly disbursement in March, when it added a penny to bring the payout to 44 cents a share. The dividend should keep going up. After all, the company has been through tougher times than this.

SEE ALSO: The Best and Worst Presidents (According to the Stock Market)

Procter & Gamble

Getty Images


Market value: $255.0 billion

Dividend yield: 2.9%

Consecutive annual dividend increases: 63

Analysts' opinion: 7 strong buy, 4 buy, 12 hold, 0 sell, 0 strong sell

With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG, $103.27) is among the world's largest consumer products companies and among the most recognizable Dividend Kings. It also has enviable defensive characteristics at a time when markets are reeling. Demand for products such as toilet paper, toothpaste and soap tends to remain stable in both good times and bad.

That hardly makes P&G completely recession-proof, but it has helped fuel reliable dividend payments for more than a century. The Dow component has paid shareholders since 1890, and has raised its cash distribution annually for 63 years in a row. P&G last increased its quarterly payout in April 2019, by 4% to 74.59 cents per share.

In addition to the generous dividend, analysts expect PG to generate average annual earnings growth of 7.1% for the next three to five years. Deutsche Bank upgraded the stock in mid-March to Buy from Hold, noting that it is "attractively defensive" in an uncertain market.

SEE ALSO: 11 Great Stocks to Buy and Hold for the Next Decade

Stanley Black & Decker

Getty Images


Market value: $13.9 billion

Dividend yield: 3.1%

Consecutive annual dividend increases: 52

Analysts' opinion: 9 strong buy, 4 buy, 8 hold, 0 sell, 0 strong sell

Power and hand toolmaker Stanley Black & Decker (SWK, $90.27) has paid a dividend for 143 years on an uninterrupted basis, and has increased it annually for more than half a century. Most recently, in July, SWK lifted the quarterly payout to 69 cents per share, up from 66 cents.

But this isn't just some sleepy income stock. Analysts expect SWK to generate average annual earnings growth of 8.3% a year over the next three to five years, thanks not just to cost cuts, but a strategy of growth through mergers & acquisitions (M&A).

Stanley Black & Decker bought Newell Tools from Newell Brands (NWL) for $2 billion in 2016. In January 2017, it negotiated the purchase of Craftsman tools from Sears Holdings (SHLDQ) for a total of $775 million over three years and a percentage of annual sales. Two years ago SWK announced the acquisition of IES Attachments for $690 million cash, as well as the $440 million purchase of Nelson Fastener Systems. And in early 2020, the company acquired Consolidated Aerospace Manufacturing for $1.5 billion.

SEE ALSO: All 30 Dow Stocks Ranked: The Analysts Weigh In

Cincinnati Financial

Getty Images


Market value: $12.6 billion

Dividend yield: 3.1%

Consecutive annual dividend increases: 60

Analysts' opinion: 1 strong buy, 1 buy, 4 hold, 1 sell, 1 strong sell

As Cincinnati Financial (CINF, $78.02) likes to point out, insurance companies are generally regarded as conservative, long-term investments. That certainly has been the case with CINF, which has one of the longest dividend-growth streaks among the Dividend Kings. Indeed, the property and casualty insurer in January lifted its payout for a 60th consecutive year. Its quarterly dividend increased 7.1% to 60 cents a share from 56 cents a share.

Income investors can expect more where that came from.

Although we're still in the early days of the COVID-19 pandemic, Janney Montgomery Scott says, "the coronavirus will likely have some impact on claims, but we expect the impact will be manageable for the insurance industry."

The analyst community as a whole expects Cincinnati Financial's average annual profits to fall at a rate of 5.5% over the next three to five years, according to data from S&P Global Market Intelligence. Earnings are being weighted down by accounting rule changes that require unrealized investment gains and losses to be recognized as part of net income instead of on the balance sheet. Although the bottom line if forecast to decline, that shouldn't impair CINF's ability to keep its dividend streak alive.

SEE ALSO: Apple Stock: The Dividend Investor's Guide

Illinois Tool Works

Getty Images


Market value: $43.9 billion

Dividend yield: 3.1%

Consecutive annual dividend increases: 56

Analysts' opinion: 3 strong buy, 0 buy, 14 hold, 2 sell, 3 strong sell

Founded in 1912, Illinois Tool Works (ITW, $137.70) is as "old economy" as it gets. The industrial company makes construction products, car parts, restaurant equipment and more.

While ITW sells many products under the namesake brand, it also operates businesses including Foster Refrigerators, ACME Packaging Systems and the Wolf Range Company.

