65 Best Dividend Stocks You Can Count On in 2020
These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarter of a century.
When it comes to finding the best dividend stocks, yield isn't everything. If you're an income investor in it for the long haul, you know that steadily rising payouts are a vital factor, too.
For one, dividend increases lift the yield on an investor's original cost basis, meaning today's 1% yield might be much more in the future. They're also indicative of a firm's ability to withstand the ups and downs of the economy, as well as the stock market.
Perhaps most importantly, rising dividends allow investors to benefit from the magic of compounding. As Ben Franklin famously said, "Money makes money. And the money that money makes, makes money."
Enter the Dividend Aristocrats.
The Dividend Aristocrats are companies in the S&P 500 Index that have improved their annual payouts every year for at least 25 consecutive years. It's a mix of household names as well as companies with less name recognition that nonetheless play an outsize role in the American economy, even if it's mostly behind the scenes. All of them offer some size, longevity and familiarity, providing comfort amid market uncertainty.
Even the country's best dividend stocks haven't been 100% immune to the COVID-19 downturn, however. One Aristocrat, retailer Ross Stores (ROST), was dropped from the index after being forced to suspend its dividend in May. A handful of other Aristocrats haven't raised their payouts on schedule, but could still remain in the index as long as they maintain their dividend levels this year and raise again in 2021.
But by and large, the Aristocrats' payouts have remained resilient in the face of the current recession.
Here are the current 65 Dividend Aristocrats – including a few new faces that joined in January 2020, and three more recent additions courtesy of some corporate slicing and dicing. These have been among the best dividend stocks for income growth over the past few decades, and they're a great place to start if you're looking to add new dividend holdings to your long-term portfolios.
Data is as of July 7 unless otherwise noted. Companies are listed by dividend yield, from lowest to highest. The index of Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Dividend history based on company information and S&P data. Dividend-growth streaks include the current year if the company announced a dividend hike in 2020. Analysts’ ratings provided by S&P Global Market Intelligence.
Roper Technologies
- Market value: $40.8 billion
- Dividend yield: 0.5%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 4 Strong Buy, 2 Buy, 7 Hold, 0 Sell, 0 Strong Sell
Roper Technologies (ROP, $390.48) – an industrial company whose businesses include medical and scientific imaging, RF technology and software, and energy systems and controls, among others – was added to the list of the best dividend stocks for income growth in 2018.
The diversified industrial company was tapped for the Dividend Aristocrats after it hiked its cash distribution for a 25th straight year at the end of 2017. Then in November 2018, ROP raised its dividend by 12% to 46.25 cents per share quarterly. The most recent hike came in November 2019, when the quarterly payout was lifted another 10.8%, to 51.25 cents per share.
A combination of acquisitions, organic growth and stronger margins have helped Roper juice its dividend without stretching its profits. With a payout ratio of just 12.5%, versus 55% for the S&P 500, this dividend stock should have ample room to keep the hikes coming for many years to come.
S&P Global
- Market value: $82.2 billion
- Dividend yield: 0.8%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 5 Strong Buy, 6 Buy, 5 Hold, 1 Sell, 0 Strong Sell
Formerly known as McGraw Hill Financial, S&P Global (SPGI, $341.19) 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 – it's also a central player in corporate and financial analytics, information and research.
S&P Global has paid a dividend each year since 1937 and is one of fewer than 25 companies in the S&P 500 that has increased its dividend annually for at least 47 years, the company notes. Most recently, in January, SPGI raised its quarterly payout by a healthy 17.5% to 67 cents a share.
Sherwin-Williams
- Market value: $53.5 billion
- Dividend yield: 0.9%
- Consecutive annual dividend increases: 42
- Analysts' opinion: 11 Strong Buy, 4 Buy, 13 Hold, 1 Sell, 1 Strong Sell
Sherwin-Williams (SHW, $588.74) is one of the largest paints, coatings and home-improvement companies in the world, thanks in large part to its $11 billion acquisition of Valspar in 2017.
The company stumbled to start 2020 when it missed Wall Street's forecast for fourth-quarter adjusted earnings per share, hurt by a stronger dollar and trade-related weakness in its international segment. But longer-term, analysts expect better-than-average profit growth. Analysts polled by S&P Global Market Intelligence expect earnings to grow at an average annual rate of more than 10% for the next five years.
