Buy-and-hold dividend growth investors know something that less experienced yield-hunters don't: It pays to be patient when you're investing for income.
The best dividend stocks – companies that raise their payouts like clockwork decade after decade – can produce superior total returns (price plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with.
That's because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day.
For example, let's say you buy a $100 stock that pays three bucks a year in dividends. That makes your dividend yield 3.0%. OK, that's not too shabby, but it's hardly anything to write home about when risk-free Treasury debt is yielding more than 4%.
But here's where relentless and reliable dividend growth comes in: Let's say this company in which you've invested your hard-earned cash increases its dividend by 10%, year after year after year after year.
In a decade's time, the dividend yield on your original cost basis will have grown to 7.8%. And it only gets better from there. After 20 years, your original investment of $100 will sport a dividend yield of more than 20%. Indeed, that one hundred bucks you plonked down two decades ago will generate $20.18 in annual income.
And after 25 years of dividend hikes? Your original $100 will generate $32.50 in annual income, or a yield of 32.5%. (We're talking returns from dividends alone in this example. Barring disaster, the value of your $100 equity investment will appreciate in price as well.)
It's called 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.
"Investing in companies with sustainable dividend growth can help augment total returns and reduce volatility while providing a growing income stream," write David Park and David Chalupnik, portfolio manager and head of U.S. active equities portfolio management, respectively, at Nuveen. "Dividend growth oriented companies have historically participated in up markets and helped to mitigate risk during periods of heightened volatility and market drawdowns."
Enter the S&P 500 Dividend Aristocrats
The Dividend Aristocrats are companies in the S&P 500 Index that have raised their payouts annually for at least 25 consecutive years. This list of the S&P 500's best dividend stocks is a mix of household names and more obscure firms, but they all play key roles in the American economy. And although they're scattered across pretty much every sector of the market, they do all share one thing in common: a commitment to reliable and long-term dividend growth.
If nothing else, the S&P 500 Dividend Aristocrats offered an effective way to play defense in 2022 – a year in which the S&P 500 logged its worst annual performance since the Great Financial Crisis of 2008. True, the Dividend Aristocrats index likewise finished the year in the red, but it held up far better than the broader market.
As you can see in the above chart, in 2022, the S&P 500 Dividend Aristocrats outperformed the S&P 500 by 24 percentage points on a total return basis (price change plus dividends).
S&P Dow Jones Indices rebalances the S&P 500 Dividend Aristocrats every January, and it's added three newcomers to the index for 2023: Nordson (NDSN), C.H. Robinson Worldwide (CHRW) and J. M. Smucker (SJM) joined the index prior to the market open on Feb. 1.
Here are the 67 S&P 500 Dividend Aristocrats. The following names 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.
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 as of May 26, 2023.
J.M. Smucker
- Consecutive annual dividend increases: 25
J.M. Smucker (SJM) is a well-known consumer staples stock thanks to the company's wide range of popular brands. Folgers and Dunkin' coffee, Jif peanut butter and Smucker's eponymous jams and jellies represent just a few of its offerings.
Perhaps less well known is that SJM is an equity income machine, having increased its dividend annually for 25 years, per S&P. Thanks to that track record, the stock was added to the Dividend Aristocrats on Feb. 1, 2023.
SJM's regular dividend hikes sure have come in handy. The stock's three-year annualized total return beats the broader market's performance by a wide margin. SJM has outperformed the S&P 500 on an its all-time total return basis, as well.
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C.H. Robinson Worldwide
- Consecutive annual dividend increases: 25
C.H. Robinson Worldwide (CHRW) provides freight transportation and logistics services to industries around the globe. It also delivers reliable increases to its dividend each and every year.
The company joins the Dividend Aristocrats on Feb. 1, 2023 by dint of its 25-year streak of payout hikes. The most recent increase was announced in November 2022 – a 10.9% bump in the disbursement to 61 cents per share quarterly.
CHRW stock has a mixed record when compared to the broader market over the longer term. Shares have outperformed the S&P 500 on an annualized total return basis over the past one- and three-year periods, but are laggards over the past five, 10 and 15 years. Going back 20 years, CHRW's annualized total return beats the S&P 500 by a bit more than 2 percentage points.