Like many companies of a bygone era, ITW is serious about dividend growth, having dedicated 35% to 40% of its operating cash flow to dividends since 2013. In August, Illinois Tool Works raised its quarterly dividend 7% to $1.07 a share, improving its dividend-growth streak to 56 straight years.

Just note that Wall Street isn't particularly too hot on this "kingly" Dividend Aristocrat at the moment. Sell calls are rare on Wall Street and yet ITW has two Sells and three Strong Sells. Analysts' average rating comes to Hold, according to S&P Global Market Intelligence.

SEE ALSO: The 9 Highest-Yielding Warren Buffett Dividend Stocks

Johnson & Johnson

Getty Images


Market value: $314.2 billion

Dividend yield: 3.2%

Consecutive annual dividend increases: 57

Analysts' opinion: 8 strong buy, 6 buy, 6 hold, 0 sell, 0 strong sell

Johnson & Johnson (JNJ, $119.18), founded in 1886 and public since 1944, operates in several different segments of the health-care industry. In addition to pharmaceuticals, it makes over-the-counter consumer products such as Band-Aids, Neosporin and Listerine. It also manufactures medical devices used in surgery.

The Dow component's sprawling health-care operations are helping to limit JNJ stock's losses in the selloff. That hardly means the company is immune from COVID-19 fallout. Credit Suisse, which rates shares at Outperform, cut its earnings estimates to reflect "the potential impact on deferred procedures, other procedures which are less deferrable, capital equipment and flu care and diagnostics business lines."

However, coronavirus shouldn't affect those who count on JNJ's steady dividends over the long term. The company has contended with worse calamities in its long history and kept its payout intact.

Indeed, the health-care giant hiked its quarterly payout 5.6% in April 2019, to 95 cents a share. That extended its streak of consecutive annual dividend increases to 57, keeping it among the ranks of the Dividend Kings. The streak should continue, too, if JNJ can keep growing its earnings; analysts expect it to, at a clip of 7.1% annually on average over the next half-decade.

SEE ALSO: Where Millionaires Live in America 2019

Coca Cola

Getty Images


Market value: $169.4 billion

Dividend yield: 4.2%

Consecutive annual dividend increases: 58

Analysts' opinion: 11 strong buy, 5 buy, 7 hold, 0 sell, 0 strong sell

Coca-Cola (KO, $39.45) has long been known for quenching consumers' thirst, but it's equally effective at quenching investors' thirst for income. The company has paid a quarterly dividend since 1920, and that dividend has increased annually for the past 58 years.

KO last lifted its dividend in February, when it declared a quarterly payout of 41 cents a share, up from 40 cents a share. The relentlessly rising dividend is one reason Coca-Cola finds itself among the best stocks of all time.

With the U.S. market for carbonated beverages on the decline for more than a decade, Coca-Cola has responded by adding bottled water, fruit juices and teas to its product lineup to keep the cash flowing. In addition to the namesake Coca-Cola brand, KO also sports names such as Minute Maid, Powerade, Simply Orange and Vitaminwater.

Coca-Cola added another big name to its roster not too long ago: In January 2019, it completed the acquisition of Costa Limited, which owns the popular Costa Coffee brand that operates in more than 30 countries.

SEE ALSO: 6 Best Health Care Funds for a Volatile Market

MMM

Getty Images


Market value: $76.4 billion

Dividend yield: 4.4%

Consecutive annual dividend increases: 62

Analysts' opinion: 2 strong buy, 2 buy, 13 hold, 1 sell, 1 strong sell

Industrial conglomerate 3M (MMM, $132.72), which makes everything from adhesives to electric circuits to tape, finds itself in a critical position during the coronavirus outbreak The company is making N95 masks as fast as it can to replenish dangerously low stocks at hospitals and other points of care.

3M is one of the longest-tenured dividend kings, boasting a quarterly dividend that has existed for more than a century. And 3M has increased that cash distribution annually for 62 consecutive years.

The company last raised its dividend in February, when it lifted the quarterly disbursement by 2% to $1.47 a share. During the past decade, 3M has returned $57 billion to shareholders through a combination of dividends and share repurchases, or 121% of reported net income, the company said in a press release.

The steady stream of cash has helped 3M earn the distinction of being one of the 50 best stocks of all time - even if shares have lagged the market by a wide margin over the past two years. The U.S. trade war with China, as well as softness in the automotive and consumer electronics sectors, has been punishing MMM's results.

Whatever the shorter-term holds for 3M's share price, investors can bank on the conglomerate's steady payouts over the long haul.

