65 Best Dividend Stocks You Can Count On in 2021
Yield isn't everything when it comes to finding the best dividend stocks. Income investors know there's no substitute for regular dividend increases over the long haul.
Long-time dividend growth investors know the power of patience.
The best dividend stocks – companies that raise their payouts like clockwork decade after decade – can produce superior total returns, even if they sport apparently ho-hum yields. Regular dividend increases also lift the yield on an investor's original cost basis. Stick around long enough, and the unimpressive 1% yield you received on your initial investment can grow by leaps and bounds.
And, as always, let's not forget the magic of compounding. As Ben Franklin famously said, "Money makes money. And the money that money makes, makes money."
Companies with long histories of annual dividend growth also offer some peace of mind. When a firm manages to raise its dividend year after year, through recession, war, market crashes and more, it's making a powerful statement about both its financial resilience and its commitment to shareholders.
Enter the Dividend Aristocrats.
The Dividend Aristocrats are companies in the S&P 500 Index that have raised their annual payouts every year for at least 25 consecutive years. This list of the S&P's best dividend stocks is a mix of household names as well as companies with less name recognition that nonetheless play an outsized role in the American economy, even if it's mostly behind the scenes. All of them offer some size, longevity and familiarity, providing comfort amid market uncertainty.
S&P Dow Jones Indices added three new names for 2021, replacing Raytheon (RTX), Carrier Global (CARR) and Otis Worldwide (OTIS) after spinoffs and an acquisition dismantled the former United Technologies empire.
Here are the current 65 Dividend Aristocrats, including the newest faces to join the group. These have been among the best dividend stocks for income growth over the past few decades, and they're a great place to start if you're looking to add dividend battleships to your long-term portfolios.
Data is as of Feb. 9 unless otherwise noted. Companies are listed by the number of years they've consecutively raised their dividends, from lowest to highest. The index of Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend history based on company information and S&P data. Dividend-growth streaks include the current year if the company announced a dividend hike in 2020. Analysts' ratings provided by S&P Global Market Intelligence.
NEW ARISTOCRAT: West Pharmaceutical Services
- Market value: $21.4 billion
- Dividend yield: 0.2%
- Consecutive annual dividend increases: 25
- Analysts' opinion: 3 Strong Buy, 1 Buy, 2 Hold, 0 Sell, 1 Strong Sell
West Pharmaceutical Services (WST, $289.89) was added to the Dividend Aristocrats in January 2021 after recording its 25th straight year of dividend increases. Most recently, in October 2020, the company hiked its payout 6.3% to 17 cents.
WST operates in a critical sector of the healthcare supply chain, manufacturing packaging components and delivery systems for injectable drugs and other medical products. Bulls note that the rollout of COVID-19 vaccines is boosting demand for the firm's products. Meanwhile, the biopharmaceutical industry's robust pipeline should support longer-term growth.
Many of the best dividend stocks have rather poky expected growth rates, but not West Pharmaceutical. Analysts surveyed by S&P Global Market Intelligence expect the company to generate average annual earnings growth of 19% over the next three to five years.
Ample free cash flow and a payout ratio of just 15% should reassure shareholders that the annual dividend increases will keep coming.
NEW ARISTOCRAT: NextEra Energy
- Market value: $164.2 billion
- Dividend yield: 1.7%
- Consecutive annual dividend increases: 25
- Analysts' opinion: 9 Strong Buy, 4 Buy, 6 Hold, 1 Sell, 0 Strong Sell
NextEra Energy (NEE, $83.83) is another brand-new member of the Aristocrats. The utility company was added to the elite group of dividend growers in January 2020 after notching 25 consecutive years of dividend increases.
The company has two principal businesses: Florida Power & Light (FPL) is Florida's largest electric utility, while NextEra Energy Resources is a major player in wind and solar energy. Analysts like this combination of a successful regulated utility with a faster-growing renewables business. Population growth and the Biden administration's focus on renewable energy generation should serve the company well.
Utilities are known for their defensive characteristics and steady, often generous, dividends, but NEE belongs to a short list of utilities dedicated to multidecade dividend growth.
In February 2020, NextEra announced that it would increase its quarterly dividend on its common stock 12% to $1.40 per share quarterly. It will be paid on a split-adjusted basis of 35 cents per share to reflect a 4-for-1 stock split that went into effect in October 2020.
Utilities aren't known for growth, but that hasn't stopped NEE stock from being a longtime market beater. Annualized returns have outperformed the S&P 500 for the one-, three-, five-, 10- and 15-year periods, according to data from Morningstar. That's an achievement you don't always see with the best dividend stocks.
NEW ARISTOCRAT: International Business Machines
- Market value: $108.8 billion
- Dividend yield: 5.3%
- Consecutive annual dividend increases: 25
- Analysts' opinion: 3 Strong Buy, 1 Buy, 10 Hold, 1 Sell, 0 Strong Sell
International Business Machines (IBM, $122.10), a component of the Dow Jones Industrial Average, isn't quite as illustrious as it once was. The company's revenue has been in steady decline for the better part of a decade, hurt by its also-ran status in critical growth areas such as social, mobile, analytics and the cloud infrastructure business.
And yet through all its slips and stumbles, Big Blue has been a dividend stalwart. After 25 consecutive years of annual dividend increases, IBM was added to the Dividend Aristocrats in January 2021.
The big news around IBM these days is its partnering with Palantir (PLTR) on a new solution merging AI, data processing and hybrid cloud for the enterprise. Meanwhile, the company continues to incorporate Red Hat, which it acquired in 2019 in a $34 billion deal, the largest in the company's history. The marriage is intended to help IBM catch up to Microsoft (MSFT) and Amazon.com (AMZN) in highly lucrative cloud services.
IBM last raised its dividend in April 2020, by a penny per share to $1.63 quarterly. The hike marked its 25th consecutive year of payout growth, making it eligible for this select group of S&P 500 dividend stocks. IBM notes that it has paid consecutive quarterly dividends since 1916.
Importantly, the company has the resources to keep the growth streak alive, which is a characteristic you expect to see among the best dividend stocks. IBM paid $5.8 billion in dividends in 2020 and still recorded free cash flow after debt payments of $16 billion.
Albemarle
- Market value: $18.3 billion
- Dividend yield: 1.0%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 4 Strong Buy, 1 Buy, 9 Hold, 3 Sell, 3 Strong Sell
Albemarle (ALB, $158.69), which manufactures specialty chemicals such as lithium is slated to raise its dividend again soon. It's most recent hike came in February 2020 with a 5% increase to 38.5 cents per share.
With a payout ratio of around 42%, ALB certainly has the financial room to keep building up its dividend going forward -- a key aspect of the best dividend stocks.
Albemarle's products work entirely behind the scenes, but its chemicals go to work in a number of industries, from clean-fuel technologies to pharmaceuticals to fire safety. But lithium is at the heart of the bull case.
"The positive outlook on electric vehicle adoption is ALB's key driver, and we believe there is more upside risk for this trend to accelerate under a Blue Wave in the U.S.," says CFRA Research.
Caterpillar
- Market value: $107.2 billion
- Dividend yield: 2.1%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 6 Strong Buy, 4 Buy, 11 Hold, 1 Sell, 2 Strong Sell
Caterpillar (CAT, $197.28), the world's largest maker of heavy construction and mining equipment, was added to the Dividend Aristocrats in January 2019.
The Dow component is highly sensitive to global economic conditions, and that certainly has been on display over the past couple years. Sluggishness overseas, especially in China, has pressured shares, but long-term income investors about getting their cash.
CAT has paid a regular dividend without fail since 1933. And in 2020, the company paid dividends of $2.2 billion and repurchased $1.1 billion of Caterpillar common stock. Caterpillar has lifted its payout every year for 26 years, but it hasn't done so since May 2019. If it hikes it again in May 2021, it will extend that streak to 27 straight years.
A payout ratio of 75% and two consecutive years of declining revenue help explain its tardiness in hiking its dividend these days. But the best dividend stocks have ample free cash flow to cover the dividend, and CAT checks that box easily. For the 12 months ended Dec. 31 2020, CAT had free cash flow after debt payments of $1.97 billion after disbursing $2.2 billion in dividends.
Atmos Energy
- Market value: $11.5 billion
- Dividend yield: 2.8%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 5 Strong Buy, 4 Buy, 2 Hold, 1 Sell, 0 Strong Sell
Atmos Energy (ATO, $89.60), which distributes and stores natural gas, was added to the Dividend Aristocrats in January 2020. The Dallas-headquartered firm serves more than 3 million distribution customers in more than 1,400 communities across eight states, with a large presence in Texas and Louisiana.