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, including a nearly 19% jump in February 2020, and it pays out a mere 27% of its earnings as dividends.
Cintas
- Market value: $28.1 billion
- Dividend yield: 0.9%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 1 Strong Buy, 4 Buy, 8 Hold, 0 Sell, 2 Strong Sell
Cintas (CTAS, $269.98) 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.
There may be something to that. Shares have delivered a total return of 236% over the past five years, versus just 68% for the S&P 500.
Those figures were far better before the COVID-sparked economic downturn, as were Cintas' short-term prospects. The U.S. unemployment rate now stands at 11.1%, and that has weighed heavily on CTAS.
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 going public in 1983. Most recently, in October, CTAS raised its annual dividend by 24% to $2.55 per share.
Ecolab
- Market value: $57.7 billion
- Dividend yield: 0.9%
- Consecutive annual dividend increases: 28
- Analysts' opinion: 2 Strong Buy, 1 Buy, 16 Hold, 2 Sell, 0 Strong Sell
Ecolab (ECL, $202.94) provides water treatment and other industrial-scale maintenance services for several industries, including food, health care, and oil and gas. Practically speaking, its products help optimize everything from offshore oil production to electronics polishing to commercial laundries.
Ecolab's fortunes can wane as industrial needs fluctuate, though; for instance, when energy companies pare spending, ECL will feel the burn.
Over the long haul, however, this Dividend Aristocrat's shares have been a proven winner. The stock has delivered an annualized return, including dividends, of 16.5% over the past decade, versus 13.8% for the S&P 500. That's thanks in no small part to 28 consecutive years of dividend increases. The company's most recent hike came in December, when ECL raised its quarterly payout by 2% to 47 cents a share.
Brown-Forman
- Market value: $30.7 billion
- Dividend yield: 1.1%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 1 Strong Buy, 0 Buy, 13 Hold, 2 Sell, 3 Strong Sell
Brown-Forman (BF.B, $64.17) is one of the largest producers and distributors of alcohol in the world. Jack Daniel's Tennessee whiskey and Finlandia vodka are just two of its best-known brands, with the former helping drive long-term growth.
Whiskey is increasingly popular with American tipplers, surveys show, and Jack Daniel's leads the pack. Tequila sales – Brown-Forman features the Herradura and El Jimador brands, among others – also are on the rise.
Unlike many of the best dividend stocks on this list, you won't have a say in corporate matters with the publicly traded BF.B shares. They hold no voting power. And most of the voting-class A shares are held by the Brown family.
Still, you can enjoy in the company's gains and dividends. That payout has been on the rise for 36 consecutive years and has been delivered without interruption for 74. Most recently, Brown-Forman upped the ante by 5% in November 2019, to 17.43 cents per share.
Becton Dickinson
- Market value: $74.1 billion
- Dividend yield: 1.3%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 7 Strong Buy, 5 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Medical devices maker Becton Dickinson (BDX, $251.38) bulked up in 2015 with its acquisition of CareFusion, a complementary player in the same industry. Then in 2017, it struck a $24 billion deal for fellow Dividend Aristocrat C.R. Bard, another medical products company with a strong position in treatments for infectious diseases.
Becton Dickinson, which makes everything from insulin syringes to cell analysis systems, is increasingly looking for growth to be driven by markets outside the U.S., including China. Analysts expect BDX to generate average annual earnings growth of about 9% for the next five years, according to S&P Global Market Intelligence.
BDX's last hike was a 2.6% uptick announced in November 2019. Its annual dividend growth streak is nearing five decades – a track record that should offer peace of mind to antsy income investors.
Carrier Global
- Market value: $20.8 billion
- Dividend yield: 1.3%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 4 Strong Buy, 2 Buy, 6 Hold, 0 Sell, 0 Strong Sell
Carrier Global (CARR, $24.01) is a mammoth player in climate control systems with three distinct business segments: Heating, Ventilating and Air Conditioning (HVAC), Refrigeration, and Fire & Safety. The firm employs 53,000 people in 160 countries.
Carrier Global makes the list of Dividend Aristocrats by dint of its one-time corporate parent United Technologies. UTX was a Dividend Aristocrat until its April 2020 merger with Raytheon. Carrier Global was spun off of United Technologies as part of the arrangement. (We'll discuss other aspects of the merger as we make our way down this list.)