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Church & Dwight
- Consecutive annual dividend increases: 27
Consumer-staples company Church & Dwight (CHD) might not ring a bell with many retail investors, but they're certainly familiar with many of its wares. Arm & Hammer, OxiClean and Waterpik are just a few examples among dozens of its household brands.
Church & Dwight was founded in 1846 and is today the leading producer of baking soda in the U.S. Its stock was added to the S&P 500 index at the end of 2015.
The most recent hike came in February 2022 – a 3.8% bump to the quarterly payout to 27.25 cents per share.
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International Business Machines
- Consecutive annual dividend increases: 28
International Business Machines (IBM), 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, gaining membership to the Dividend Aristocrats in January 2021.
In April 2023, IBM raised the quarterly dividend by a penny to $1.66 per share, marking its 28th consecutive year of increases. IBM 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.
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Caterpillar
- Consecutive annual dividend increases: 28
Caterpillar (CAT), the world's largest maker of heavy construction and mining equipment, was added to the Dividend Aristocrats in January 2019.
CAT has paid a regular dividend without fail since 1933, and has lifted its payout every year for 28 years. Most recently, the company raised the dividend in June 2022, by 8% to $1.20 quarterly.
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, 2022, CAT had free cash flow after debt payments of $2.9 billion, and that was after disbursing $2.4 billion in dividends.
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NextEra Energy
- Consecutive annual dividend increases: 29
NextEra Energy (NEE) is a recent addition to the Aristocrats. The utility company was added to the elite group of dividend growers in January 2021.
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.
The company last raised its dividend in February 2023, by 10% to 46.75 cents per share per quarter.
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Brown & Brown
- Consecutive annual dividend increases: 29
Brown & Brown (BRO), which offers insurance brokerage services to both businesses and consumers, has been in operation since 1939, but its stock wasn't added to the S&P 500 until 2021.
Happily for long-term dividend growth investors, BRO's inclusion in the main benchmark for U.S. equity performance also opened the door to the Dividend Aristocrats. Brown & Brown was added to the elite list of equity income stalwarts in 2022, thanks to its nearly three-decade streak of annual dividend increases.
BRO's most recent hike was announced in October 2022 – a 12.2% increase in the quarterly distribution to 11.50 cents per share.
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Essex Property Trust
- Consecutive annual dividend increases: 29
Essex Property Trust (ESS), which was added to the Dividend Aristocrats in 2020, is a real estate investment trust (REIT) that invests in apartments primarily on the West Coast.
The REIT went public in 1994 and has been hiking its payout ever since. The most recent increase came in February 2023, when ESS lifted the quarterly dividend by 5.0% to $2.31 per share.
Thanks to its steady and generous stream of dividend hikes, Essex boasts an 10-year compound annual dividend growth rate of 7.2%.
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Albemarle
- Consecutive annual dividend increases: 29
Albemarle (ALB), which manufactures specialty chemicals such as lithium, most recently hiked its dividend in February 2023 – a 1.3% raise to 40 cents per share quarterly.
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.
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Chubb
- Consecutive annual dividend increases: 30
Chubb (CB) was added to the Dividend Aristocrats in January 2019. The insurance company last raised its payout in May 2023, by 3.6% to 86 cents a share per quarter. With that move, Chubb notched its 30th 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.
And Chubb's steady dividend increases really do add up over time. The stock has outperformed the broader market by more than 3 percentage points over the past 20 years on an annualized total return basis.
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Expeditors International of Washington
- Consecutive annual dividend increases: 30
Expeditors International of Washington (EXPD) was added to the Aristocrats in January 2020. The logistics company last raised its semiannual dividend in May 2023, to 69 cents a share from 67 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 EXPD. And then COVID-19 disrupted airfreight tonnage volumes and ocean container shipments.
Through it all, however, EXPD remained committed to its semiannual dividend, which it has hiked every year for more than a quarter-century. A consistently low payout ratio 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.
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Realty Income
- Consecutive annual dividend increases: 30
Realty Income (O) 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 6,700 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 58 industries.
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 4.3% since 1994.
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A.O. Smith
- Consecutive annual dividend increases: 30
A.O. Smith (AOS), a manufacturer of commercial and residential water heaters, is a relatively recent addition to the Dividend Aristocrats, entering the club in 2018. In October 2022, it announced an 7% raise in its quarterly payout to 30 cents per share. That marked a 30th consecutive year of dividend hikes for the industrial firm.