Analysts, who are mostly bullish on the name, point to ATO's strong fundamentals and increasing U.S. demand for natural gas. A robust balance sheet and potential for above-average earnings growth also recommend the stock.
Indeed, Wall Street forecasts the company to generate average annual earnings growth of 6.6% over the next three to five years. For dividend stocks in the utility sector, that's A-OK.
Atmos clinched its 26th straight year of dividend growth in November 2020, when it announced an 8.7% increase to 62.5 cents a share per quarter.
Essex Property Trust
- Market value: $16.9 billion
- Dividend yield: 3.2%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 7 Strong Buy, 1 Buy, 12 Hold, 2 Sell, 0 Strong Sell
Essex Property Trust (ESS, $259.33), which was added to the Dividend Aristocrats a year ago, has taken some hits from the pandemic and related recession.
A real estate investment trust (REIT) that invests in apartments primarily on the West Coast, ESS has seen a flood of renters leave its cities to escape COVID-19. In other cases, tenants have been delinquent on rent.
Analysts, who as a group rate the stock at Hold, expect ESS to have a weak first half of 2021, as California's strict lockdown policies and onerous business restrictions won't unwind overnight.
The REIT went public in 1994 and has been hiking its payout ever since. The most recent increase came in February 2020, when ESS lifted the quarterly dividend 6.5% to $2.0775 per share.
The most recent distribution was announced in December. Investors are due a dividend hike pretty soon if ESS is to maintain its streak.
Expeditors International of Washington
- Market value: $16.4 billion
- Dividend yield: 1.1%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 0 Strong Buy, 0 Buy, 9 Hold, 4 Sell, 2 Strong Sell
Expeditors International of Washington (EXPD, $96.92) was added to the Aristocrats in January 2020 as it eclipsed a quarter-century of dividend growth. The logistics company last raised its semiannual dividend in May, to 52 cents a share from 50 cents a share.
It's been a rough few years for the transportation company. Trade tensions between the U.S. and China during the previous presidential administration greatly hurt the company. And now COVID-19 has caused declines in airfreight tonnage volumes and ocean container shipments.
Through it all, however, EXPD has remained committed to its semiannual dividend, which it has hiked every year for more than a quarter-century. A payout ratio of just 27% should help ensure that Expeditors has ample resources to keep the streak alive and maintain its place on a list of the best dividend stocks.
Chubb
- Market value: $74.3 billion
- Dividend yield: 1.9%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 5 Strong Buy, 7 Buy, 8 Hold, 1 Sell, 0 Strong Sell
Chubb (CB, $164.53) was added to the Dividend Aristocrats in January 2019. The insurance company last raised its payout in May 2020, by 4% to 78 cents a share. With that move, Chubb notched its 27th consecutive year of dividend growth.
As the world's largest publicly traded property and casualty insurance company, Chubb boasts operations in 54 countries and territories. It's not the most exciting topic for dinner conversation, but it's a profitable business that supports a longstanding dividend.
The company's payout ratio stands at just 29% of earnings, so income investors can expect Chubb to remain among the Dividend Aristocrats for years to come.
Realty Income
- Market value: $23.1 billion
- Dividend yield: 4.6%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 9 Strong Buy, 4 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Realty Income (O, $61.74) is a REIT that investors can rely on for steady income, but there's another aspect to this stock that might suit certain income investors: Realty Income is a rare breed of monthly dividend stocks.
The company owns more than 6,500 commercial real estate properties that are leased out to more than 630 tenants – including Walgreens (WBA), 7-Eleven, FedEx (FDX) and Dollar General (DG) – operating in 51 industries. These are mostly retail businesses whose fortunes have diverged during the pandemic. As a result, shares in O are off 22% over the past 52 weeks.
Be that as it may, Realty Income typically generates predictable cash flow thanks to the long-term nature of its leases. The company has delivered compound average annual dividend growth of 4.4% since 1994.
In December 2020, the company announced a dividend increase to 23.45 cents per share from 23.40 cents per share. O has delivered 606 consecutive monthly dividend payments to date, including 93 consecutive quarterly increases.
People's United Financial
- Market value: $6.4 billion
- Dividend yield: 4.9%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 2 Strong Buy, 1 Buy, 12 Hold, 0 Sell, 0 Strong Sell
People's United Financial (PBCT, $15.03) is a rare banking play in this collection of dividend stocks. The regional financial services firm – which operates more than 400 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine – has more than $63 billion in total assets. The venerable New England institution traces its roots back to 1842.
A number of analysts praise the bank's "sleep well at night" loan book, and its reputation as a skilled buyer of banks now that M&A activity is set to heat up. Solid capital ratios also instill confidence in the name.
That said, the consensus recommendation on PBCT stock is Hold, and an average price target of $15.20 implies upside of just 1% in the next 12 months or so.
PBCT last raised its dividend in April 2020, by 1.4% to 17.75 cents per share. With more than ample free cash flow to cover the dividend and a comfortable payout ratio of 42% income investors can feel confident that the financial services firm will continue to be one the best dividend stocks.
A.O. Smith
- Market value: $9.9 billion
- Dividend yield: 1.7%
- Consecutive annual dividend increases: 28
- Analysts' opinion: 4 Strong Buy, 1 Buy, 8 Hold, 1 Sell, 0 Strong Sell
A.O. Smith (AOS, $61.32), a manufacturer of commercial and residential water heaters, is a relatively recent addition to the Dividend Aristocrats, entering the club in 2018. In October 2020, it announced an 8.3% raise in its quarterly payout to 26 cents a share. AOS noted at the time that its five-year compound annual dividend growth rate was 24%.
Although the pandemic pressured sales for much of last year, particularly in China, the company bounced back in a big way in the fourth quarter. Revenue jumped 11% to a record $834.5 million, primarily due to higher residential water heater volumes in North America and higher sales in China.
As another potential global economic recovery play, analysts expect the company's earnings to rise at a rate of 10% a year for the next three to five years. AOS notes that its dividend has delivered a five-year compound annual growth rate of 22%. Furthermore, the company has returned a total of $1.4 billion to shareholders through dividends and share repurchases over the past five years.
Linde
- Market value: $134.2 billion
- Dividend yield: 1.7%
- Consecutive annual dividend increases: 28
- Analysts' opinion: 11 Strong Buy, 6 Buy, 4 Hold, 0 Sell, 0 Strong Sell
Linde (LIN, $255.62) became a Dividend Aristocrat in late 2018 after it completed its merger with Praxair, which itself was added to the illustrious list of the S&P 500's best dividend stocks for income growth in January 2018. The $90 billion tie-up of Linde and Praxair created the world's largest industrial gasses company.
Praxair raised its dividend for 25 consecutive years before its merger, and the combined company continues to be a steady dividend payer. Prior to the merger, Linde, now headquartered in Dublin, raised its dividend every year since 2014. Linde's most recent hike came in January – a 10% bump to $1.06 per share.
Analysts project the multinational industrial firm's profits to increase at an average annual rate of more than 11% over the next three to five years, according to a survey by S&P Global Market Intelligence. With free cash flow after debt payments of $5.2 billion in 2020 – vs. the $2 billion it disbursed in dividends – it should have plenty of firepower to keep its streak alive.
General Dynamics
- Market value: $46.4 billion
- Dividend yield: 2.8%
- Consecutive annual dividend increases: 28
- Analysts' opinion: 7 Strong Buy, 3 Buy, 7 Hold, 1 Sell, 1 Strong Sell
Defense contractor General Dynamics (GD, $162.14) is one of the newer members of the Dividend Aristocrats, having been added to the elite list of best dividend stocks for growth in 2017.
Generous military spending has helped fuel this dividend stock's steady stream of cash returned to shareholders. In one of the most recent big deals, in December 2020 the company was awarded a $4.6 billion U.S. Army contract for latest configuration of the Abrams Main Battle Tank.
General Dynamics has upped its distribution for 28 consecutive years. The last raise was announced in March 2020, when GD lifted the quarterly payout by 7.8% to $1.10 a share. With a payout ratio of 39%, General Dynamics should have sufficient room for more dividend growth.
Roper Technologies
- Market value: $42.3 billion
- Dividend yield: 0.6%
- Consecutive annual dividend increases: 29
- Analysts' opinion: 4 Strong Buy, 3 Buy, 4 Hold, 1 Sell, 1 Strong Sell
Roper Technologies (ROP, $403.73) – an industrial company whose businesses include medical and scientific imaging, RF technology and software, and energy systems and controls, among others – has been churning out income for almost three decades.
