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All Contents © 2019The Kiplinger Washington Editors
By Dan Burrows, Contributing Writer
| May 10, 2018
Dividend stocks that can be counted on to raise their payouts annually never go out of style, but they're even more compelling given today's investing landscape. Investment strategists at S&P Dow Jones Indices note that stocks with long histories of dividend growth can be an investor's best friend amid market volatility and rising interest rates.
"Dividend growth stocks tend to be of higher quality than those of the broader market in terms of earnings quality," write S&P strategists Tianyin Cheng and Vinit Srivastava. "Quite simply, when a company is reliably able to boost its dividend for years or even decades, this may suggest it has a certain amount of financial strength and discipline." And don't forget: steady dividend hikes not only make a stock more alluring to new income investors, but also reward existing investors with increasingly higher yields on shares purchased at lower prices in the past.
The Dividend Aristocrats are companies in the Standard & Poor's 500-stock index that have hiked their payouts every year for at least 25 consecutive years. They exemplify a winning formula for investing in dividend growth stocks.
Here are the current Dividend Aristocrats – a list of household names that offer size, longevity and familiarity, providing comfort amid market uncertainty. These are 53 of the best dividend stocks to start looking at for investors seeking out high-quality companies to add to their long-term portfolios.
Data is as of May 8, 2018. Companies are listed in alphabetical order. The list of Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Dividend history based on company information and S&P data. Analysts’ ratings provided by Zacks Investment Research. Click on ticker-symbol links in each slide for current share prices and more.
Windpower Engineering & Development
Market value: $119.7 billion
Dividend yield: 2.7%
Consecutive annual dividend increases: 60
Analysts’ opinion: 5 strong buy, 1 buy, 4 hold, 0 underperform, 2 sell
Industrial conglomerate 3M (MMM, $201.74), which makes everything from adhesives to electric circuits, is having a tough 2018. Shares tumbled after a disappointing first-quarter earnings report that reflected weakness in the company's automotive, dental and consumer electronics markets. The stock is down about 14% for the year-to-date, but that just makes it look like a bargain to some analysts. RBC Capital Markets, for example, upgraded 3M to "Outperform" (the equivalent of buy) from "Sector Perform" (hold) in early May.
Whatever the shorter-term holds for 3M's share price, investors can bank on the conglomerate's steady payouts over the long haul. The firm's dividend dates back a century and has improved annually for 60 consecutive years.
Market value: $102.9 billion
Dividend yield: 1.9%
Consecutive annual dividend increases: 46
Analysts’ opinion: 16 strong buy, 1 buy, 3 hold, 0 underperform, 0 sell
Following its 2013 spinoff of AbbVie (ABBV) – another Dividend Aristocrat on this list – today’s Abbott Laboratories (ABT, $58.71) is focused on branded generic drugs, medical devices, nutrition and diagnostic products. Its product list includes the likes of Similac infant formulas, Glucerna diabetes management products and i-Stat diagnostics devices.
The company, which dates back to 1888, first paid a dividend in 1924. Abbott has raised its dividend for 46 straight years.
Market value: $157.7 billion
Dividend yield: 3.9%
Analysts’ opinion: 9 strong buy, 0 buy, 7 hold, 0 underperform, 1 sell
AbbVie’s (ABBV, $99.40) corporate heritage will sound very familiar. The pharmaceutical maker was spun off from Abbott Laboratories (ABT) in 2013, and like its parent, it carries a longstanding dividend payment. Including its time as part of Abbott, AbbVie upped its annual distribution for 46 consecutive years.
What should really excite investors, however, is that AbbVie upped its payout twice in 2018. The first one was an 11% hike that came during its usual payout-increase time at the start of the year. However, ABBV also announced an additional 35% boost to its dividend starting with the payment to be made in May, citing additional capital from U.S. tax reform.
Best-selling treatments include Humira for rheumatoid arthritis and AndroGel, a testosterone replacement therapy. All told, AbbVie’s pipeline includes more than 35 products across various stages of clinical trials.
Market value: $34.7 billion
Dividend yield: 2.3%
Consecutive annual dividend increases: 36
Analysts’ opinion: 3 strong buy, 0 buy, 7 hold, 0 underperform, 1 sell
Aflac (AFL, $44.82) 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.