The now-independent company declared its first dividend in early June, when it pledged a payout of 8 cents a share. Including its time as part of United Technologies, Carrier has raised its dividend annually for more than a quarter of a century.
NEW ARISTOCRAT: Expeditors International of Washington
- Market value: $12.9 billion
- Dividend yield: 1.4%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 0 Strong Buy, 0 Buy, 11 Hold, 3 Sell, 1 Strong Sell
Expeditors International of Washington (EXPD, $77.22) was added to the Aristocrats in January 2020 as it eclipsed a quarter-century of dividend growth. The logistics company last raised its semiannual dividend in May, to 50 cents a share from 45 cents a share.
EXPD shares fell under pressure in 2020 much earlier than the rest of the market, thanks to a bearish outlook in mid-January. Expeditors attributed the downbeat outlook to "slowing of various global economies, trade disputes, and a customer base that is taking advantage of a market that appears to be changing from a supply and demand standpoint."
If past is prologue, however, EXPD will remain committed to its semiannual dividend, which it bolstered by 4% for its June distribution. A payout ratio of just 30% should help ensure that it has ample resources to keep the streak alive.
McCormick & Co.
- Market value: $24.4 billion
- Dividend yield: 1.4%
- Consecutive annual dividend increases: 34
- Analysts' opinion: 1 Strong Buy, 1 Buy, 6 Hold, 3 Sell, 1 Strong Sell
McCormick (MKC, $183.14) – the maker of herbs, spices and other flavorings – has been bulking up over the past three years to drive sales growth, and the deals have been paying off. While MKC had to pull its full-year forecast earlier this year due to uncertainty around COVID-19, it has still put together strong operational results in 2020, including 8% sales gains and a nearly 27% pop in profits for its second quarter.
Not bad for a mature company in its sector.
Analysts expect average annual earnings growth of more than 5% for the next five years. That should provide support for McCormick's dividend, which has been paid for 95 consecutive years and raised annually for 34. Most recently, in November, the company hiked the dividend by nearly 9% to 62 cents per share.
"We remain committed to our long history of returning cash to shareholders and I am incredibly proud to announce another dividend increase," CEO Lawrence Kurzius said in a press release.
That 62-cent dividend, by the way, is double the amount it paid in 2012.
Otis Worldwide
- Market value: $24.6 billion
- Dividend yield: 1.4%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 3 Strong Buy, 1 Buy, 5 Hold, 0 Sell, 1 Strong Sell
Anyone who has spent time staring at the buttons in an elevator is familiar with Otis Worldwide (OTIS, $56.82). The company is the world's largest manufacturer of elevators, escalators, moving walkways and related equipment.
Like Carrier Global, Otis was spun off of United Technologies as part of the Raytheon merger in spring 2020. Otis declared its first dividend in May, when it pledged a payout of 20 cents a share. Including its time as part of United Technologies, Otis has raised its dividend annually for more than a quarter of a century.
Analysts expect the company to generate average annual earnings growth of 8% over the next three to five years.
Abbott Laboratories
- Market value: $163.5 billion
- Dividend yield: 1.6%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 11 Strong Buy, 5 Buy, 4 Hold, 2 Sell, 0 Strong Sell
Following its 2013 spinoff of AbbVie – another Dividend Aristocrat on this list that we'll discuss later – Abbott Laboratories (ABT, $92.46) 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 has been expanding by acquisition as of late, including medical-device firm St. Jude Medical and rapid-testing technology business Alere, both snapped up in 2017.
Abbott Labs, which dates back to 1888, first paid a dividend in 1924. Its dividend growth streak is long-lived too, at 48 years and counting. Its last payout hike came in December – a 12.5% improvement to 36 cents per share.
Lowe's
- Market value: $101.9 billion
- Dividend yield: 1.6%
- Consecutive annual dividend increases: 57
- Analysts' opinion: 18 Strong Buy, 7 Buy, 6 Hold, 1 Sell, 0 Strong Sell
When it comes to home improvement chains, Home Depot (HD), a member of the Dow Jones Industrial Average, gets all the glory. But rival Lowe's (LOW, $135.02) is the superior dividend grower ... for now.
Lowe's has paid a cash distribution every quarter since going public in 1961, and that dividend has increased annually for more than half a century. Most recently, in May 2019, Lowe's announced that it would lift its quarterly payout by 14.5% to 55 cents a share. Home Depot is a longtime dividend payer, too, but its string of annual dividend increases dates back only to 2010.