The most recent hike came in January 2021, when the quarterly payout was lifted 9.8%, to 56.25 cents per share.
Roper's dividend yield might not look like much, for patient investors have come to appreciate what the steady increases do for their portfolios. ROP has outperformed the broader market over the past five-, 10- and 15-year periods, according to Morningstar.
A combination of acquisitions, organic growth and stronger margins have helped Roper juice its dividend without stretching its profits. And don't sweat ROP's ability to keep delivering more dividend hikes in the year ahead; the firm has a small payout ratio of 22.5%, versus 41% for the S&P 500 in 2020.
Ecolab
- Market value: $61.5 billion
- Dividend yield: 0.9%
- Consecutive annual dividend increases: 29
- Analysts' opinion: 4 Strong Buy, 2 Buy, 12 Hold, 3 Sell, 0 Strong Sell
Ecolab (ECL, $215.56) provides water treatment and other industrial-scale maintenance services for several industries, including food, healthcare, and oil and gas. Practically speaking, its products help optimize everything from offshore oil production to electronics polishing to commercial laundries.
Ecolab's fortunes can wane as industrial needs fluctuate, though; for instance, when energy companies pare spending, ECL will feel the burn.
Over the long haul, however, this Dividend Aristocrat's shares have been a proven winner. The stock has delivered a market-beating annualized return over the past three-, 10- and 15-year periods. That's thanks in no small part to 29 consecutive years of dividend increases. The company's most recent hike came in December, when ECL raised its quarterly payout by 2.1% to 48 cents a share.
Chevron
- Market value: $175.1 billion
- Dividend yield: 5.6%
- Consecutive annual dividend increases: 33
- Analysts' opinion: 9 Strong Buy, 9 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Chevron (CVX, $90.96) is an integrated oil giant that also has operations in natural gas and geothermal energy. Like its competitors, Chevron is dealing with price pressure stemming from COVID-19's deleterious effect on global demand.
And although prices have recovered sharply from the 20-year lows hit last winter, forecasters don't expect much upside from current levels this year.
On a positive note, CVX took advantage of the industry's woes in July 2020 by acquiring Noble Energy in a $5 billion all-stock transaction. On a more troubling note, Chevron continues to slash spending. The firm cut its 2021 capital spending and exploratory budget to $14 billion at the end of 2020, down from previous guidance of $20 billion.
The silver lining for income investors is that budget cuts help CVX maintain its dividend. The energy company has more than three decades of uninterrupted dividend growth under its belt, and management has said it will protect the dividend at all costs.
The most recent hike came in January 2020, when CVX lifted its quarterly dividend by more than 8% to $1.29 per share. And with a yield of 5.6%, the dividend is one of the most generous in the S&P 500.
T. Rowe Price
- Market value: $37.4 billion
- Dividend yield: 2.2%
- Consecutive annual dividend increases: 34
- Analysts' opinion: 4 Strong Buy, 1 Buy, 10 Hold, 2 Sell, 0 Strong Sell
Asset managers such as T. Rowe Price (TROW, $165.14) have been losing market share to indexed funds of the type Vanguard offers, but the company still boasts $1.47 trillion in assets under management, and analysts expect strong earnings growth for years to come.
According to S&P Global Market Intelligence, the Street expects TROW to deliver average annual earnings growth of 13.7% over the next three to five years. Although competitive pressure remains fierce, analysts note that TROW is getting strong performance from its actively managed funds, and its focus on the growing retirement market has helped stabilize its assets under management.
T. Rowe Price has improved its dividend every year for 34 years, including an ample 18.4% boost to the payout announced in February 2020. Given its track record as one of the best dividend stocks and low 27% payout ratio, investors can expect a 35th consecutive dividend hike in 2021.
McCormick & Co.
- Market value: $24.2 billion
- Dividend yield: 1.5%
- Consecutive annual dividend increases: 35
- Analysts' opinion: 2 Strong Buy, 1 Buy, 5 Hold, 3 Sell, 1 Strong Sell
McCormick (MKC, $90.77) – the maker of herbs, spices and other flavorings – has been bulking up over the past three years to drive sales growth, and the deals have been paying off.
The bullish case comes down to continued strong grocery and supermarket sales of its products, driven by increased at-home dining during the pandemic. Hopefully, that will offset weakness in the foodservice business.
Analysts expect average annual earnings growth of almost 6% for the next three to five years. That should provide support for McCormick's dividend, which has been paid for 96 consecutive years and raised annually for 35.
Most recently, in November, the company hiked the quarterly dividend to 68 cents a share from 62 cents. After a two-for-one stock split in December, MKC now pays 34 cents a share.
In other news, MKC acquired the parent company of Cholula Hot Sauce for $800 million cash in November 2020.
Cardinal Health
- Market value: $15.5 billion
- Dividend yield: 3.6%
- Consecutive annual dividend increases: 35
- Analysts' opinion: 5 Strong Buy, 1 Buy, 13 Hold, 0 Sell, 0 Strong Sell
A steady stream of acquisitions helped wholesale drug and medical device distributor Cardinal Health (CAH, $52.95) become the giant that it is today. Its most recent acquisition – a $2.2 billion all-stock deal for Bindley Western Industries – was announced in December 2020.
The pandemic has pressured medical device makers as patients put off elective surgeries, but CAH was still able to squeeze out some sales growth at the end of last year. The firm's revenue increased 5% to $41.5 billion for its fiscal second quarter ended Jan. 31, 2021.
On the dividend front, Cardinal Health has upped the ante on its annual payout for 35 years and counting. The Dividend Aristocrat last raised its dividend in May 2020, when it declared a small 1% increase to 48.59 cents per share.
Amcor
- Market value: $17.6 billion
- Dividend yield: 4.1%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 0 Strong Buy, 2 Buy, 3 Hold, 1 Sell, 0 Strong Sell
Amcor (AMCR, $11.24) is a pretty boring company. It designs, manufactures and sells various packaging products for every industry you can think of, including food, beverage, pharmaceutical, medical, home and personal care.
But sometimes boring can be beautiful, and that's the case with Amcor when it comes to reliable income. It was named to the list of payout-hiking dividend stocks at the start of 2020 after its June acquisition of Bemis. Bemis, which fell out of the S&P 500 Index and thus the Aristocrats in 2014, rejoined by merit of its merger with Amcor.
The company last raised its dividend in June 2020, by 2.2% to 11.75 cents a share. The analyst community expects the company to deliver average annual earnings growth of 7.7%. With a yield of more than 4%, AMCR is one of the more generous Dividend Aristocrats.
AT&T
- Market value: $203.9 billion
- Dividend yield: 7.2%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 7 Strong Buy, 2 Buy, 17 Hold, 1 Sell, 3 Strong Sell
Telecommunications stocks are synonymous with dividends. Customers pay for service every month, which ensures a steady stream of cash for these dividend stocks.
AT&T (T, $28.62) – the largest U.S. telecom company – is a perfect example.
AT&T has raised its dividend on an annual basis for 36 consecutive years, and typically boasts one of the highest yields in the S&P 500. That's in large part because of the cash flows generated by the telecom business, which enjoys what some call an effective duopoly with rival Verizon (VZ). Together, the pair command almost 70% of the U.S. wireless subscriptions market, according to data from Statista.
That said, the dividend growth isn't exactly breathtaking. AT&T's most recent increase was a 2% uptick announced in December 2019, to 52 cents per share. That continued a years-long streak of penny-per-share hikes. Investors should see a 37th consecutive annual raise later this year.
Cintas
- Market value: $36.7 billion
- Dividend yield: 0.9%
- Consecutive annual dividend increases: 37
- Analysts' opinion: 2 Strong Buy, 3 Buy, 8 Hold, 0 Sell, 1 Strong Sell
Cintas (CTAS, $349.34) is perhaps best-known for providing corporate uniforms, but the company also offers maintenance supplies, tile and carpet cleaning services and even compliance training.
As such, it's seen by some investors as a bet on jobs growth, and should move ahead of a pick-up in hiring as the economy recovers from the pandemic. CTAS has worked pretty well as a proxy for employment in the past. Cintas' annual return beats the broader market by double-digits over the past three-, five- and 10-year periods.
Regardless of how the labor market is doing, Cintas is a stalwart when it comes to being one of the best dividend stocks. The company has raised its payout every year since going public in 1983. Most recently, in January, CTAS raised its annual dividend by 18% to a full $3 per share.