The company's stock started the year in horrific fashion after a report of alleged fraud sent shares into a dive. But shares in Aflac have quietly come back after evidence of wrongdoing failed to materialize. Analysts at Janney Montgomery Scott were steadfast throughout with a “Buy” rating on the stock. “We continue to believe that Aflac’s valuation is attractive and feel that, over time, investors will likely be rewarded from current levels,” they wrote.
Market value: $10.8 billion
Dividend yield: 1.1%
Consecutive annual dividend increases: 25
Analysts’ opinion: 7 strong buy, 0 buy, 5 hold, 0 underperform, 0 sell
A.O. Smith (AOS, $62.98) is one of the newest members of the Dividend Aristocrats.
The manufacturer of commercial and residential water heaters was added to the illustrious group of dependable dividend growers in 2018. In January, A.O. Smith hiked its quarterly cash dividend to 18 cents a share, a 29% increase. Over the past five years, the company's compound annual growth rate of its dividend is more than 25%.
The company exceeded analysts' first-quarter profit forecast, Zacks notes, thanks to a "thriving water heater industry in the United States, strong demand for Lochinvar branded boilers and robust consumer product demand in China."
Air Products and Chemicals
Market value: $35.8 billion
Analysts’ opinion: 11 strong buy, 0 buy, 4 hold, 0 underperform, 0 sell
Air Products and Chemicals (APD, $163.51) spent much of past couple 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 slimmed-down 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 36 years in a row.
Archer Daniels Midland
Market value: $24.6 billion
Dividend yield: 2.9%
Consecutive annual dividend increases: 43
Analysts’ opinion: 5 strong buy, 0 buy, 5 hold, 0 underperform, 1 sell
Archer Daniels Midland (ADM, $43.95) processes ingredients for food and feed, including corn sweeteners, starches and emulsifiers such as lecithin. It also has a commodities trading business. It's a truly global agricultural powerhouse, too, boasting customers in 170 countries that are served by 500 crop procurement locations and 270 ingredient plants.
First-quarter profits rose 16% year-over-year, helped by higher margins in its soybeans business. However, ADM cautioned that the ongoing U.S.-China trade dispute could hurt sales in the future.
Archer Daniels Midland has paid out dividends on an uninterrupted basis for 86 years. That includes 43 consecutive years of payout increases.
Market value: $194.7 billion
Dividend yield: 6.3%
Consecutive annual dividend increases: 34
Analysts’ opinion: 7 strong buy, 1 buy, 12 hold, 0 underperform, 0 sell
Telecommunications stocks are synonymous with dividend payments. Customers pay for service every month, which ensures a steady stream of cash to fund dividends. AT&T (T, $31.70) – the largest U.S. telecom company – is a perfect example.
AT&T has raised its dividend on an annual basis for 34 consecutive years, and typically boasts one of the highest dividend 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 roughly 70% of the U.S. wireless subscriptions market.
AT&T also is trying to keep generating growth through its proposed acquisition of Time Warner (TWX), pending the outcome of a federal trial on antitrust grounds.
Automatic Data Processing
Market value: $55.4 billion
Dividend yield: 2.2%
Analysts’ opinion: 3 strong buy, 1 buy, 14 hold, 0 underperform, 0 sell
Automatic Data Processing (ADP, $125.77) is the world's largest payroll processing firm, responsible for paying more than 39 million employees and serving more than 650,000 clients across more than 110 countries.
One of 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 1974.
Market value: $59.1 billion
Dividend yield: 1.4%
Analysts’ opinion: 12 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell
Medical devices maker Becton Dickinson (BDX, $221.35) first bulked up with its 2015 acquisition of CareFusion, a complementary player in the same industry. Last year, 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.
The company, 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.
Annual dividend increases stretch back 46 years and counting – a track record that should offer peace of mind to antsy income investors.
Market value: $25.8 billion
Analysts’ opinion: 0 strong buy, 0 buy, 9 hold, 0 underperform, 1 sell
Brown-Forman (BF.B, $55.45) 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 better-than-expected growth in the most recent quarter. Tequila sales – Brown-Forman features the Herradura and El Jimador brands, among others – also are on the rise.
The company has raised its payout annually for 34 years, and has delivered an uninterrupted regular payout for 72 years.
Market value: $16.5 billion
Dividend yield: 3.5%
Consecutive annual dividend increases: 32
Analysts’ opinion: 2 strong buy, 0 buy, 10 hold, 1 underperform, 1 sell
A steady stream of acquisitions helped wholesale drug and medical device distributor Cardinal Health (CAH, $52.50) become the giant that it is today.