As a result, the five-year compound annual growth rate of AOS' dividend now stands at more than 15%.
With ample free cash flow and a below-average payout ratio, investors can count on AOS to keep the dividend increases coming.
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Linde
- Consecutive annual dividend increases: 30
Linde (LIN) 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 February 2022 – a 10% bump in the quarterly payout to $1.17 per share. The company also authorized a new $10 billion share repurchase program.
With ample free cash flow after debt-service payments, Linde should have plenty of firepower to keep its dividend-growth streak alive.
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West Pharmaceutical Services
- Consecutive annual dividend increases: 30
West Pharmaceutical Services (WST) was added to the Dividend Aristocrats in January 2021 in recognition of its long history of annual increases.
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 demand for COVID-19 vaccines is boosting demand for the firm's products. Meanwhile, the biopharmaceutical industry's robust pipeline should support longer-term growth.
The firm last raised the dividend in October 2022 – a 5.6% increase in the quarterly payout to 19 cents per share. Ample free cash flow and a low payout ratio should reassure shareholders that the annual dividend increases will keep coming.
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Ecolab
- Consecutive annual dividend increases: 31
Ecolab (ECL) 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. That's thanks in no small part to 31 consecutive years of dividend increases. ECL's most recent hike came in December 2022, with a 4% increase in the quarterly payment to 53 cents per share.
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Roper Technologies
- Consecutive annual dividend increases: 31
Roper Technologies (ROP) – an industrial company whose businesses include medical and scientific imaging, RF technology and software, and energy systems and controls, among others – has been an equity income machine for more than three decades.
The most recent hike was declared in November 2022, when Roper lifted the quarterly payout by 10%, to 68.25 cents per share.
A combination of acquisitions, organic growth and stronger margins have helped Roper juice its dividend without stretching its profits. And while the yield might not look like much, patient investors have come to appreciate what ROP's steady dividend increases have done for their returns.
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General Dynamics
- Consecutive annual dividend increases: 32
Defense contractor General Dynamics (GD) was added to the elite list of best dividend stocks for dividend growth in 2017.
Generous military spending has helped fuel this dividend stock's steady stream of cash returned to shareholders. Indeed, General Dynamics has upped its distribution for more than three decades now.
The last increase was announced in March 2023, when GD lifted the quarterly payout by 4.8% to $1.32 a share. With its below-average payout ratio of 34%, General Dynamics should have sufficient room for more dividend growth.
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Chevron
- Consecutive annual dividend increases: 36
Chevron (CVX) is an integrated oil giant that also has operations in natural gas and geothermal energy. It also happens to be the lone energy-sector name among the 30 stocks in the Dow Jones Industrial Average.
Analysts praise Chevron for having the strongest financial base in its peer group, a highly attractive portfolio of assets, and the "most straightforwardly positive risk/reward profile" of any stock in its sub-sector.
Perhaps most important for income investors, CVX has more than three decades of uninterrupted dividend growth under its belt, and management has said it will protect the payout at all costs. Chevron's last increase was announced in January 2023 with a 6% bump in the quarterly dividend to $1.51 per share. Additionally, CVX announced a new $75 billion share repurchase program.
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Atmos Energy
- Consecutive annual dividend increases: 36
Atmos Energy (ATO), 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 nine 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.
Atmos clinched its 36th straight year of dividend growth in November 2022, when it announced an 8.8% increase to 74 cents a share per quarter.
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Cardinal Health
- Consecutive annual dividend increases: 37
A steady stream of acquisitions helped wholesale drug and medical device distributor Cardinal Health (CAH) become the giant that it is today. Its most recent acquisition – a $2.2 billion all-stock deal for Bindley Western Industries – closed in early 2021.
Like the rest of the medical device industry, CAH faced challenges during the pandemic as patients put off elective surgeries. But the company still managed to generate ample free cash flow and the dividend increases such cash flow supports.
Indeed, Cardinal Health has upped the ante on its annual payout for 37 years and counting. The Aristocrat last raised its disbursement in May 2023, declaring a 1% increase in the quarterly dividend to 50.06 cents per share from 49.57 cents per share.
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T. Rowe Price
- Consecutive annual dividend increases: 37
Asset managers such as T. Rowe Price (TROW) have been losing market share to indexed funds of the type Vanguard offers, but the company still boasts a massive (and growing) $1.3 trillion in assets under management (AUM).