SEE ALSO: Hedge Funds' 25 Favorite Blue-Chip Stocks

Emerson Electric

Getty Images


Market value: $27.1 billion

Dividend yield: 4.5%

Consecutive annual dividend increases: 63

Analysts' opinion: 6 strong buy, 2 buy, 16 hold, 0 sell, 1 strong sell

Emerson Electric (EMR, $44.30) makes a wide variety of industrial products, ranging from control valves to laser welders to electrical fittings.

The sharp downturn in oil prices is weighing on Emerson as energy companies continued to cut back on spending. William Blair Equity Research, which rates EMR at Market Perform, says the company's aggressive cost cutting will allow it to capitalize on its opportunities when business rebounds, perhaps in 2021. Earnings are forecast to increase at an average annual rate of 8.1% for the next three to five years.

Emerson has paid dividends since 1956 and has boosted its annual payout for 63 consecutive years, including its last increase in November 2019. Emerson's dividend has swelled at a compound annual rate of 10.1% since 1956.

SEE ALSO: 8 Stock Picks Getting Hit by Coronavirus Fears

Sysco

Getty Images


Market value: $19.8 billion

Dividend yield: 4.6%

Consecutive annual dividend increases: 51

Analysts' opinion: 1 strong buy, 3 buy, 8 hold, 0 sell, 1 strong sell

Sysco (SYY, $38.98), a food services and restaurant supply company, also is generating growth via acquisitions. And like the other Dividend Kings on this list, SYY is a dividend-raising machine. The company already has 51 years of payout increases under its belt. The most recent hike came in December when the company lifted the quarterly dividend to 45 cents a share from 39 cents a share.

As for M&A: In January 2019, Sysco bought Waugh Foods, an Illinois broadline distributor with approximately $40 million in annual sales. Other moves include its 2016 deal for European services and supplies company Brakes Group, as well as the Supplies on the Fly e-commerce platform that same year. In February 2018, it picked up Doerle Food Services, a Louisiana broadline distributor with approximately $250 million in annual foodservice distribution sales. Then in April 2018, the firm completed its acquisition of U.K.-based Kent Frozen Foods for an undisclosed sum.

However, Sysco has been able to generate plenty of growth on its own, too. A combination of organic and M&A-based growth has produced a steady ramp-up in revenues for years.

Looking forward, the pros expect profits to swell by 9.7% annually over the next half-decade. That should allow Sysco to keep up its streak of dividend growth.

SEE ALSO: The 25 Best Low-Fee Mutual Funds to Buy Now

Genuine Parts

Getty Images


Market value: $8.8 billion

Dividend yield: 5.2%

Consecutive annual dividend increases: 64

Analysts' opinion: 3 strong buy, 0 buy, 11 hold, 1 sell, 0 strong sell

Automotive and industrial replacement parts maker Genuine Parts (GPC, $60.81) is best-known for the Napa brand, though it also operates under AutoTodo in Mexico and UAP in Canada. Since its founding in 1928, it has pursued a strategy of acquisitions to fuel growth.

To that end, the company had a busy summer of 2019. In June, Genuine Parts' London subsidiary acquired France's Todd Group, a distributor of truck parts and accessories. A month later, GPC purchased the remaining 65% stake of Inenco, an Australian parts distributor.

Genuine Parts, like many stocks in the industrial space, has experienced tariff- and global slowdown-related headwinds.

Still, all along, Genuine Parts has been a cash machine. The Dividend King has hiked its payout annually for more than six decades. That includes a nearly 4% improvement to its distribution in February.

SEE ALSO: 25 Stocks Every Retiree Should Own

Federal Realty Investment Trust

Getty Images


Market value: $5.5 billion

Dividend yield: 5.5%

Consecutive annual dividend increases: 64

Analysts' opinion: 3 strong buy, 0 buy, 11 hold, 1 sell, 0 strong sell

Real estate investment trusts (REITs) such as Federal Realty Investment Trust (FRT, $76.08) are required to pay out at least 90% of their taxable earnings as dividends in exchange for certain tax benefits. Thus, REITs typically are a go-to source for income.

Few have been steadier than FRT.

Federal Realty Investment Trust - which owns retail and mixed-use real estate across 12 states, as well as the District of Columbia - is the lone REIT among the Dividend Kings. Bank of America Merrill Lynch downgraded the stock to Neutral from Buy in late March because FRT properties have an elevated concentration of "non-essential" businesses and restaurants, which are being disproportionately affected by the outbreak of coronavirus.

FRT has hiked its payout every year for more than half a century, and at an annual growth rate of more than 7%. It last raised the quarterly payout in August, by about 3% to $1.05 per share.

SEE ALSO: 13 Super-Safe Dividend Stocks to Buy Now

EDITOR'S PICKS

Copyright 2019-2020 The Kiplinger Washington Editors