More recently, it has been embroiled in legal actions related to the nation's opioid epidemic. In late 2016, Cardinal Health agreed to pay $44 million to the Department of Justice to settle allegations that it failed to report suspicious drug orders. And in early 2017, the company agreed to a $20 million settlement with the state of West Virginia. However, Cardinal Health is looking for new life with an acquisition of Medtronic’s (MDT) Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency business, completed in July 2017.
On the dividend front, Cardinal Health has upped the ante on its annual payout for 32 years and counting.
Market value: $241.9 billion
Consecutive annual dividend increases: 31
Analysts’ opinion: 13 strong buy, 0 buy, 3 hold, 0 underperform, 0 sell
Chevron (CVX, $126.57) is an integrated oil giant that also has operations in natural gas and geothermal energy. And like its competitors, Chevron hurt when oil prices started to tumble in 2014. The energy major was forced to slash spending as a result, but – reassuringly – it never slashed its dividend.
Cut to today, and the outlook for oil looks much more stable. Oil prices recently topped $70 per barrel, and while Kiplinger forecasts that prices will range from $60 to $65 a barrel this spring, that's still a better environment than what energy companies were dealing with a couple years ago.
With three decades of uninterrupted dividend growth under its belt, Chevron's track record instills confidence that the payouts will continue.
Market value: $11.5 billion
Dividend yield: 3.0%
Consecutive annual dividend increases: 57
Analysts’ opinion: 0 strong buy, 0 buy, 1 hold, 0 underperform, 1 sell
A change in accounting rules caused insurance company Cincinnati Financial (CINF, $70.18) to post a $31 million loss in the first quarter. On an adjusted basis, the company posted earnings of 72 cents a share, but that still was short of analysts’ estimate for 82 cents, according to Thomson Reuters.
Regardless, the property and casualty insurance specialist has one of the Dividend Aristocrats’ longest streaks of increases at 57 years, and given that Cincinnati Financial only pays out less than two-thirds of its profits as dividends, that trend should continue.
Market value: $18.9 billion
Dividend yield: 0.9%
Consecutive annual dividend increases: 35
Analysts’ opinion: 4 strong buy, 0 buy, 4 hold, 0 underperform, 1 sell
Cintas (CTAS, $176.64) – which is well-known for providing corporate uniforms, but also offers maintenance supplies, tile and carpet cleaning services and even compliance training – is seen by some investors as a bet on jobs growth. There may be something to that. Shares are up 45% over the past 52 weeks, which coincides with unemployment hitting 18-year lows.
Regardless of how the labor market is doing, Cintas is a stalwart as a dividend payer. The company has raised its payout every year since 1983.
Market value: $15.4 billion
Dividend yield: 3.2%
Consecutive annual dividend increases: 41
Analysts’ opinion: 1 strong buy, 0 buy, 9 hold, 0 underperform, 1 sell
Clorox (CLX, $118.71), whose brands include its namesake bleaches, Glad trash bags and Hidden Valley salad dressing, was forced to pare back its 2018 profit outlook despite its forecast for sales growth of 3%. The culprit? Rising costs tied to higher oil prices.
In the longer run, analysts expect solid and steady growth from the consumer products company; earnings are expected to rise an average of almost 8% a year for the next five years. That should apply more upward pressure on Clorox’s dividend, which has increased in size annually since 1977.
Market value: $177.9 billion
Dividend yield: 3.7%
Consecutive annual dividend increases: 55
Analysts’ opinion: 6 strong buy, 0 buy, 9 hold, 0 underperform, 0 sell
Coca-Cola (KO, $41.81) has long been known for quenching consumers’ thirst, but it’s equally effective at quenching investors’ thirst for income. The company has paid a quarterly dividend since 1920, and that dividend has increased annually for the past 55 years.
With the U.S. market for carbonated beverages on the decline for more than a decade, according to market research, Coca-Cola has responded by adding bottled water, fruit juices and teas to its product lineup to keep the cash flowing. In addition to the namesake Coca-Cola brand, KO also sports names such as Minute Maid, Powerade, Simply Orange and Vitaminwater.
Market value: $54.3 billion
Analysts’ opinion: 3 strong buy, 0 buy, 8 hold, 0 underperform, 2 sell
Colgate-Palmolive (CL, $62.28) sells staples ranging from toothpaste to dish detergent, and thus demand for its products tends to remain stable in good and bad economies alike.