Brown-Forman
- Market value: $36.7 billion
- Dividend yield: 1.0%
- Consecutive annual dividend increases: 37
- Analysts' opinion: 1 Strong Buy, 0 Buy, 9 Hold, 3 Sell, 4 Strong Sell
Brown-Forman (BF.B, $76.59) is one of the largest producers and distributors of alcohol in the world. Jack Daniel's Tennessee whiskey and Finlandia vodka are just two of its best-known brands, with the former helping drive long-term growth.
Whiskey is increasingly popular with American tipplers, surveys show, and Jack Daniel's leads the pack. Tequila sales – Brown-Forman features the Herradura and El Jimador brands, among others – also are on the rise.
Unlike many of the best dividend stocks on this list, you won't have a say in corporate matters with the publicly traded BF.B shares. They hold no voting power. And most of the voting-class A shares are held by the Brown family.
Still, you can enjoy in the company's gains and dividends. That payout has been on the rise for 37 consecutive years and has been delivered without interruption for 76. Most recently, Brown-Forman upped the quarterly ante by 3% in November 2020, to by 3% to 17.95 cents per share.
Exxon Mobil
- Market value: $214.3 billion
- Dividend yield: 6.7%
- Consecutive annual dividend increases: 37
- Analysts' opinion: 5 Strong Buy, 4 Buy, 14 Hold, 2 Sell, 1 Strong Sell
Exxon Mobil (XOM, $50.63) remains one of the world's largest energy companies and is the biggest oil company by market value in the U.S. It was removed from the blue-chip Dow Jones Industrial Average in August 2020, but it remains a Dividend Aristocrat in good standing.
At least for the time being.
This dividend stalwart and its various predecessors have strung together uninterrupted payouts since 1882. Furthermore, XOM has continued to hike its payout even as oil prices have weakened in recent years. The Dow component has increased its dividend for 37 consecutive years, and has done so at an average annual rate of 6.2%. That includes a 6.1% boost to its quarterly checks announced in late April 2019.
That said, while XOM is one of the few oil and gas companies that didn't cut or suspend its payout in 2020, it does need a hike in 2021 to extend its streak of annual payout growth. Analysts say the quarterly dole appears safe for now, as management has stressed to shareholders its commitment to a reliable growing dividend. Sharp cuts to capital plans also should help XOM make good on its disbursements.
Air Products & Chemicals
- Market value: $56.3 billion
- Dividend yield: 2.4%
- Consecutive annual dividend increases: 39
- Analysts' opinion: 9 Strong Buy, 7 Buy, 9 Hold, 0 Sell, 0 Strong Sell
Air Products & Chemicals (APD, $254.44) has spent much of the past few years restructuring. Under pressure from investors, it started to shed some weight, including spinning off its Electronic Materials division and selling its Performance Materials business.
Air Products, which dates back to 1940, now is a slimmer company that has returned to focusing on its legacy industrial gases business. But it hasn't taken its eye off the dividend, which it has improved on an annual basis for 39 years in a row. That includes a 12% upgrade in January 2021 to $1.50 a share.
"In fiscal 2020, we were proud to return about $1.1 billion to our shareholders through our dividend while having significant distributable cash flow for high-return industrial gas investments," CEO Seifi Ghasemi said in a press release at the time.
Aflac
- Market value: $32.0 billion
- Dividend yield: 2.9%
- Consecutive annual dividend increases: 39
- Analysts' opinion: 0 Strong Buy, 3 Buy, 6 Hold, 1 Sell, 1 Strong Sell
Aflac (AFL, $46.25) is a supplemental insurance company – popularized by the loud Aflac duck – with roots going back to 1955 that covers numerous workplace offerings, such as accident, short-term disability and life insurance.
COVID has done a number on insurers, and AFL shares remain down by more than 10% over the past 52 weeks. Analysts' consensus recommendation on the stock is Hold.
Investors should be heartened by Aflac's ability to increase both revenue and earnings during the fourth quarter ended Dec. 31. And they shouldn't have to fret about the dividend. The payout is an extremely conservative 12% of profits, for one thing. And in November 2020, Aflac lifted its quarterly dividend for a 39th consecutive year, this time by a whopping 17.9% to 33 cents per share.
Franklin Resources
- Market value: $13.5 billion
- Dividend yield: 4.2%
- Consecutive annual dividend increases: 39
- Analysts' opinion: 1 Strong Buy, 0 Buy, 8 Hold, 3 Sell, 3 Strong Sell
The name Franklin Resources (BEN, $26.62) might not be well-known among investors; however, along with its subsidiaries, it's called the more familiar Franklin Templeton investments. The global investment firm is one of the world's largest with $1.47 trillion in assets under management, and is known for its bond funds, among other offerings.
Mutual fund providers have come under pressure because customers are eschewing traditional stock pickers in favor of indexed investments. However, Franklin has fought back in recent years by launching its first suite of passive exchange-traded funds.
Analysts aren't too keen on the stock at current levels. Their consensus recommendation stands at Hold, which includes a total of six Sell calls. However, the asset manager remains attractive as an income provider for investors looking for the best dividend stocks. It has raised its dividend annually since 1981, including a 4% hike to 28 cents per share quarterly announced in December 2020.
Sherwin-Williams
- Market value: $64.8 billion
- Dividend yield: 0.7%
- Consecutive annual dividend increases: 42
- Analysts' opinion: 12 Strong Buy, 6 Buy, 9 Hold, 1 Sell, 1 Strong Sell
Thanks to its 2017 acquisition of Valspar, Sherwin-Williams (SHW, $713.01) is one of the largest paints, coatings and home-improvement companies in the world. And at the moment it's enjoying a bit of a sales boost from people spending so much time at home.
Net sales rose 2.6%, to $18.36 billion in the fourth quarter, thanks to higher sales in residential repaint, Do-it-Yourself and new residential construction in the U.S. and Canada.
With shares now going for more than $700 a pop, SHW announced a stocks split earlier this year. Each shareholder of record at the close of business on March 23 will receive two additional common shares for each then-held common share. The split will take place after the close of trading on March 31.
Income investors certainly don't need to worry about Sherwin-Williams' steady and rising dividend stream. SHW has hiked its distribution every year since 1979. Investors expect the company to next increase to come later in February.
Medtronic
- Market value: $158.7 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 43
- Analysts' opinion: 16 Strong Buy, 6 Buy, 5 Hold, 0 Sell, 0 Strong Sell
Medtronic (MDT, $117.88), one of the world's largest makers of medical devices, is an income machine. Most recently, in June 2020, MDT lifted its quarterly payout by 7.4% to 58 cents a share. Its dividend per share has grown by 50% over the past half-decade and has grown at a 17% compounded annual growth rate over the past 43 years, Medtronic says.
MDT aims to return a minimum of 50% of its free cash flow to shareholders through dividends and share repurchases. In 2020, it disbursed $2.9 billion in dividends and spent $664 million in share repurchases, which represented 59% of free cash flow.
The company can steer all this cash back to shareholders thanks to the ubiquity of its products. It holds more than 47,000 patents on products ranging from insulin pumps for diabetics to stents used by cardiac surgeons. Look around a hospital or doctor's office – in the U.S. or in more than 160 other countries – and there's a good chance you'll see its products.
Naturally, Medtronic spends heavily on research and development, including $2.3 billion in 2020.
Clorox
- Market value: $23.6 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 43
- Analysts' opinion: 5 Strong Buy, 0 Buy, 8 Hold, 3 Sell, 1 Strong Sell
Clorox (CLX, $187.35), whose brands include its namesake bleaches, Glad trash bags and Hidden Valley salad dressing, was a big early beneficiary of the pandemic as demand surged for its ubiquitous cleaning materials.
But the rollout of COVID-19 vaccines and the sense that the pandemic is closer to the end than the beginning is now weighing on CLX shares. Some investors are concerned about rising commodity costs and supply chain inefficiencies due to the overwhelming demand for some CLX products.
None of these cyclical setbacks should worry the long-haul income faithful. Clorox has increased its payout every year since 1977, most recently in May 2020 when it climbed 5% to $1.11 per share.
CLX boasts a payout ratio of just 45% and ample free cash flow. That means investors can count on Clorox to increase the dividend for a 44th straight year this spring.
McDonald's
- Market value: $160.9 billion
- Dividend yield: 2.4%
- Consecutive annual dividend increases: 44
- Analysts' opinion: 21 Strong Buy, 8 Buy, 8 Hold, 0 Sell, 0 Strong Sell
The world's largest hamburger chain also happens to be a dividend stalwart. Changing consumer tastes will always be a risk, but McDonald's (MCD, $215.98) dividend dates back to 1976 and has gone up every year since. That's the power of being a consumer giant that has been able to adjust itself to changing consumer tastes without losing its core.