We say "for now" because Lowe's has so far failed to raise its dividend in 2020, passing the May window during which it typically makes the announcement. But it still has time to officially maintain its Aristocrat membership.
Analysts expect Lowe's to deliver average annual earnings growth of more than 15% for the next five years, according to S&P Global Market Intelligence, which should help keep the dividend aloft.
Linde
- Market value: $117.9 billion
- Dividend yield: 1.7%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 11 Strong Buy, 4 Buy, 5 Hold, 1 Sell, 0 Strong Sell
Linde (LIN, $224.53) 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 is expected to continue to be a steady dividend payer. Prior to the merger, Linde, now headquartered in Dublin, raised its dividend every year since 2014. Its most recent hike was in late February 2020 – a 10% bump to 96.3 cents per share.
Analysts project the multinational industrial firm's profits to increase at an average annual rate of almost 10% over the next three to five years, according to a survey by S&P Global Market Intelligence. A payout ratio of just 52% also gives Linde a decent amount of breathing room for future dividend growth.
Walmart
- Market value: $359.5 billion
- Dividend yield: 1.7%
- Consecutive annual dividend increases: 46
- Analysts' opinion: 17 Strong Buy, 9 Buy, 8 Hold, 2 Sell, 0 Strong Sell
The world's largest retailer might not pay the biggest dividend, but it sure is consistent. Walmart (WMT, $126.95) has been delivering meager penny increases to its dividend since 2014, including 2020's bump to 54 cents per share. But that has been enough to maintain its 46-year streak of consecutive annual payout hikes.
Walmart boasts nearly 5,400 stores across different formats in the U.S., not to mention another 5,800 stores across dozens more banners in 26 other countries.
But while Walmart is a brick-and-mortar business, it's not conceding the e-commerce race to Amazon.com (AMZN). The company's online sales have been exploding for years now, and it recently announced a "Walmart+" service in July to battle Amazon Prime.
Market research firm eMarketer notes that Walmart eclipsed Apple (AAPL) as the third-largest online retailer at the end of 2018. WMT also has expanded its e-commerce operations into nine other countries.
W.W. Grainger
- Market value: $17.2 billion
- Dividend yield: 1.8%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 6 Strong Buy, 0 Buy, 13 Hold, 1 Sell, 2 Strong Sell
W.W. Grainger (GWW, $320.85) – 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. Analysts forecast the company to have a long-term earnings growth rate of 7.8%
Fortunately for the income-minded, Grainger has achieved annual dividend growth for nearly half a century and maintains a comfortable 31% payout ratio. It renewed its Dividend Aristocrats membership card in April 2019, when it announced a 6% dividend increase to $1.44 per share.
Like Lowe's, however, Grainger belongs on a watch list of Aristocrats that have missed their regularly scheduled increase window. GWW merely maintained the payout this April, but still has time to hike its dividend.
PPG Industries
- Market value: $25.6 billion
- Dividend yield: 1.9%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 8 Strong Buy, 5 Buy, 12 Hold, 1 Sell, 0 Strong Sell
PPG Industries (PPG, $108.42) makes coatings and paints for numerous industries, including aerospace, architecture, automotive and packaging. It's a business that always has some level of need, but even before COVID struck, PPG warned that 2020 could be a bit of a down because of global trade tensions and weaker demand from Boeing (BA), a major customer.
Longer-term, however, analysts remain optimistic that the company can generate steady growth.
PPG's profits are forecast to grow at an average annual rate of almost 6% for the next three to five years, according to S&P Global Market Intelligence. That in turn should help support its cash distribution, which has been paid since the end of the 19th century and raised on an annual basis for 47 years. The dividend stock last improved its payout in July 2019, when it announced a 6.3% increase to 51 cents per share.
Hormel Foods
- Market value: $26.0 billion
- Dividend yield: 1.9%
- Consecutive annual dividend increases: 54
- Analysts' opinion: 0 Strong Buy, 0 Buy, 9 Hold, 2 Sell, 1 Strong Sell
Hormel Foods (HRL, $48.15) is about as reliable as they come when it comes to income investing. The packaged food company best known for Spam – but also responsible for its namesake-branded meats and chili, Skippy peanut butter, Dinty Moore stews and House of Tsang sauces – has raised its annual payout every year for more than five decades.