The company derives the vast majority of its sales outside the U.S., and that was a problem in the first three months of 2018. Sales failed to meet Colgate's expectations in the first quarter because of stagnant demand in Latin America, which is its largest market.
You still can count on Colgate’s dividend, however. It dates back more than a century, to 1895, and has increased annually for 55 consecutive years.
Market value: $23.7 billion
Dividend yield: 3.8%
Analysts’ opinion: 1 strong buy, 0 buy, 4 hold, 0 underperform, 4 sell
Consolidated Edison (ED, $76.23) is one of the nation’s largest utility stocks by market value. Founded in 1823, it provides electric, gas and steam service for the 10 million customers in New York City and Westchester County. And like most utilities, Consolidated Edison enjoys a fairly stable stream of revenues and income thanks to a dearth of direct competition.
As a result, the utility company has been able to hike its annual distribution without interruption for more than four decades.
Market value: $14.5 billion
Dividend yield: 2.5%
Consecutive annual dividend increases: 62
Analysts’ opinion: 4 strong buy, 1 buy, 10 hold, 0 underperform, 0 sell
Industrial conglomerate Dover (DOV, $75.72) has its hands in all sorts of industries, 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, though it has gotten more headline-worthy of late. Under pressure from activist investor Daniel Loeb’s Third Point hedge fund, Dover recently spun off its upstream energy business. Known as Apergy Corp. (APY), the spinoff began trading on the New York Stock Exchange on May 9.
Dividend growth has been a priority for Dover, which at 62 consecutive years of annual distribution hikes boasts the third-longest such streak among publicly traded companies.
Market value: $42 billion
Consecutive annual dividend increases: 26
Analysts’ opinion: 8 strong buy, 1 buy, 10 hold, 0 underperform, 0 sell
Ecolab (ECL, $145.49) provides water treatment and other industrial-scale maintenance services for several industries, including food, healthcare, and oil and gas. Ecolab’s fortunes can wane as industrial needs fluctuate though; for instance, when energy companies pare spending.
Over the long haul, though, ECL shares are a proven winner. That’s thanks in no small part to a dividend that dates back 81 years. And that payout has grown on an annual basis for more than a quarter-century.
Market value: $44 billion
Dividend yield: 2.8%
Consecutive annual dividend increases: 61
Analysts’ opinion: 6 strong buy, 1 buy, 7 hold, 0 underperform, 0 sell
Emerson Electric (EMR, $69.29) 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, but 2018 is off to a good start. In early May, Emerson reported fiscal second-quarter earnings and revenue ahead of analysts' estimates. Even better, it upped its full-year outlook, thanks to strong demand around the globe.
Emerson has paid dividends since 1956 and has boosted its annual payout for 61 consecutive years.
Market value: $330.6 billion
Analysts’ opinion: 3 strong buy, 0 buy, 10 hold, 0 underperform, 1 sell
A descendant of John D. Rockefeller's Standard Oil, today’s Exxon Mobil (XOM, $78.09) remains one of the world's largest oil companies and is the single biggest company by market value among the 53 Dividend Aristocrats.
As a dividend stalwart – Exxon and its various predecessors have strung together uninterrupted payouts since 1882 – it continued to hike its payout even as oil prices declined in recent years. Exxon has increased its dividend for 36 consecutive years, and has done so at an average annual rate of 6.3%. That includes a 7% boost to its quarterly checks announced in late April.
Federal Realty Investment Trust
Market value: $8.7 billion
Dividend yield: 3.4%
Consecutive annual dividend increases: 50
Analysts’ opinion: 8 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell
Real estate investment trusts like Federal Realty Investment Trust (FRT, $117.78) are required to pay out at least 90% of their taxable earnings as dividends in exchange for certain tax benefits. Thus, REITs typically are a go-to source for income, and few have been more steady than FRT.
Federal Realty Investment Trust – which owns retail and mixed-use real estate across 12 states, as well as the District of Columbia – has now hiked its payout every year for half a century, and at an annual growth rate of more than 7%.
Market value: $18 billion
Consecutive annual dividend increases: 37
Analysts’ opinion: 0 strong buy, 0 buy, 7 hold, 0 underperform, 2 sell
The name Franklin Resources (BEN, $33.31) 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 by assets under management, and is known for its bond funds, among other things.
Mutual fund providers have come under pressure because customers are eschewing traditional stock pickers in favor of indexed investments. However, Franklin is fighting back by launching its first suite of passive exchange-traded funds.