Strong performance from actively managed funds and the firm's focus on the growing retirement market are just two factors boosting AUM, analysts note.
T. Rowe Price has improved its dividend every year for 37 years, including a 1.7% increase to the payout announced in February 2023. Given its track record as one of the best dividend stocks, investors can expect a 38th consecutive dividend hike in 2024.
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McCormick & Co.
- Consecutive annual dividend increases: 37
McCormick (MKC) – the maker of herbs, spices and other flavorings – has been bulking up with acquisitions over the years to drive sales growth, and the deals have been paying off.
The strategy should to provide support for McCormick's dividend, which has been paid for 99 consecutive years and raised annually for 37. MKC last declared an increase to its dividend in November 2022 – a 5.4% raise to the quarterly payment to 39 cents per share.
With ample free cash flow and a reasonable payout ratio, MKC has been able to generate a five-year compound annual dividend growth rate of 9%.
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Brown-Forman
- Consecutive annual dividend increases: 39
Brown-Forman (BF.B) 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.
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 39 consecutive years and has been delivered without interruption for 79. Most recently, Brown-Forman last upped the quarterly ante in November 2022, by 9% to 20.55 cents per share.
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Cintas
- Consecutive annual dividend increases: 39
Cintas (CTAS) 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 tends to move ahead of any pick-up in hiring during and economic recovery. Indeed, CTAS has worked pretty well as a proxy for employment in the past.
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. However, those have been annual distributions up until this year, when the company switched to quarterly payouts.
Most recently, in July 2022, CTAS raised its quarterly dividend by 21.1% to $1.15 per share.
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Amcor
- Consecutive annual dividend increases: 40
Amcor (AMCR) 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 November 2022, by 2.1% to 12.25 cents a share per quarter. Ample free cash flow and a reasonable payout ratio should help ensure that the annual dividend increases keep on coming.
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Exxon Mobil
- Consecutive annual dividend increases: 40
Exxon Mobil (XOM) remains one of the world's largest energy companies and is the biggest oil company by market value in the U.S. However, it was removed from the blue-chip Dow Jones Industrial Average in August 2020.
This dividend stalwart and its various predecessors have strung together uninterrupted payouts since 1882. To its credit, XOM was one of the few energy companies that didn't cut or suspend its payout amid the pandemic-caused crash in oil prices.
That said, it did put a temporary pause on its dividend growth.
The Dow component's quarterly distribution remained unchanged in 2020 amid the COVID-19 crisis. Fortunately for shareholders, membership in the Dividend Aristocrats is based on consecutive increases to the annual payout; a 3.4% bump to the dividend in October 2022 to 91 cents per share per quarter ensured that XOM will have a higher annual payout than in 2021, and thus remain in the club.
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Air Products & Chemicals
- Consecutive annual dividend increases: 41
Air Products & Chemicals (APD) 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 41 years in a row. That includes an 8% upgrade in January 2023 to $1.75 a share.
"In 2023, we expect to pay out more than $1.5 billion to our shareholders, a further testament to the continued strength and stability of our business in a challenging macroeconomic environment," CEO Seifi Ghasemi said in a press release at the time.
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Aflac
- Consecutive annual dividend increases: 41
Aflac (AFL) 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.
Although the COVID-19 pandemic slammed the insurance industry, AFL stock returned to pre-crash levels by early 2021, helped by the market's confidence in its dividend. And with a conservative payout ratio and four straight decades of dividend growth, that confidence is indeed well placed.
Aflac last raised its payout in November 2022, upping the quarterly distribution by 5% to 42 cents per share. And in addition to regular dividend increases, Aflac buys back a lot of its own stock. In 2022 alone, the company repurchased 39.2 million of its common shares for $2.4 billion.
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Nordson
- Consecutive annual dividend increases: 42
Nordson's (NDSN) addition to the Dividend Aristocrats on Feb. 1, 2023, boosted the industrial sector's representation in the equity income benchmark.
The company designs and manufactures systems that dispense, apply and control fluids like adhesives, coatings and sealants. As such, Nordson's customers are found in industries ranging from food packaging and biotechnology to aerospace and semiconductor manufacturing.