Indeed, in November, Hormel announced its 54th consecutive annual dividend increase – a nearly 11% raise to 23.25 cents a share. The payment, made Feb. 18 to shareholders of record as of Jan. 13, was the 366th consecutive quarterly dividend paid by the company.
Hormel is rightly proud to note that it has paid a regular quarterly dividend without interruption since becoming a public company in 1928. Meeting analyst expectations – which currently are for modest 3% average annual profit growth for the next five years – would go a long way toward keeping that streak alive.
Dover
- Market value: $13.9 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 5 Strong Buy, 4 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Dividend growth has been a priority for Dover (DOV, $96.83), which at 64 consecutive years of annual distribution hikes boasts the longest such streak among this list of top dividend stocks. Dover last raised its payout in August 2019, when it upped the quarterly dole by 2% to 49 cents a share.
The industrial conglomerate has its hands in all sorts of businesses, from Dover-branded pumps, lifts and even productivity tools for the energy business, to Anthony-branded commercial refrigerator and freezer doors.
It's not an exciting business, but it can be a remunerative one.
"Dover is focused on expanding productivity initiatives while its mergers and acquisitions pipeline remain robust," Zacks Equity Research analysts say. "It continues to create value through sustainable growth, profitability improvement, strong cash flow, smart organic and inorganic capital deployment."
Stanley Black & Decker
- Market value: $21.4 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 52
- Analysts' opinion: 9 Strong Buy, 4 Buy, 9 Hold, 0 Sell, 0 Strong Sell
Power- and hand-toolmaker Stanley Black & Decker (SWK, $138.89) has paid a dividend for 143 years on an uninterrupted basis, and it has improved that cash distribution annually for more than half a century, including a 4.5% increase to 69 cents per share in July 2019.
Analysts expect SWK to generate average annual earnings growth of nearly 6% a year over the next half-decade, thanks to a strategy of growth through acquisitions and cost cuts.
Stanley Black & Decker bought Newell Tools – which includes the Lenox and Irwin brands – from Newell Brands (NWL) for $2 billion in 2016. In January 2017, it negotiated the purchase of the Craftsman tool brand from Sears Holdings (SHLDQ) for a total of $775 million over three years and a percentage of annual sales. Then in 2018, SWK announced the acquisition of IES Attachments for $690 million cash, and the $440 million purchase of Nelson Fastener Systems.
Stanley still is making deals in 2020, announcing in January that it would buy Boeing supplier Consolidated Aerospace Manufacturing for up to $1.5 billion.
NEW ARISTOCRAT: Albemarle
- Market value: $8.3 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 4 Strong Buy, 2 Buy, 12 Hold, 2 Sell, 3 Strong Sell
Albemarle (ALB, $78.00), which manufacturers specialty chemicals such as lithium, was tapped to join the Dividend Aristocrats in January, having secured a streak of 25 years of dividend increases in 2019.
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.
The chemicals giant last hiked its dividend in late February 2020, by nearly 5% to 38.5 cents a share. And with a payout ratio of around 30%, ALB certainly has the financial resources to keep building up its dividend going forward.
"Providing our shareholders with a dividend increase every year for the past quarter of a century places Albemarle among a select group of companies," CEO Luke Kissam said in a statement. "We are confident in the future of Albemarle and remain dedicated to generating shareholder return through our dividend and business growth."
Air Products & Chemicals
- Market value: $58.6 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 38
- Analysts' opinion: 8 Strong Buy, 7 Buy, 11 Hold, 0 Sell, 0 Strong Sell
Air Products & Chemicals (APD, $265.13) 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 38 years in a row. That includes a 15.5% upgrade to its May payout – the largest increase in company history.
"The board's decision to increase the dividend by over 15% reflects continued confidence in Air Products' strong financial position and cash flows," the company said in a news release. "In fiscal 2019, we paid nearly $1 billion dollars of dividends to our shareholders."
A.O. Smith
- Market value: $7.7 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 4 Strong Buy, 1 Buy, 8 Hold, 1 Sell, 0 Strong Sell
A.O. Smith (AOS, $47.90), a manufacturer of commercial and residential water heaters, is a relatively recent addition to the Dividend Aristocrats, entering the club in 2018. In October 2019, it announced a 9% raise in its quarterly payout to 24 cents a share. AOS noted at the time that its five-year compound annual dividend growth rate was 24%.