The asset manager has raised its dividend annually since 1981, including an 15% hike announced in December 2017. Investors also got an extra treat in February, when the company announced a special dividend of $3 per share, representing almost 9% in additional yield based on the March 29 record date.
Market value: $59.3 billion
Analysts’ opinion: 10 strong buy, 0 buy, 3 hold, 0 underperform, 2 sell
Defense contractor General Dynamics (GD, $199.62) is one of the newest members of the Dividend Aristocrats, having been added to the elite list of dividend growers at the end of January 2017. Shares in the company came under pressure in late April after quarterly revenue missed Wall Street estimates because of weakness in the company's aerospace unit.
General Dynamics has upped its distribution for 26 consecutive years. With a payout ratio of just 34% – the S&P 500 has an average payout ratio of more than 40% – General Dynamics should have ample room for more dividend hikes.
Market value: $13.2 billion
Analysts’ opinion: 0 strong buy, 0 buy, 6 hold, 0 underperform, 1 sell
Automotive and industrial replacement parts maker Genuine Parts (GPC, $89.78) is best-known for the NAPA brand, though it also operates under AutoTodo in Mexico and UAP in Canada. Since its founding in 1928, it has pursued a strategy of acquisitions to fuel growth. At the end of 2017, it bought Alliance Automotive Group, one of the largest distribution companies in Europe, for $2 billion.
A long-time dividend machine, GPC has hiked its dividend annually for more than six decades. That includes a 7% improvement to the payout in February 2018.
Market value: $18.8 billion
Dividend yield: 2.1%
Consecutive annual dividend increases: 52
Analysts’ opinion: 6 strong buy, 0 buy, 3 hold, 0 underperform, 1 sell
Shares in Hormel (HRL, $35.51), the maker of Spam, have been down in the dumps recently. The stock is off about 10% over the past two years, hurt primarily by weak results from its Jennie-O turkey operations. Analysts at Zacks, however, are optimistic about the future.
"Consumers’ loyalty toward popular brands, such as Skippy, Spam, Hormel Black Label bacon, Muscle Milk and Wholly Guacamole dips, is anticipated to bolster Hormel’s revenues in the quarters ahead," they say. "Moreover, the new deli division in the company’s Refrigerated Foods segment will help drive its top-line performance."
And then there's the dividend, which is as reliable as they come. Hormel has hiked its payout annually for 52 consecutive years.
Market value: $48.9 billion
Consecutive annual dividend increases: 54
Analysts’ opinion: 7 strong buy, 0 buy, 7 hold, 0 underperform, 0 sell
Founded in 1912, Illinois Tool Works (ITW, $144.49) makes construction products, car parts, restaurant equipment and more. While ITW sells many products under the namesake brand, it also operates businesses including Foster Refrigerators, ACME Packaging Systems and the Wolf Range Company.
Weaker-than-expected first-quarter results in the automotive segment are weighing heavily on shares so far in 2018.
Illinois Tool Works announced a 20% increase to its dividend in August 2017, good for the company’s 54th consecutive year of payout hikes.
Market value: $328.9 billion
Consecutive annual dividend increases: 56
Analysts’ opinion: 8 strong buy, 2 buy, 6 hold, 0 underperform, 2 sell
Johnson & Johnson (JNJ, $122.61), founded in 1886 and public since 1944, operates in several different segments of the health care industry. In addition to pharmaceuticals, it makes over-the-counter consumer products such as Band-Aids, Neosporin and Listerine. It also manufactures medical devices used in surgery.
Shares in J&J are flat over the past 12 months, but investors can take some comfort in the rock-solid dividend. The health-care giant hiked its payout by 7.1% in April 2018, extending its streak of consecutive annual dividend increases to 56.
Market value: $35.6 billion
Analysts’ opinion: 1 strong buy, 0 buy, 8 hold, 0 underperform, 2 sell
Kimberly-Clark's (KMB, $101.85) 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. Analysts polled by Thomson Reuters expect earnings to grow at an average annual rate of almost 7% over the next five years.
Kimberly-Clark has paid out a dividend for 83 consecutive years, and has raised the annual payout for the past 46 years.
Market value: $5.5 billion
Consecutive annual dividend increases: 47
Analysts’ opinion: 3 strong buy, 1 buy, 2 hold, 0 underperform, 0 sell
Leggett & Platt (LEG, $41.63) 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.