Although the yield on the payout might not wow investors, Nordson's epic streak of dividend increases certainly proves the company's commitment to returning cash to shareholders. S&P says the company has hiked its payout for 42 consecutive years. By Nordson's count, it's raised the dividend for 59 straight years.
(Either way, Nordson became eligible for inclusion to the Dividend Aristocrats when it was added to the S&P 500 in February 2022.)
Either way, those regular bumps to the dividend have helped NDSN become a long-time market beater. Indeed, shares have outperformed the broader market on an annualized total return basis over the past one, three, five, 10, 15 and 20 years.
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Franklin Resources
- Consecutive annual dividend increases: 42
The name Franklin Resources (BEN) 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 $1.4 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.
Meanwhile, 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 3.4% hike to 30 cents per share quarterly announced in December 2022.
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Sherwin-Williams
- Consecutive annual dividend increases: 44
Thanks to its 2017 acquisition of Valspar, Sherwin-Williams (SHW) is one of the largest paints, coatings and home-improvement companies in the world.
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. The most recent hike came in February 2023 with an 8.3% increase to the quarterly payment to 65 cents per share.
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Clorox
- Consecutive annual dividend increases: 45
Clorox (CLX), whose brands include its namesake bleaches and cleansers, Glad trash bags and Hidden Valley salad dressing, won't blow investors away with its long-term total returns.
Rather, this consumer staples giant is all about defense and dividends. And, indeed, the dependable and defensive nature of Clorox's business has allowed the company to raise its annual dividend for more than four decades. The most recent hike came in July 2022 with a 2% bump to $1.18 per share per quarter.
CLX boasts a reasonable payout ratio and ample free cash flow, which should ensure a 46th consecutive increase to the dividend in 2023.
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Medtronic
- Consecutive annual dividend increases: 46
Medtronic (MDT), one of the world's largest makers of medical devices, is an income machine. Most recently, in May 2023, MDT lifted its quarterly payout by 1.5% to 69 cents per share.
Such increases are typical of the firm. Medtronic's dividend per share has grown by 38% over the past 5 years and by 146% over the past 10 years.
Heck, over the past 46 years, MDT delivered a compound annual growth rate of 16% on its dividend.
All told, MDT returned $4 billion in cash to shareholders in fiscal 2023. The company has pledged to return a minimum of 50% of its free cash flow to shareholders, primarily through dividends.
MDT is able to steer generous sums of 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.
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McDonald's
- Consecutive annual dividend increases: 46
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) 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.
MCD last raised its dividend in October 2022, when it lifted the quarterly payout by 10% to $1.52 a share. That marked its 46th consecutive annual increase. The company's 10-year compound annual dividend growth rate stands at 7%. And over the past 20 years? The CAGR tops 17%.
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Pentair
- Consecutive annual dividend increases: 47
U.K.-based water-treatment company Pentair (PNR) 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 47 straight years, most recently in December 2022, by 4.8% to 22 cents per share quarterly. A modest payout ratio and consistently ample free cash flow helps ensure that Pentair will continue to be one of the best dividend stocks.
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Walgreens Boots Alliance
- Consecutive annual dividend increases: 47
Tracing its roots back to a single drugstore founded in 1901, Walgreens Boots Alliance (WBA) has boosted its dividend every year for more than four decades. Mostly recently, in July 2022, it raised the quarterly payout by 0.5% to 48 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 359 straight quarters, or more than 89 years.
WBA has been a component of the Dow Jones Industrial Average since 2018.
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Automatic Data Processing
- Consecutive annual dividend increases: 48
Automatic Data Processing (ADP) is the world's largest payroll processing firm, responsible for paying nearly 40 million employees and serving more than 1 million clients across 140 countries.
Through good economic times and bad, one of ADP's great advantages is its "stickiness." After all, it's complicated 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.
ADP's most recent dividend increase came in November 2022 when it lifted the quarterly payout 20% to $1.25 per share. The company's 10-year compound annual dividend growth rate stands at more than 10%.
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Lowe's
- Consecutive annual dividend increases: 49
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) 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 nearly half a century. Most recently, in May 2023, Lowe's lifted its quarterly payout by 5% to $1.10 per share. Home Depot is a longtime dividend payer, too, but its string of annual dividend increases dates back only to 2010.