The pandemic has been brutal for restaurants, MCD included, but it has the wherewithal to cope better than most, analysts say. Bulls note that large restaurant chains that offer value menus, spend heavily on advertising and have clean balance sheets are better equipped to deal with this extended period of industry weakness.
And even with the pandemic-related slowdown, MCD's profit potential remains robust for such a massive company. Analysts expect the chain to generate average annual earnings growth of 10.7% over the next three to five years.
MCD last raised its dividend in October 2020, when it lifted the quarterly payout by 3% to $1.29 a share. That marked its 44th consecutive annual increase.
Pentair
- Market value: $9.1 billion
- Dividend yield: 1.4%
- Consecutive annual dividend increases: 45
- Analysts' opinion: 5 Strong Buy, 2 Buy, 9 Hold, 3 Sell, 0 Strong Sell
U.K.-based water-treatment company Pentair (PNR, $54.81) whose divisions include Flow Technologies, Filtration & Process and Aquatic & Environmental Systems, is always looking to expand its capabilities.
In early January 2021 it closed on its acquisition of Rocean, a maker of countertop filtration systems for the home. Terms were undisclosed. That followed its 2019 acquisition of Aquion for $160 million in cash.
Pentair has raised its dividend annually for 45 straight years, most recently by 5% to 20 cents a quarter. Analysts on average project long-term earnings growth of 8.8% a year over the next three to five years, according to S&P Global Market Intelligence.
A modest payout ratio of 35% bodes well for future increases from one of the best dividend stocks.
Walgreens Boots Alliance
- Market value: $43.2 billion
- Dividend yield: 3.8%
- Consecutive annual dividend increases: 45
- Analysts' opinion: 2 Strong Buy, 0 Buy, 18 Hold, 2 Sell, 0 Strong Sell
Tracing its roots back to a single drugstore founded in 1901, Walgreens Boots Alliance (WBA, $50.00) has boosted its dividend every year for more than four decades. Mostly recently, in January 2021, it declared a hike of 2.2% to 46.75 cents per share.
As for its origins, Walgreen Co. merged with Alliance Boots – a Switzerland-based health and beauty multinational – in 2014 to form the current company. Walgreens Boots Alliance and its predecessor company have paid a dividend in 350 straight quarters (more than 88 years) and have raised the payout for 45 consecutive years, the company says.
Although the COVID-19 pandemic has benefitted some retailers in the consumer staples industry to various degrees, WBA saw only a short-lived spike in sales. Lockdowns and a shift to online shopping have not only crimped the global pharmacy chain's sales, but also its profit margins.
Be that as it may, the dividend appears safe. WBA paid out $1.7 billion in dividends over the 12 months ended November 2020 and still walked away with $2.6 billion in free cash flow after debt payments.
Walmart
- Market value: $412.6 billion
- Dividend yield: 1.5%
- Consecutive annual dividend increases: 46
- Analysts' opinion: 18 Strong Buy, 9 Buy, 7 Hold, 2 Sell, 0 Strong Sell
The world's largest retailer might not pay the biggest dividend, but it sure is consistent. Walmart (WMT, $145.83) has been delivering meager penny increases to its dividend since 2014, including March 2020's bump to 54 cents per share. But that has been enough to maintain its 46-year streak of consecutive annual payout hikes. Investors anticipate another penny per share increase in March 2021.
The world's largest company by sales, Walmart operates approximately 11,500 stores and e-commerce websites under 56 banners in 27 countries.
Although Walmart is a brick-and-mortar business, it has made great strides in e-commerce as it competes against the Big Kahuna of Amazon.com (AMZN). The discount retailer's U.S. e-commerce sales grew 79% in the quarter ended Oct. 31. Indeed, it's now the second largest e-commerce retailer in the U.S., although its market share (5.9%) is far smaller than Amazon's (39%).
A payout ratio of 31% and gushers of free cash flow should support further dividend increases for a long time.
Automatic Data Processing
- Market value: $71.6 billion
- Dividend yield: 2.2%
- Consecutive annual dividend increases: 46
- Analysts' opinion: 3 Strong Buy, 2 Buy, 10 Hold, 3 Sell, 2 Strong Sell
Automatic Data Processing (ADP, $167.38) is the world's largest payroll processing firm, responsible for paying nearly 40 million employees and serving more than 810,000 clients across 140 countries.
ADP unsurprisingly had its challenges in 2020 amid high unemployment, but it could be spring-loaded for growth as the economy recovers and hiring picks up.
Beyond the vagaries of the business cycle, ADP's great advantages is its "stickiness." It's difficult and expensive for corporate customers to change payroll service providers. That competitive advantage helps throw off consistent income and cash flow. In turn, ADP has become a dependable dividend payer – one that has provided an annual raise for shareholders since 1975.
In November 2020, ADP lifted its payout by only 2% to 93 cents per share, but that was good enough to extend its annual dividend growth streak to 46 consecutive years. A rebounding economy could allow ADP to be a bit more generous in its dividend increase in 2021.
Archer Daniels Midland
- Market value: $30.3 billion
- Dividend yield: 2.8%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 7 Strong Buy, 3 Buy, 4 Hold, 0 Sell, 0 Strong Sell
Archer Daniels Midland (ADM, $54.48) processes ingredients for food and feed, including corn sweeteners, starches and emulsifiers such as lecithin. It also has a commodity trading business. It's a truly global agricultural powerhouse, too, boasting customers in 170 countries that are served by 450 crop procurement locations, as well as more than 330 ingredient plants.
In good news for shareholders, ADM is coming off a strong year. The outlook is upbeat too. High export demand for grains and oilseeds, continued strong growth in the nutrition division and China's elevated import demand are expected to extend through 2021, analysts say.
The Street expects adjusted earnings per share to increase 21% this year to $3.86, per S&P Global Market Intelligence. Revenue is projected to rise just 4.3% to $67.1 billion.
Archer Daniels Midland has paid out dividends on an uninterrupted basis for 89 years. The most recent hike came on Jan. 21, 2021, when ADM increased the quarterly payout 2.8% to 37 cents a share. The move extends the dividend stock's streak of annual raises to 47 years.
Consolidated Edison
- Market value: $23.9 billion
- Dividend yield: 4.4%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 0 Strong Buy, 1 Buy, 10 Hold, 4 Sell, 3 Strong Sell
Consolidated Edison (ED, $71.35) is the largest utility company in New York State by number of customers. Founded in 1823, it provides electric, gas or steam services to roughly 3.5 million customers in New York City and Westchester County. ConEd also happens to be North America's second-largest solar power provider, and is investing in electric vehicle charging programs and other green energy endeavors.
Like most utilities, Consolidated Edison is highly regulated but enjoys a fairly stable stream of revenues thanks to limited direct competition – but not a lot of growth. Analysts note that ConEd has delivered essentially flat revenue and relatively modest dividend growth of 2.7% over the past five years. That said, as with all the best dividend stocks, the payout does appear to be safe.
The longtime Dividend Aristocrat has hiked its annual distribution without interruption for close to five decades. In January 2021, the utility raised its quarterly payout 1.3% to 77.5 cents per share from 76.5 cents per share.
S&P Global
- Market value: $80.0 billion
- Dividend yield: 1.0%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 7 Strong Buy, 1 Buy, 2 Hold, 1 Sell, 0 Strong Sell
Formerly known as McGraw Hill Financial, S&P Global (SPGI, $332.39) is the company behind S&P Global Ratings, S&P Global Market Intelligence and S&P Global Platts. Although most investors probably know it for its majority stake in S&P Dow Jones Indices – which maintains the benchmark S&P 500 index and the blue-chip Dow Jones Industrial Average – it's also a central player in corporate and financial analytics, information and research.
S&P Global has paid a dividend each year since 1937 and is one of fewer than 25 companies in the S&P 500 that has increased its dividend annually for at least 48 years, the company notes. Most recently, in January 2021, SPGI raised its quarterly payout by a healthy 15% to 77 cents a share.
"Increasing the dividend demonstrates our confidence and optimism in the continued strength of our cash flow generation and financial position," said Douglas Peterson, CEO of S&P Global, in a press release. "In 2020, we returned $1.8 billion to shareholders in the form of dividends and share repurchases."
PPG Industries
- Market value: $32.4 billion
- Dividend yield: 1.5%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 10 Strong Buy, 5 Buy, 8 Hold, 0 Sell, 1 Strong Sell
PPG Industries (PPG, $137.29) makes coatings and paints for numerous industries, including aerospace, architecture, automotive and packaging. It's a business that always has some level of need, but even before COVID struck, PPG warned of headwinds from global trade tensions and weaker demand from Boeing (BA), a major customer.