It’s not a particularly famous company, but it has been a star for long-term shareholders. The stock is up 156% on a price basis alone over the past 10 years, vs. a 92% gain for the S&P 500. That doesn’t include the company’s dividend, which has improved for 47 consecutive years and in 55 of the past 56 years.
Market value: $69.6 billion
Analysts’ opinion: 16 strong buy, 3 buy, 7 hold, 0 underperform, 0 sell
Home improvement chain Lowe’s (LOW, $84.25) has paid a dividend every quarter since going public in 1961, and that dividend has increased annually for more than half a century. Rival Home Depot (HD) is also a longtime dividend payer, but its string of annual dividend increases only dates back to 2009.
Lowe's stock is having a rough outing in 2018. The company missed analysts expectations when it reported earnings for the fourth quarter of 2017 and offered up a soft 2018 outlook. "Lowe’s faces stiff competition from Home Depot and other home supply retailers on attributes such as price and quality of merchandise, in-stock consistency, merchandise assortments and customer service," say analysts at Zacks Equity Research.
Market value: $13.7 billion
Dividend yield: 2%
Analysts’ opinion: 2 strong buy, 0 buy, 4 hold, 0 underperform, 1 sell
A couple of acquisitions are expected to spice up McCormick & Company’s (MKC, $104.39) growth. The company, which makes herbs, spices and other flavorings bought RB Foods in August 2017 and Enrico Giotti in December 2016. Both acquisitions are helping to drive sale growth, Zacks notes.
Analysts expect average annual earnings growth of almost 11% for the next five years. That should provide support for McCormick’s dividend, which has been improved on an annual basis for 32 consecutive years.
Market value: $129.5 billion
Analysts’ opinion: 16 strong buy, 0 buy, 6 hold, 0 underperform, 0 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, $164.77) dividend dates back to 1976 and has gone up every year since.
McDonald's first-quarter earnings easily topped Wall Street expectations, helped by more expensive menu items. For example, the company's pricier Signature Recipe Burgers were a hit with customers. International sales were likewise strong, particularly in the U.K. and Germany.
Market value: $112.8 billion
Consecutive annual dividend increases: 40
Analysts’ opinion: 14 strong buy, 1 buy, 6 hold, 0 underperform, 0 sell
Medtronic (MDT, $83.20) is one of the world’s largest makers of medical devices, holding more than 4,600 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 about 160 other countries – and there's a good chance you'll see its products.
The company is focused on the health of its shareholders as well as its patients: Medtronic has been steadily increasing its dividend every year for a full four decades.
Market value: $19.9 billion
Consecutive annual dividend increases: 45
Analysts’ opinion: 7 strong buy, 0 buy, 4 hold, 0 underperform, 0 sell
Shareholders in U.S. steelmakers like Nucor (NUE, $62.62) are grappling with uncertainties over tariffs. The White House pushed back a May 1 deadline to impose tariffs of up to 25% on imported steel, leaving the company and investors disappointed.
Despite the volatility in the steel business, investors can feel good about Nucor’s dividend. The company has hiked its annual payout every year since 1974, and it pays out a conservative 37% of profits as dividends.
Market value: $7.9 billion
Consecutive annual dividend increases: 42
Analysts’ opinion: 3 strong buy, 0 buy, 8 hold, 1 underperform, 2 sell
U.K.-based diversified industrial company Pentair (PNR, $44.44) completed the tax-free spinoff of nVent Electric (NVT) in April. The move allows Pentair to focus on its water assets, operating in businesses such as Flow Technologies, Filtration & Process and Aquatic & Environmental Systems.
Pentair has raised its dividend every year for more than four decades. Analysts on average project 9% earnings growth annually for the next five years, which should help Pentair maintain the streak.
Market value: $137.2 billion
Dividend yield: 3.3%
Analysts’ opinion: 8 strong buy, 1 buy, 7 hold, 0 underperform, 0 sell
Like Coca-Cola (KO), PepsiCo (PEP, $96.79) is working against a long-term slide in soda sales. It too has responded by expanding its offerings of non-carbonated beverages. One advantage Pepsi has that Coca-Cola doesn’t is its foods business – the company owns Frito-Lay snacks like Doritos, Tostitos and Rold Gold pretzels, and demand for salty snacks remains solid. In the first three months of 2018, North American beverage sales fell 1%, but revenue from Frito Lay North America rose 3%.
Pepsi has paid out a quarterly dividend ever since 1965, and the company has raised the annual payout for 46 consecutive years.
