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All Contents © 2019The Kiplinger Washington Editors
By Jeffrey R. Kosnett, Senior Editor
| August 11, 2014
A regular paycheck isn’t the only way to ensure a steady flow of income. By carefully selecting stocks that pay dividends on the right schedule, you can build a portfolio that guarantees cash every month. Here are a dozen great stocks that do just that.
All data as of May 4, 2015.
Yield (as of August 4): 2.9%
52-week high: $105.64
52-week low: $84.91
5-year dividend growth rate: 13.6%
Last dividend increase: 12.5% in February 2014
Also pays in: April, July, October
Occidental Petroleum (OXY) is primarily a domestic oil and gas producer, with much of its exploration in California and in shale formations in Texas and North Dakota. It differs from some other large oil companies in that it doesn't have a low-profit refining and marketing business. It also says, emphatically, in its investor presentations that increasing its dividend is a higher priority than making acquisitions, buying back stock or piling up reserves.
Yield (as of August 4): 5.1%
52-week high: $45.84
52-week low: $36.58
5-year dividend growth rate: 5.1%
Last dividend increase: 0.2% in June 2014
Also pays in: Every month
This real estate investment trust pioneered the strategy of buying or building free-standing drugstores, restaurants, cinemas, fitness centers and similar buildings and leasing them to familiar chains, which pay the rent, maintenance and taxes. Realty Income (O) pays dividends every month and raises the rate several times a year, though slowly and usually by small amounts. The REIT is safe and consistent, with more than 500 consecutive monthly dividends to its credit.
Yield (as of August 4): 2.6%
52-week high: $34.83
52-week low: $21.89
5-year dividend growth rate: 10.0%
Last dividend increase: 7.1% in September 2012
Also pays in: June, September, December
Intel (INTC), which makes semiconductors and processors, is one of tech’s most committed dividend-payers, though its last increase was in 2012. Intel is fighting slowing growth in sales of desktop and laptop computers--its largest sources of sales and profits—and as it makes inroads into smartphones and tablets, its cash flow will grow and higher dividends should follow.
Yield (as of August 4): 2.2%
52-week high: $73.79
52-week low: $62.75
5-year dividend growth rate: 9.0%
Last dividend increase: 8.8% in November 2013
Also pays in: July, October, January
The world’s leading maker of spices and flavorings, McCormick (MKC) grows steadily in part by taking over competitors’ brands and introducing American favorites to the rest of the world. Its profit margin is more than twice that of the meatpackers whose steaks and chops star in McCormick’s recipes. Plus, the company has little debt.
Yield (as of August 4): 3.2%
52-week high: $85.82
52-week low: $73.61
5-year dividend growth rate: 7.9%
Last dividend increase: 7.0% in April 2014
Also pays in: August, November, February
Procter & Gamble (PG) is the archetypal solid, predictable, low-stress growth stock. It is so huge that a 7% to 10% dividend growth rate may be all you can expect — but that's good enough considering that it usually yields more than 3%.
Yield (as of August 4): 2.3%
52-week high: $82.25
52-week low: $66.23
5-year dividend growth rate: 27.0%
Last dividend increase: 39.1% in June 2014
Also pays in: Every month
Smaller and mid-sized companies have joined the rush to pay higher dividends and WisdomTree MidCap ETF (DON) is a convenient way to sample 400 of them, spanning the economy from utilities to REITs to energy to retail. The fund pays dividends each month, joining Realty Income as 12-time payers in this model portfolio.
Yield (as of August 4): 3.2%
52-week high: $114.45
52-week low: $91.44
5-year dividend growth rate: 7.0%
Last dividend increase: 3.7% in February 2014
Also pays in: October, January, April
The maker of Kleenex, Huggies and Scott paper products resembles Procter & Gamble in that it makes familiar household products and sells them in more than 100 countries. Kimberly-Clark (KMB) has raised dividends every year since the early 1970s and aims to maintain a higher dividend yield than most other industrial and consumer-product companies.
Yield (as of August 4): 4.0%
52-week high: $38.58
52-week low: $28.75
5-year dividend growth rate: 28.5%
Last dividend increase: 25% in May 2013
Also pays in: November, February, May
Potash is fertilizer and this Canadian firm could be spreading it on its dividends to produce bigger and higher checks for investors pocket. Five years ago Potash (POT) paid 3 cents a quarter. Now the dividend is 35 cents, four times a year. The world doesn’t have many sources of this essential resource and while the price can swing like any mineral, the dividend is secure.
Yield (as of August 4): 2.8%
52-week high: $106.74
52-week low: $85.50
5-year dividend growth rate: 7.4%
Last dividend increase: 6.1% in April 2014
Also pays in: December, March, June
A blue-chip cash machine with a great group of global health businesses, Johnson & Johnson (JNJ) grows just enough to raise dividends between 5% and 10% a year while the shares almost never misbehave. This is the way the stock market is supposed to work for patient, loyal investors.
Yield (as of August 4): 2.4%
52-week high: $83.82
52-week low: $69.76
5-year dividend growth rate: 7.8%
Last dividend increase: 10.3% in November 2013
Also pays in: January, April, July
Automatic Data Processing (ADP) is a giant payroll processor and also administers employee-benefits programs. It also profits by investing money it holds for employers before paychecks are cashed and deposited, so even a small rise in interest rates would make it richer. ADP is a financial fortress with $1.7 billion of its own cash and little debt.
Yield (as of August 4): 2.1%
52-week high: $122.17
52-week low: $82.23
5-year dividend growth rate: 10.3%
Last dividend increase: 10.7% in March 2014
Also pays in: February, May, August
A defense industry powerhouse, General Dynamics (GD) also makes private jet planes and offers information-technology management services. Cuts in the military budget (whether rumored or actual) haven’t stopped it from raising dividends briskly every year.
Yield (as of August 4): 3.9%
52-week high: $55.94
52-week low: $41.83
5-year dividend growth rate: 4.0%
Last dividend increase: 2.0% in October 2013
Also pays in: March, June, September
American Electric Power (AEP) is one of the safest traditional regulated utility stocks because the chain operates in 11 states, which spreads the
risk from storms and other controversies. AEP also pays a reasonable 57% of its earnings as dividends, which gives it scope to raise the payment even in slow years and makes the chance of cuts extremely low.
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