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Consolidated Edison
- Consecutive annual dividend increases: 49
Consolidated Edison (ED) 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. The longtime Dividend Aristocrat has hiked its annual distribution without interruption for close to five decades. In January 2023, the utility raised its quarterly payout 2.5% to 81 cents per share.
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Walmart
- Consecutive annual dividend increases: 50
The world's largest company by revenue might not pay the biggest dividend, but it sure is consistent. Walmart (WMT) has been delivering meager penny-per-share increases to its quarterly dividend since 2014, including February 2023's bump to 57 cents per share.
But that's been enough to maintain its 50-year streak of consecutive dividend increases. WMT's annualized payout now stands at $2.28 per share, up 1.8% from the $2.24 per share it returned the prior year.
And shareholders can count on the increases to keep coming. The discount retailer, which operates approximately 11,400 stores and e-commerce websites under 54 banners in 26 countries, is a cash machine. WMT has generated average annual levered free cash flow of more than $13 billion over the past five years.
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Archer Daniels Midland
- Consecutive annual dividend increases: 50
Archer Daniels Midland (ADM) 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 200 countries served by more than 800 facilities.
Archer Daniels Midland has paid out dividends on an uninterrupted basis for 89 years. The most recent hike came in January 2023, when ADM increased the quarterly payout by 12.5% to 45 cents a share. The move extended the dividend stock's streak of annual raises to 50 years.
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S&P Global
- Consecutive annual dividend increases: 50
Formerly known as McGraw Hill Financial, S&P Global (SPGI) 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 has increased its disbursement annually for nearly half a century. Most recently, in January 2023, SPGI raised its quarterly payout by a healthy 5.9% to 90 cents a share. The company generated levered free cash flow of $3.9 billion for the 12 months ended Sept. 30, 2022. That was after paying out $935 million in dividends.
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Nucor
- Consecutive annual dividend increases: 50
Nucor (NUE) is the largest U.S. steelmaker, but it's perhaps even more well known for its almost unrivaled commitment to dividend growth. As one of the best dividend stocks, Nucor has increased its dividend for 50 straight years, or every year since it began paying dividends in 1973.
The most recent increase came in December 2022 when NUE lifted the quarterly disbursement by 2% to 51 cents per share. Nucor returns an average of about $480 million in cash to shareholders in dividends alone, year in and year out.
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VF Corp.
- Consecutive annual dividend increases: 50
VF Corp. (VFC) is an apparel company with a large number of brands under its umbrella, including The North Face outdoor products, Timberland boots and Eastpak backpacks.
Importantly, as acquisitive as VFC has traditionally been, it's never been shy about tailoring its portfolio to maintain maximum profitability. In 2019, the company spun off its jeans business to shareholders via the publicly traded Kontoor Brands (KTB). The following year VFC acquired streetwear brand Supreme, but also divested its occupational workwear brands and business.
That sort of flexibility helps the company maintain the free cash flow required to keep the dividend increases coming.
However, VFC ran into a bit of trouble in 2022, as both revenue and earnings per share missed Wall Street's forecasts for the full year. Shares had a tough time as well, losing more than 60% of their value.
In order to tighten up its finances, in early February 2023, the company cut its quarterly dividend by 41% to 30 cents per share. VFC will have to make that up at a later date in order to extend its streak of dividend increases and remain a member of the Dividend Aristocrats. Stay tuned!
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PepsiCo
- Consecutive annual dividend increases: 51
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. Indeed, Grand View Research forecasts the global market for fizzy drinks to produce a compound annual growth rate of 4.7% through 2028.
Besides, PepsiCo (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.
The bottom line? PEP's business remains fundamentally strong, and that should keep its dividend-growth streak intact. PepsiCo declared its 51st straight annual increase in February 2023 with a 10% bump in the annnualized dividend to $5.06 per share.
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Kimberly-Clark
- Consecutive annual dividend increases: 51
Kimberly-Clark's (KMB) 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 raised the annual payout for 51 consecutive years. In January 2023, the board of directors approved a 1.7% increase in the quarterly dividend to $1.18 a share. KMB generated $1.9 billion in levered free cash flow for the 12 months ended Dec. 31, 2022. That's after paying out a total of $1.6 billion in dividends.
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Abbott Laboratories
- Consecutive annual dividend increases: 51
Abbott Laboratories (ABT) 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.