Market value: $26.6 billion
Dividend yield: 1.7%
Analysts’ opinion: 8 strong buy, 0 buy, 9 hold, 0 underperform, 0 sell
Rising costs for raw materials are taking a toll on PPG Industries (PPG, $106.23) these days. The paints and coatings company said in late April that it would cut 1,100 jobs as part of a restructuring aimed at slashing costs.
Longer term, analysts remain convinced that the company can generate steady growth. Earnings are forecast to grow at an average annual rate of more than 9% for the next five years, according to Thomson Reuters. That in turn should help prop up PPG’s dividend, which has been paid since 1899 and improved on an annual basis for 46 years.
Market value: $44.3 billion
Analysts’ opinion: 9 strong buy, 1 buy, 4 hold, 0 underperform, 0 sell
Praxair (PX, $154.00) was added to the Dividend Aristocrats in January 2018, the same month that it declared its 25th consecutive annual dividend increase. The manufacturer of industrial gasses hiked its quarterly payout by 5% to 82.50 cents a share.
"With a focused business strategy and solid execution, we were able to generate record free cash flow in 2017 and this dividend increase reflects our confidence in our ability to sustain strong cash flow throughout economic cycles," said Chairman and Chief Executive Officer Steve Angel in a press release. Analysts expect the multinational industrial firm's revenue to increase 7% this year to $12.3 billion.
Market value: $179.6 billion
Dividend yield: 4.0%
Analysts’ opinion: 4 strong buy, 1 buy, 9 hold, 0 underperform, 1 sell
With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG, $71.44) 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 has helped fuel reliable dividend payments for more than a century. The company has paid shareholders a dividend since 1891, and raised its dividend annually for 62 years in a row.
Market value: $28 billion
Dividend yield: 0.6%
Analysts’ opinion: 7 strong buy, 1 buy, 3 hold, 0 underperform, 0 sell
Along with A.O. Smith and Praxair, Roper Technologies (ROP, $271.70) was the third company added to the Dividend Aristocrats in 2018. The diversified industrial company was tapped for the honor after it hiked its dividend for a 25th straight year in December 2017. Roper lifted its quarterly dividend by 18% to 41.25 cents a share at the time.
With a payout ratio of less than 12%, Roper should have ample room to keep the dividend hikes coming for many years to come.
Courtesy B64 via Wikimedia Commons
Market value: $49 billion
Dividend yield: 1.0%
Analysts’ opinion: 4 strong buy, 1 buy, 6 hold, 0 underperform, 0 sell
S&P Global (SPGI, $194.83), formerly known as McGraw Hill Financial, 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, it's also a central player in corporate and financial analytics, information and research.
Shares have outperformed the broader market by a wide margin over the past five years: SPGI is up 255% on a price basis, vs. a gain of just 64% for the S&P 500. The company also has been a dependable dividend machine. S&P Global has paid uninterrupted dividends since 1937 and has increased its distribution for 45 years in a row.
Market value: $35.2 billion
Consecutive annual dividend increases: 39
Analysts’ opinion: 11 strong buy, 1 buy, 7 hold, 0 underperform, 0 sell
Sherwin-Williams (SHW, $377.94) completed its $11 billion acquisition of Valspar in 2017 to create one of the largest paints, coatings and home-improvement companies in the world. The benefits of the deal are already showing up in results. Sherwin-Williams posted record first-quarter revenues of $4 billion, driven by the addition of Valspar sales, as well as higher selling prices and increased sales volumes.
While Sherwin-Williams did issue $6 billion in bonds to finance the transaction, investors shouldn’t worry about the company’s 39-year streak of annual dividend increases. SHW pays out a meager 18% of its earnings as dividends, which means it has plenty of wiggle room while it pays off its debts.
Stanley Black & Decker
Market value: $21.7 billion
Dividend yield: 1.8%
Analysts’ opinion: 10 strong buy, 1 buy, 5 hold, 0 underperform, 0 sell
Analysts expect power and hand toolmaker Stanley Black & Decker (SWK, $140.85) to generate average annual earnings growth of nearly 11% a year over the next five years, thanks to a strategy of growth through acquisitions and cost cuts. Stanley Black & Decker bought Newell Tools from Newell Brands (NWL) for $2 billion in 2016, and in January 2017 negotiated the purchase of Craftsman tools from Sears Holdings (SHLD) for a total of $775 million over three years and a percentage of annual sales.