But so far, PPG is weathering the storm pretty well. The company's fourth quarter earnings and sales exceeded Wall Street estimates. And it's seen as a solid way to play the global economic recovery from the pandemic. Longer-term, analysts are looking for average annual earnings growth of 10.5%.
Accelerating earnings growth and a payout ratio of just 35% should help support its cash distribution, which has been paid since the end of the 19th century and raised on an annual basis for 48 years. The dividend stock last improved its payout in July 2020, when it announced a 6% increase to 54 cents per share.
VF Corp.
- Market value: $31.7 billion
- Dividend yield: 2.4%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 8 Strong Buy, 7 Buy, 7 Hold, 1 Sell, 1 Strong Sell
VF Corp. (VFC, $81.05) is an apparel company with a large number of brands under its umbrella, including The North Face outdoor products, Timberland boots and Eastpak backpacks.
And it's continually on the prowl to add to its offerings. Most recently, at the end of 2020 the company closed a $2.1 billion deal to buy Supreme, a privately held global streetwear brand. And in 2018, it completed the acquisition of the Altra footwear brand from Icon Health & Fitness for an undisclosed sum.
Analysts expect average annual earnings growth of more than 19% for the next three to five years thanks to its acquisitiveness.
In December 2020, VFC raised its dividend for a 48th consecutive year, by 2.1% to 49 cents. The company notes that it returned approximately $1.7 billion to shareholders through share repurchases and dividends in fiscal 2020.
PepsiCo
- Market value: $192.9 billion
- Dividend yield: 2.9%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 6 Strong Buy, 5 Buy, 10 Hold, 1 Sell, 0 Strong Sell
Not too long ago, investors fretted over a long-term slide in sales of carbonated beverages, but that turned out not to be a secular trend after all. Grand View Research forecasts the global market for fizzy drinks to produce a compound annual growth rate of 5.1% through 2027.
Happily for shareholders, PepsiCo (PEP, $139.60) has gotten ahead of the trend. In 2018 it acquired at-home carbonated drink maker SodaStream for $3.2 billion.
Separately, PEP has an ace up its sleeve with its snacks business. The company's Frito-Lay division is known for Doritos, Tostitos, Rold Gold pretzels, and numerous other brands. Meanwhile, demand for salty snacks remains solid.
And most recently, Pepsi announced it would team up with Beyond Meat (BYND) to create a lineup of plant-based snacks and even drinks.
The bottom line? Analysts expect PEP to generate average annual earnings growth of 6.8% over the next three to five years. And that, in turn, should help PepsiCo continue its dividend growth streak, which reached 48 years thanks to a 7% hike to $1.0225 per share announced in November 2020.
Nucor
- Market value: $16.5 billion
- Dividend yield: 3.0%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 2 Strong Buy, 1 Buy, 7 Hold, 1 Sell, 0 Strong Sell
Shareholders in Nucor (NUE, $54.68), the largest U.S. steelmaker, is starting to see signs of a turnaround after COVID-19 pummeled demand for its products.
In the fourth quarter ended Dec. 31, NUE enjoyed sequential sales growth thanks to increased demand for steel sheet, bars and beams. Steel pricing is also saw improvement in the final quarter of 2020.
Whether it's a good way to play a global economic recovery remains to be seen, but there's little doubt about the reliability of its dividend growth. As one of the best dividend stocks, Nucor has increased its dividend for 48 consecutive years – every year since it first began paying dividends in 1973.
The most recent increase came in December 2020 when NUE lifted the quarterly disbursement to 40.5 cents per share from 40.3 cents per share. Over the past 10 years, the company has returned approximately $6 billion to its shareholders through dividends and share repurchases.
Leggett & Platt
- Market value: $5.7 billion
- Dividend yield: 3.7%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 1 Strong Buy, 1 Buy, 2 Hold, 0 Sell, 0 Strong Sell
Leggett & Platt (LEG, $43.03) has its hands in several pies, including producing steel wire; designing and manufacturing seating support systems for automobiles; and making components for manufacturers of upholstered furniture, beds and other home furnishings.
Analysts expect flooring and office furniture to realize a slow sales recovery in 2021, as both commercial and retailer market conditions improve.
Although it's not a particularly famous company, it has been a dividend champion for long-term investors. Leggett & Platt's payout has gotten better for 48 consecutive years and in 56 of the past 57 years.
LEG last increased its dividend in May 2019, a 5.3% improvement to 40 cents per share. The company has yet to raise it since then, however, so income investors should keep close watch over this one.
Becton Dickinson
- Market value: $73.9 billion
- Dividend yield: 1.3%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 6 Strong Buy, 6 Buy, 6 Hold, 0 Sell, 0 Strong Sell
Medical devices maker Becton Dickinson (BDX, $254.17) bulked up quite a bit over the past five years. In 2015 it acquired CareFusion, a complementary player in the same industry. Then in 2017, it struck a $24 billion deal for fellow Dividend Aristocrat C.R. Bard, another medical products company with a strong position in treatments for infectious diseases.
Becton Dickinson, which makes everything from insulin syringes to cell analysis systems, is increasingly looking for growth to be driven by markets outside the U.S., including China. Analysts expect BDX to generate average annual earnings growth of about 8.5% for the next five years, according to S&P Global Market Intelligence.
BDX's last hike was a 5.1% uptick to 83 cents a share, announced in November 2020. Its annual dividend growth streak is nearing five decades – a track record that should offer peace of mind to antsy income investors.
Target
- Market value: $97.3 billion
- Dividend yield: 1.4%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 13 Strong Buy, 7 Buy, 8 Hold, 0 Sell, 1 Strong Sell
Target (TGT, $194.29) might be the No. 2 discount retail chain after Walmart in terms of revenue, but it doesn't take a back seat to the behemoth from Bentonville when it comes to dividends.
Target paid its first dividend in 1967, seven years ahead of Walmart, and has raised its payout annually since 1972. The last hike came in June 2020, when the retailer raised its quarterly disbursement by 3% to 68 cents a share.
With a payout ratio of 35%, income investors can count on Target to keep hitting the mark for dividend growth. As for earnings growth: Analysts are looking for an average annual improvement of more than 14% over the next three to five years.
Although it's still a relatively small part of TGT's top line, e-commerce revenue is soaring. Digital sales rose by more than 150% for the quarter ended Oct. 31 and doubled over the holiday selling season.
Abbott Laboratories
- Market value: $221.8 billion
- Dividend yield: 1.5%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 13 Strong Buy, 4 Buy, 2 Hold, 2 Sell, 0 Strong Sell
Abbott Laboratories (ABT, $125.15) manufactures a wide variety of healthcare goods. Its portfolio includes branded generic drugs, medical devices, nutrition and diagnostic products. Some of its best-known products include Similac infant formulas, Glucerna diabetes management products and i-Stat diagnostics devices.
The company has been expanding by acquisitions over the past few years, including medical-device firm St. Jude Medical and rapid-testing technology business Alere, both snapped up in 2017. Bulking up has been good for prospective profits. Analysts expect ABT to generate average annual earnings growth of 16.8% over the next three to five years, according to S&P Global Market Intelligence.
Abbott Labs dates all the way back to 1888. It first paid a dividend in 1924 – and has go on to declare 388 consecutive quarterly dividends ever since. Its dividend growth streak is long-lived too, at 49 years and counting. The last payout hike came in December – a whopping 25% improvement to 45 cents per share.
W.W. Grainger
- Market value: $19.7 billion
- Dividend yield: 1.6%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 6 Strong Buy, 1 Buy, 10 Hold, 2 Sell, 2 Strong Sell
W.W. Grainger (GWW, $374.69) – which not only sells industrial equipment and tools, but provides other services such as helping companies manage inventory – is expected to generate steady-if-not spectacular sales growth for the next few years.
Profitability, on the other hand, should move along at a more rapid clip. Analysts expect the company to have a long-term earnings growth rate of 11.8%
Fortunately for the income-minded, Grainger has achieved annual dividend growth for nearly half a century and maintains a reasonable 48% payout ratio. It renewed its Dividend Aristocrats membership card in July 2020, when it announced a 6% dividend increase to $1.53 per share.
In keeping with most of the best dividend stocks, GWW's payout is perennially covered by the company's ample free cash flow. In 2020, the company generated free cash flow after debt payments of $777 million. Dividends, meanwhile, came to just $338 million.