Abbott Labs dates all the way back to 1888. It first paid a dividend in 1924 and its dividend growth streak is long-lived too, at 50 years and counting. The last payout hike came in December 2022 — an 8.5% increase to 51 cents per share quarterly.
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Becton Dickinson
- Consecutive annual dividend increases: 51
Medical devices maker Becton Dickinson (BDX) has bulked up quite a bit over the past few 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.
As a result of all that M&A, BDX boasts a highly diversified portfolio of products – and the ample free cash flow needed to support continued dividend growth. BDX last raised its payout in November 2022 with a 4.6% raise to the quarterly dividend to 91 cents a share.
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AbbVie
- Consecutive annual dividend increases: 51
AbbVie (ABBV) 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 has upped its annual distribution for 51 consecutive years. The most recent hike – an 5% increase to the quarterly payment to $1.48 per share – was declared in October 2022.
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.
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Illinois Tool Works
- Consecutive annual dividend increases: 51
Founded in 1912, Illinois Tool Works (ITW) 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 2022, Illinois Tool Works raised its quarterly dividend by 7% to $1.31 cents a share, bringing its streak of annual increases to 51 years. However, the company notes that excluding a period of government controls in 1971, that streak would stretch to 58 years. Either way, ITW's dividend sports a 10-year compound annual growth rate of 13%.
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PPG Industries
- Consecutive annual dividend increases: 51
PPG Industries (PPG) makes coatings and paints for numerous industries, including aerospace, architecture, automotive and packaging. Its sprawling operations employ roughly 47,000 people in more than 50 countries.
PPG has paid a dividend since 1899 and has raised it annually for 51 years. A below-average payout ratio and solid outlook for long-term earnings growth should keep the dividend increases coming. PPG's last raise came in July 2022 with a 5.1% bump in the quarterly distribution to 62 cents per share.
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Target
- Consecutive annual dividend increases: 51
Target (TGT) 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 2022, when the retailer raised its quarterly disbursement by a whopping 20% to $1.08 a share.
With its well-below-average payout ratio, income investors can count on Target to keep hitting the mark for dividend growth. That has certainly been the case historically. Over the past 10 years, the company's dividend boasts a compound annual growth rate of more than 14%.
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W.W. Grainger
- Consecutive annual dividend increases: 51
W.W. Grainger (GWW) – 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. EPS growth, however, is forecast to increase at a double-digit percent rate.
Happily for the income-minded, Grainger has achieved annual dividend growth for a half century and maintains a below-average payout ratio. It renewed its Dividend Aristocrats membership card in April 2022 when it announced a 6.2% increase in the quarterly payout to $1.72 per share.
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Sysco
- Consecutive annual dividend increases: 53
Years of acquisitions have made Sysco (SYY) the food services and supply giant it is today. And the company's scale really came in handy during the pandemic, when it had to weather the closure of restaurants, bars and other food-service venues.
Happily for shareholders, the sudden and sharp downturn couldn't stop SYY from hiking its dividend for a 53rd consecutive year. The company last raised its payout in April 2022 with a 4.3% bump to 49 cents per share per quarter.
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Federal Realty Investment Trust
- Consecutive annual dividend increases: 55
Real estate investment trusts such as Federal Realty Investment Trust (FRT) 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. Federal Realty Investment Trust has now hiked its payout every year for 55 years – the longest consecutive record in the REIT industry. It's latest increase – upping the quarterly dividend by a penny to $1.08 per share – was announced in August 2022.
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Stanley Black & Decker
- Consecutive annual dividend increases: 55
Power- and hand-toolmaker Stanley Black & Decker (SWK) has improved its cash distribution annually for more than half a century, including a 1.3% increase to 80 cents per share quarterly in July 2022.
SWK has bulked up through a series of deals over the past five years or so, including the acquisitions of Newell Tools, the Craftsman tool brand, IES Attachments, Nelson Fastener Systems and Consolidated Aerospace Manufacturing.
A low payout ratio and ample free cash flow should keep it SWK's dividend growth streak going.
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Hormel Foods
- Consecutive annual dividend increases: 57
Hormel Foods (HRL) is best known for Spam, but it's also responsible for its namesake meats and chili, Skippy peanut butter, Dinty Moore stews and House of Tsang sauces, among other brands.