That’s good news for the company’s dividend, which has been paid for 142 years on an uninterrupted basis and increased annually for half a century.
Market value: $32.7 billion
Consecutive annual dividend increases: 48
Analysts’ opinion: 4 strong buy, 0 buy, 4 hold, 0 underperform, 0 sell
Sysco (SYY, $62.74), a food services and restaurant supply company, is generating sales growth by making acquisitions. The company bought European services and supplies company Brakes Group in 2016, as well as the Supplies on the Fly e-commerce platform. However, Sysco has been able to generate plenty of growth on its own, producing a steady ramp-up in revenues for years.
Analysts expect average earnings growth of more than 11% annually over the next half-decade. That should allow Sysco to keep up its streak of 48 consecutive years of paying higher dividends.
Market value: $37.2 billion
Dividend yield: 3.6%
Analysts’ opinion: 4 strong buy, 0 buy, 12 hold, 0 underperform, 1 sell
The No. 2 discount retail chain after Walmart (WMT) was late to the e-commerce game but its catch-up efforts are starting to pay off. Shares in Target (TGT, $69.42) are up 20% over the past 52 weeks, vs. a gain of 12% for the S&P 500. Analysts expect earnings per share to rise 12% this year on revenue growth of 6%.
Longer term, investors can have confidence in the dividend. Target paid its first dividend in 1967, seven years ahead of Walmart, and has raised its payout annually since 1972.
T. Rowe Price
Market value: $27.6 billion
Analysts’ opinion: 4 strong buy, 0 buy, 6 hold, 0 underperform, 2 sell
Asset managers such as T. Rowe Price (TROW, $114.17) have been losing market share to indexed funds of the type Vanguard offers, but the company still boasts $1 trillion in assets under management, and analysts expect solid top-line growth in 2018. Aided by advising fees, the company is forecast to see a 13% gain in revenue this year, according to data from Thomson Reuters.
T. Rowe Price has improved its dividend every year for 32 years, and it boasts a lean 39% payout ratio that should keep the annual hikes coming.
Market value: $30.7 billion
Dividend yield: 2.4%
Analysts’ opinion: 8 strong buy, 0 buy, 8 hold, 1 underperform, 0 sell
VF Corporation (VFC, $77.28) is an apparel company with a large number of brands under its umbrella, including Lee and Wrangler jeans and The North Face outdoor products. Most recently, it added to its brand portfolio with the acquisition of Icebreaker Holdings – another outdoor and sport designer – for undisclosed terms in November 2017.
Analysts expect average annual earnings growth of 11% for the next five years. Suffice to say, VFC's 45-year streak of annual dividend payout increases appears safe.
Market value: $61.8 billion
Dividend yield: 2.6%
Analysts’ opinion: 8 strong buy, 2 buy, 8 hold, 0 underperform, 0 sell
Shareholders in Walgreens Boots Alliance’s (WBA, $62.36) breathed a sigh of relief in April when Amazon.com (AMZN) shelved its plan to sell prescription drugs to doctors and hospitals. The drugstore chain's stock is still down 16% for the year-to-date, however, vs. a flat performance for the broader market.
Tracing its roots back to a single drugstore founded in 1901, Walgreens has boosted its dividend every year for more than four decades. It merged with Alliance Boots – a Switzerland-based health and beauty multinational – in 2014 to form the current company.
Market value: $253.1 billion
Analysts’ opinion: 10 strong buy, 0 buy, 14 hold, 0 underperform, 0 sell
Walmart (WMT, $85.20) isn't conceding the retail race to Amazon.com (AMZN), even as the online juggernaut claims an ever-larger piece of the pie. The world's largest retailer, with roughly 4,700 stores in the U.S., has hardly been passive as Amazon seduces its customers.
Walmart expects U.S. e-commerce sales to grow 40% in the current fiscal year, driven by a revamped website with a focus on fashion and home goods. The retailer is also investing heavily in its online grocery delivery service.
Walmart has been delivering meager penny increases to its dividend since 2014, but that has been enough to keep up its 45-year streak of consecutive annual payout hikes.
Market value: $16.2 billion
Analysts’ opinion: 3 strong buy, 0 buy, 13 hold, 0 underperform, 2 sell
W.W. Grainger (GWW, $290.07) – 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. Revenue is forecast to rise 7.2% this year and 5.6% in 2019.
Fortunately for the income-minded, Grainger has lifted its payout every year for 46 years and maintains a reasonable 50% payout ratio.
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