Kimberly-Clark
- Market value: $44.9 billion
- Dividend yield: 3.5%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 3 Strong Buy, 2 Buy, 11 Hold, 0 Sell, 2 Strong Sell
Kimberly-Clark's (KMB, $123.43) well-known brands include Huggies diapers, Scott paper towels and Kleenex tissues. Like other makers of consumer staples, Kimberly-Clark holds out the promise of delivering slow but steady growth along with a healthy dividend to drive total returns.
Kimberly-Clark has paid out a dividend for 84 consecutive years and has raised the annual payout for 49 consecutive years. In January 2021, the board of directors approved a 6.5% increase in the quarterly dividend to $1.14 a share. KMB also authorized a new $5 billion share repurchase program that supplements the current $5 billion authorization, which is expected to be completed later this year.
"These actions reflect the company's strong cash flow and growth prospects along with an ongoing commitment to return cash to shareholders," KMB said in its fourth quarter earnings report.
Analysts polled by S&P Global Market Intelligence expect KMB earnings to grow at an average annual rate of just 2.6% over the next three to five years. Pandemic-related weakness in its K-C Professional segment – which services office buildings, public restrooms and the like – and a strong dollar are largely to blame.
AbbVie
- Market value: $186.1 billion
- Dividend yield: 4.9%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 11 Strong Buy, 5 Buy, 6 Hold, 0 Sell, 0 Strong Sell
AbbVie (ABBV, $105.40) is one of the highest yielders on this list of the best payout-improving dividend stocks. The pharmaceutical company was spun off from fellow Dividend Aristocrat Abbott Laboratories in 2013.
Including its time as part of Abbott, AbbVie upped its annual distribution for 49 consecutive years. The last hike, declared in October 2020, was a 10.2% bump to $1.30 per share for the dividend payable in February 2021.
The company's best-selling treatments include Humira: a rheumatoid arthritis drug that has been approved for numerous other ailments, and that appears is on pace to surpass Lipitor as the best-selling drug of all time. AbbVie also makes cancer drug Imbruvica, as well as testosterone replacement therapy AndroGel.
The Street, which has a consensus Buy recommendation in shares, expects ABBV to generate average annual revenue growth of 4.9% over the next three to five years.
Sysco
- Market value: $38.9 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 51
- Analysts' opinion: 2 Strong Buy, 3 Buy, 8 Hold, 0 Sell, 1 Strong Sell
Few industries have been as hurt by the pandemic as Sysco (SYY, $76.21). Restaurant closures have hit it where it lives. Indeed, the food services company derives about 65% of its revenue from its restaurant supply business.
Analysts remain fairly confident that SYY has sufficient liquidity and access to credit to survive the current downturn. And it could be spring-loaded for growth once restaurants make a comeback.
The company's scale, built through years of acquisitions, should also help it through the crisis. A year ago, SYY bought Waugh Foods – an Illinois broadline distributor with approximately $40 million in annual sales. The company also picked up Upsys, J. Kings Food Service Professionals, and J&M Wholesale Meats last year.
Most importantly for income investors, Sysco should be able to extend its dividend growth streak. For the 12 months ended Dec. 31, it disbursed $916 million in dividends and still had free cash flow after debt payments of $1.7 billion.
Just note that SYY last raised its dividend in November 2019, by 15% to 45 cents per share. It needs to increase its payout this year to extend its annual dividend growth streak to 52 consecutive years and keep it in the Dividend Aristocrats. But investors will have to wait and see if that happens.
Stanley Black & Decker
- Market value: $28.1 billion
- Dividend yield: 1.6%
- Consecutive annual dividend increases: 53
- Analysts' opinion: 8 Strong Buy, 2 Buy, 8 Hold, 1 Sell, 0 Strong Sell
Power- and hand-toolmaker Stanley Black & Decker (SWK, $175.58) has paid a dividend for 144 years on an uninterrupted basis, and it has improved that cash distribution annually for more than half a century, including a penny increase to 70 cents per share in July 2020.
Analysts expect SWK to generate average annual earnings growth of more than 9% a year over the next half-decade, thanks to a strategy of growth through acquisitions and cost cuts.
Stanley Black & Decker bought Newell Tools – which includes the Lenox and Irwin brands – from Newell Brands (NWL) for $2 billion in 2016. In January 2017, it negotiated the purchase of the Craftsman tool brand from Sears Holdings (SHLDQ) for a total of $775 million over three years and a percentage of annual sales. Then in 2018, SWK announced the acquisition of IES Attachments for $690 million cash, and the $440 million purchase of Nelson Fastener Systems.
And last year SWK bought Boeing supplier Consolidated Aerospace Manufacturing for up to $1.5 billion.
A payout ratio of 37% and free cash flow that covered dividend payments by three to one last year should keep its streak going.
Federal Realty Investment Trust
- Market value: $7.0 billion
- Dividend yield: 4.6%
- Consecutive annual dividend increases: 53
- Analysts' opinion: 3 Strong Buy, 1 Buy, 11 Hold, 1 Sell, 0 Strong Sell
Real estate investment trusts such as Federal Realty Investment Trust (FRT, $93.02) are required to pay out at least 90% of their taxable earnings as dividends in exchange for certain tax benefits. Thus, REITs are well known as some of the best dividend stocks you can buy.
And few have been steadier than FRT, which owns retail and mixed-use real estate in several major metropolitan areas.
Although COVID-19 has pressured occupancy and leases, FRT has now hiked its payout every year for 53 years – the longest consecutive record in the REIT industry. The latest increase – a 1% improvement to the cash distribution – was announced in August 2020.
Hormel Foods
- Market value: $26.7 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 55
- Analysts' opinion: 0 Strong Buy, 0 Buy, 10 Hold, 2 Sell, 1 Strong Sell
Hormel Foods (HRL, $49.48) is best known for Spam, but it's also responsible for its namesake-branded meats and chili, Skippy peanut butter, Dinty Moore stews and House of Tsang sauces. And in February, HRL stock perked up when it was reported that it would buy Planters snack brand from Kraft Heinz (KHC) for $3 billion.
But it shouldn't go unnoticed that the packaged food company is about as reliable as they come when it comes to income investing, having raised its payout every year for more than five decades.
Indeed, in November, Hormel announced its 55th consecutive dividend increase – a 6% raise to 24.50 cents per share quarterly. The February 2021 payment represents the 370th consecutive quarterly dividend paid by the company. Hormel is rightly proud to note that it has paid a regular dividend without interruption since becoming a public company in 1928.
Meeting analysts' expectations for 5.7% average annual earnings growth for the next three to five years would go a long way toward keeping that streak alive.
Illinois Tool Works
- Market value: $64.3 billion
- Dividend yield: 2.2%
- Consecutive annual dividend increases: 57
- Analysts' opinion: 3 Strong Buy, 1 Buy, 14 Hold, 1 Sell, 2 Strong Sell
Founded in 1912, Illinois Tool Works (ITW, $203.30) makes construction products, car parts, restaurant equipment and more. While ITW sells many products under its namesake brand, it also operates businesses including Foster Refrigerators, ACME Packaging Systems and the Wolf Range Company.
In August 2020, Illinois Tool Works raised its quarterly dividend 6.5% to $1.14 cents a share. ITW says it returned $2.8 billion to shareholders in the form of dividends and share repurchases last year.
ITW has improved its dividend for 57 straight years. Its payout ratio of 65% is higher than many of the companies we've already covered, but it still leaves plenty of headroom for steady increases for years to come. After all, free cash flow for all of 2020 came to $2.6 billion, or 122% of net income. Note also that ITW repurchased $706 million of its own shares last year
Lowe's
- Market value: $130.3 billion
- Dividend yield: 1.3%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 16 Strong Buy, 7 Buy, 8 Hold, 1 Sell, 0 Strong Sell
When it comes to home improvement chains, Home Depot (HD), a member of the Dow Jones Industrial Average, gets all the glory. But rival Lowe's (LOW, $177.78) is the superior dividend grower.
Lowe's has paid a cash distribution every quarter since going public in 1961, and that dividend has increased annually for more than half a century. Most recently, in August 2020, Lowe's lifted its quarterly payout to 60 cents a share. Home Depot is a longtime dividend payer, too, but its string of annual dividend increases dates back only to 2010.
Chains such as Lowe's have been among the beneficiaries of the pandemic, as people stuck in their houses spend more time and money on home improvement projects.
Analysts expect Lowe's to deliver average annual earnings growth of almost 18% for the next five years, according to S&P Global Market Intelligence, which should help keep the dividend aloft.
Colgate-Palmolive
- Market value: $67.5 billion
- Dividend yield: 2.2%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 7 Strong Buy, 1 Buy, 11 Hold, 2 Sell, 1 Strong Sell
Colgate-Palmolive (CL, $78.70) sells a wide range of consumer staples brands including its namesake toothpaste and dish soap, as well as Speed Stick deodorant, Murphy cleaning products and Tom's of Maine personal-care products.