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 2022, Hormel announced its 57th consecutive dividend increase – a 6% raise to 27.5 cents per share quarterly. The packaged foods company is rightly proud to note that it has paid a regular dividend without interruption since becoming a public company in 1928.
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Johnson & Johnson
- Consecutive annual dividend increases: 60
Johnson & Johnson (JNJ), founded in 1886 and public since 1944, operates in several different segments of the healthcare industry. In addition to pharmaceuticals, it also manufactures medical devices.
JNJ's diversification across mutiple segments adds fortitude to this defensive dividend stock, and that helps income investors sleep better at night. The healthcare giant has increased its payout for three decades and counting. The most recent hike came in April 2022 when JNJ increased the quarterly dividend by 6.6% to $1.13 per share.
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Colgate-Palmolive
- Consecutive annual dividend increases: 61
Colgate-Palmolive (CL) 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.
Demand for Colagte's products tends to remain stable in both good economic times and bad, and that drives the free cash flow need to maintain its dividend growth streak.
And what a streak it is. Colgate's dividend dates back more than a century, to 1895, and the company has increased it annually for 61 years. CL last raised its payment in March 2023, upping the quarterly distribution by 2.1% to 48 cents per share.
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Coca-Cola
- Consecutive annual dividend increases: 61
Coca-Cola (KO) 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 61 consecutive years. The most recent hike, announced in February 2023, lifted the quarterly dividend by 4.5% to 46 cents per share.
KO disbursed $7.6 billion in dividends in 2022. Over the past 10 years, the company has paid out a total of $63.8 billion in dividends to shareholders.
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.
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Cincinnati Financial
- Consecutive annual dividend increases: 63
Property and casualty insurer Cincinnati Financial's (CINF) offerings include life insurance, annuities, umbrella insurance and a wide range of business insurance products.
Shares took a beating during the worst of the pandemic, but went on to beat the broader market handily over the next couple of years. And even when CINF stock was bottoming out, investors knew they could count on their dividends. Indeed, at 63 consecutive years and counting, Cincinnati Financial boasts one of the longest dividend growth streaks of any Dividend Aristocrat.
The P&C insurer most recently lifted its quarterly payout in January 2023, by 8.7% to 75 cents per share.
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3M
- Consecutive annual dividend increases: 65
Shares in 3M (MMM), which makes everything from adhesives to electric circuits to N95 respirators, have been a long-time market laggard. But as much as this Dow stock has been a disappointment in terms of price appreciation, there's no questioning its value as a compounding source of income.
Indeed, the conglomerate's dividend dates back more than a century. Even better, 3M has been delivering annual dividend increases to investors for 65 years. The most recent hike came in early February 2023 when the company bumped the quarterly payout by a penny to $1.50 per share.
MMM notes that it has returned more than $14 billion to shareholders through dividends and share repurchase over the past three years.
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Procter & Gamble
- Consecutive annual dividend increases: 66
With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG) 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. That hardly makes P&G completely recession-proof, but it does make the grade as one of the best dividend stocks because it's an equity income machine.
The Dow Jones Industrial Average component has paid shareholders a dividend since 1890, and has raised its payout for 66 years in a row. P&G's most recent raise came in April 2022 with a 5% bump to 91.33 cents per share quarterly.
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Genuine Parts
- Consecutive annual dividend increases: 67
Automotive and industrial replacement parts maker Genuine Parts (GPC) 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 67 consecutive years. The last hike – a 6.1% improvement to 95 cents per share quarterly – came in February 2023.
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Emerson Electric
- Consecutive annual dividend increases: 66
Emerson Electric (EMR) makes a wide variety of industrial products, ranging from control valves to electrical fittings.
The company has paid dividends since 1956 and has boosted its annual payout for 66 consecutive years, including its last increase – a 1% bump to 52 cents per share quarterly – declared in October 2022. EMR's dividend sports a 20-year compound annual growth rate of 5%.
With a below-average payout ratio and plenty of free cash flow, investors can count on Emerson Electric to keep the dividend hikes coming.
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Dover
- Consecutive annual dividend increases: 67
Dividend growth has long been a top priority for Dover (DOV). Indeed, 67 consecutive years of annual dividend increases is proof positive of the company's commitment to returning cash to shareholders.
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.
Dover last raised its payout in August 2022, when it upped the quarterly outlay by 1% to 50.5 cents per share.
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