The Kiplinger Dividend 15, our favorite stocks for dividend income, have been riding the bull since we last checked on them in the April issue of Kiplinger's. Since then, the average stock among our dividend champs has returned 6.6%, including dividends. Standard & Poor's 500-stock index, by comparison, has gained 4.8%.
More important for dividend investors, the average yield for the Dividend 15 is 3.7%, compared with 2.0% for the S&P 500 and 2.1% for the bellwether 10-year Treasury note (prices and returns are through June 14).
The biggest winner in the past four months: Blackstone (symbol BX, $47) , which offers investments in private equity, real estate and other alternatives. The stock has gained 33.6% since then and 39.1% over the past 12 months. Assets under management grew to $512 billion in March from $449.6 billion a year earlier. Its quarterly dividend is variable, depending on what the company earns.
Air Products and Chemicals (APD, $229), up 26.7% over the past four months and 35% over the past year, was in second place. The maker of industrial gases and chemicals raised its quarterly dividend by more than 5%, to $1.16 per share, in January. Because of its steep price gains, however, the company's 2.1% yield is one of the lowest of our dividend champs.
Biggest loser. 3M (MMM, $174) tumbled 19.5% over the past four months and 15.4% over the past 12. In the first quarter of 2019, sales declined 5%, and the company lowered its 2019 earnings projection from a range of $10.45 to $10.90 per share to $9.25 to $9.75. Even so, 3M has paid dividends for more than 100 years and has raised its dividend annually for the past 60 years. In February, the company increased its quarterly dividend to $1.44 per share from $1.36 per share. The stock currently yields 3.5%. AbbVie's (ABBV, $74) shares fell 16.2% over the past 12 months, pushing the yield to 5.4%, due to fears that sales of Humira, its flagship drug, could slow.
The Dividend 15 are divided into three groups. Dividend stalwarts have raised their payouts each year for at least 20 years. Our dividend growth category includes companies that can continue to deliver generous dividend hikes, fueled by strong growth in sales and profits. The third category is high yielders, which we like to see sporting yields of 4% or more.
That puts Blackstone, currently yielding 3.4%, as well as Realty Income (O, $69) on our watch list. Annualizing Realty's most recent monthly dividend payment gives the stock a yield of 3.7%. As with Blackstone, Realty's yield has fallen below 4% for a lovely reason: The stock has soared 42.9% over the past 12 months, which is astonishing for a normally staid real estate investment trust.
Ideally, the companies would boost their dividend to get over our 4% threshold, but a price decline could also do the trick. Let's hope for the former, but be prepared for the latter.
- 57 Best Dividend Stocks You Can Count On in 2019
- 11 Best Stocks to Buy and Hold for the Next Decade
- 9 Best Dow Jones Dividend Growth Stocks 2019
Copyright 2019 The Kiplinger Washington Editors