Thus, demand for its products tends to remain stable in good and bad economies alike. And in fact, it has seen business pick-up from higher consumer demand due to the COVID-19 pandemic. In 2020, revenue rose 7.5% to $4.3 billion.
Sales growth will likely moderate as the company laps the benefits from pantry loading and other impacts of the coronavirus, but the dividend should remain as stable as ever. CL disbursed $1.7 billion in dividends last year while generating more than $3 billion in free cash flow after debt payments.
The regular payout to shareholders dates back more than a century, to 1895, and has increased annually for 58 years. CL last raised its quarterly payment in March 2020, when it added 2.3% to 44 cents a share.
Johnson & Johnson
- Market value: $437.7 billion
- Dividend yield: 2.5%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 8 Strong Buy, 4 Buy, 7 Hold, 0 Sell, 0 Strong Sell
Johnson & Johnson (JNJ, $166.27), founded in 1886 and public since 1944, operates in several different segments of the healthcare 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 is currently going all in on combating the pandemic. JNJ officially asked the U.S. Food and Drug Administration for an emergency use authorization of its COVID-19 vaccine on Feb. 6. The single-shot vaccine could be a valuable tool in getting the virus under control.
A lot is resting on the success of the vaccine, but one thing that's not in doubt is JNJ's dividend. The healthcare giant last hiked its payout in April 2020, by 6.3% to $1.01 per share, extending its streak of consecutive annual dividend growth to 58 years.
With that sort of history, income investors can count on one of the best dividend stocks to hike its payout in 2021.
Coca-Cola
- Market value: $213.6 billion
- Dividend yield: 3.3%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 10 Strong Buy, 6 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Coca-Cola (KO, $49.70) has long been known for quenching consumers' thirst, but it's equally effective at quenching investors' thirst for income. The company's dividend history stretches back to 1920, and the payout has swelled for 58 consecutive years. The last hike, announced in February 2020, was admittedly modest, though, at 2.5% to 41 cents per share.
Coca-Cola has worked hard to expand its offerings beyond traditional carbonated beverages, adding bottled water, fruit juices, sports drinks and teas to its product lineup. In addition to the namesake Coca-Cola brand, KO also sports names such as Minute Maid, Powerade, Simply Orange and Vitaminwater.
And in 2018, it acquired Costa Coffee, which owns the popular Costa Coffee brand that operates in more than 30 countries.
Although the pandemic put a crimp on sales at restaurants, bars and live events, analysts are optimistic about KO's prospects, giving the stock a consensus recommendation of Buy.
Cincinnati Financial
- Market value: $14.0 billion
- Dividend yield: 2.9%
- Consecutive annual dividend increases: 61
- Analysts' opinion: 1 Strong Buy, 1 Buy, 2 Hold, 2 Sell, 0 Strong Sell
Cincinnati Financial (CINF, $87.18) sold off hard in last year's market crash and is still working its way back. The property and casualty insurer is off 23% over the past 52 weeks, hurt by the pandemic and an industry-wide jump in losses from wildfires, wind storms, hurricanes and other weather-related catastrophes.
But when it comes to dividend growth, CINF has shrugged it all off. It boasts one of the Dividend Aristocrats' longest streaks of annual dividend increases, which now stands at 61 consecutive years. The P&C insurer most recently lifted its quarterly payout in January 2021, by 5% to 63 cents a share.
Cincinnati Financial, whose offerings include life insurance, annuities, umbrella insurance and a wide range of business insurance products, is expected to see earnings per share rebound in fiscal 2021 after taking a step back due to COVID-19 and other losses.
3M
- Market value: $104.8 billion
- Dividend yield: 3.3%
- Consecutive annual dividend increases: 63
- Analysts' opinion: 2 Strong Buy, 2 Buy, 10 Hold, 2 Sell, 1 Strong Sell
Dow component 3M (MMM, $180.94), which makes everything from adhesives to electric circuits to N95 respirators, has been delivering annual dividend increases to investors for well more than half a century.
Although the pandemic created significant incremental sales growth for the company's personal safety, home improvement, general cleaning solutions, semiconductor, data centers, and biopharma filtration businesses, those endeavors account for only 20% of sales, analysts note.
Healthcare, which is MMM's largest and most profitable segment, has to come back from a drop in demand because of the curtailment of elective procedures. The conglomerate also saw weakness in the general industrial, commercial solutions and office supplies categories.
However, whatever the shorter-term holds for 3M's share price, investors can bank on the conglomerate's steady payouts over the long haul. 3M's dividend dates back more than a century and it can claim 63 consecutive years of growth. The most recent hike came in early February 2021 with a 1% increase to $1.48 per share.
Emerson Electric
- Market value: $51.5 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 11 Strong Buy, 3 Buy, 11 Hold, 0 Sell, 0 Strong Sell
Emerson Electric (EMR, $85.90) makes a wide variety of industrial products, ranging from control valves to electrical fittings.
The prolonged downturn in oil prices weighed on Emerson for a couple years as energy companies continued to cut back on spending. Happily, analysts now say Emerson is well-positioned to take advantage of a nascent recovery in the energy sector. Indeed, the stock has doubled the performance of the S&P 500 over the past six months.
Meanwhile, the Street upped its long-term profit forecasts. Earnings are expected to increase at an average annual rate of 10.2% over the next three to five years.
Emerson has paid dividends since 1956 and has boosted its annual payout for 64 consecutive years, including its last increase – 1% to 50.5 cents per share – in November 2020. EMR added that it plans to announce an increase of 2 cent for 2021.
Furthermore, Emerson intends to resume share repurchases this year in the amount of $500 million to $1 billion. The company suspended buybacks due to COVID-19.
Procter & Gamble
- Market value: $316.8 billion
- Dividend yield: 2.5%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 9 Strong Buy, 4 Buy, 10 Hold, 1 Sell, 0 Strong Sell
With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG, $128.67) is among the world's largest consumer products companies.
Although the economy ebbs and flows, demand for products such as toilet paper, toothpaste and soap tends to remain stable. At the moment, Procter & Gamble boasts 22 brands that generate at least $1 billion in annual revenues – and another 19 with sales of between $500 million and $1 billion.
That hardly makes P&G completely recession-proof, but as a defensive stock it did hold up better than the broader market for much of 2020. It also makes the grade as one of the best dividend stocks because it's an equity income machine, having made reliable dividend payments for more than a century.
The Dow Jones Industrial Average component has paid shareholders a dividend since 1890, and has raised its payout annually for 64 years in a row. P&G last increased its payout in April 2020, by 6% to 79.07 cents per share.
Genuine Parts
- Market value: $15.0 billion
- Dividend yield: 3.1%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 1 Strong Buy, 1 Buy, 10 Hold, 2 Sell, 0 Strong Sell
Automotive and industrial replacement parts maker Genuine Parts (GPC, $103.66) is best-known for the Napa brand. However, it also has deep roots in Mexico, where it operates under the AutoTodo brand, as well as Canada, where it operates as UAP.
Founded in 1928, Genuine Parts has long made returning cash to shareholders a priority.
The company has paid a cash dividend every year since going public in 1948 – or 64 consecutive years. The last hike – a nearly 4% improvement to 79 cents per share – came in February 2020.
Although the pandemic threw a wrench in its gears, bulls are optimistic about the years ahead. Gas prices are forecast to remain low, which enables consumers to put more miles on their cars – a key driver of auto-parts sales. Analysts also expect GPC to benefit from a growing number of vehicles on the road.
Dover
- Market value: $17.3 billion
- Dividend yield: 1.6%
- Consecutive annual dividend increases: 65
- Analysts' opinion: 5 Strong Buy, 3 Buy, 7 Hold, 0 Sell, 0 Strong Sell
Dividend growth has been a priority for Dover (DOV, $120.35), which at 65 consecutive years of annual distribution hikes boasts the longest such streak among this list of the best dividend stocks. Dover last raised its payout in August 2020, when it upped the quarterly outlay 2% to 49.5 cents a share from 49 cents a share.
The industrial conglomerate has its hands in all sorts of businesses, from Dover-branded pumps, lifts and even productivity tools for the energy business, to Anthony-branded commercial refrigerator and freezer doors.
It's not an exciting business, but it can be a remunerative one.
"Over the past five years (and especially the last three) DOV has meaningfully changed its business mix, improved its operations, market position and competitive advantages within the verticals served," says Baird equity research. "The net result is lower cyclicality, higher margins and improved return on capital."