Analysts expect the company's earnings to rise at a rate of 8% a year for the next five years, helped by the rollout of A.O. Smith water heaters at home-improvement chain Lowe's, as well as strength across the North American market.
A.O. Smith has increased its dividend annually for 27 consecutive years.
Clorox
- Market value: $28.2 billion
- Dividend yield: 2.0%
- Consecutive annual dividend increases: 43
- Analysts' opinion: 4 Strong Buy, 1 Buy, 7 Hold, 2 Sell, 2 Strong Sell
Clorox (CLX, $223.81), whose brands include its namesake bleaches, Glad trash bags and Hidden Valley salad dressing, was one of the darlings of the downturn. The need for Clorox's ubiquitous cleaning materials has driven shares higher by more than 47% year-to-date.
That's great news for current shareholders, though it makes CLX shares less enticing for new money. The stock yields a modest 2% yield at today's prices.
Fortunately, the yield on cost should keep growing over time. Clorox has increased its payout every year since 1977, most recently in May 2020 when it climbed 5% to $1.11 per share.
We've mentioned previously that a payout ratio of roughly two-thirds of Clorox's earnings signaled the possibility for slower future payout increases. And indeed, this year's bump was about half the size of 2019's. Nonetheless, this is a plenty-safe dividend.
Pentair
- Market value: $6.0 billion
- Dividend yield: 2.1%
- Consecutive annual dividend increases: 44
- Analysts' opinion: 5 Strong Buy, 3 Buy, 9 Hold, 2 Sell, 0 Strong Sell
U.K.-based diversified industrial company Pentair (PNR, $36.47) completed the tax-free spinoff of nVent Electric (NVT) in 2017, allowing the company to focus on its water assets, operating in businesses such as Flow Technologies, Filtration & Process and Aquatic & Environmental Systems. It bulked up those operations with its January 2019 acquisition of Aquion for $160 million in cash.
Pentair has raised its dividend annually for 44 straight years, most recently by 5.6% to 19 cents a quarter. Analysts on average project long-term earnings growth of 3% a year, according to S&P Global Market Intelligence; that's a considerable slowdown from previous estimates, which you can chalk up to the COVID-inspired economic slowdown.
Still, a modest payout ratio of 32% bodes well for future dividend growth.
NEW ARISTOCRAT: Atmos Energy
- Market value: $12.2 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 25
- Analysts' opinion: 5 Strong Buy, 2 Buy, 4 Hold, 1 Sell, 0 Strong Sell
Atmos Energy (ATO, $100.07), which distributes and stores natural gas, was added to the Dividend Aristocrats in January 2020. The Dallas-headquartered firm serves more than 3 million customers across eight states, with a large presence in Texas and Louisiana.
Atmos clinched its 25th year of dividend growth in November 2019, when it announced a 9.5% increase to 57.5 cents per quarter.
"The company has a sturdy capital expenditure policy in place, helping it enhance the safety and reliability profile of its natural gas pipeline," notes Zacks Equity Research.
Analysts surveyed by S&P Global Market Intelligence forecast average annual earnings growth of 6.5% over the next three to five years. For dividend stocks in the utility sector, that's A-OK.
T. Rowe Price
- Market value: $28.0 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 34
- Analysts' opinion: 6 Strong Buy, 1 Buy, 8 Hold, 3 Sell, 0 Strong Sell
Asset managers such as T. Rowe Price (TROW, $122.96) 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 the current fiscal year.
Aided by advising fees, the company is forecast to post 8.6% average profit growth over the next three to five years, according to data from S&P Global Market Intelligence.
T. Rowe Price has improved its dividend every year for 34 years, including an ample 18.4% boost to the payout announced in February. A 40% dividend payout ratio should keep the good times rolling.
Target
- Market value: $59.0 billion
- Dividend yield: 2.3%
- Consecutive annual dividend increases: 49
- Analysts' opinion: 12 Strong Buy, 7 Buy, 9 Hold, 1 Sell, 0 Strong Sell
Target (TGT, $118.06) 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, when the retailer raised its quarterly disbursement by 3.0% to 68 cents a share.
With a payout ratio of less than 50%, income investors can count on Target to keep hitting the mark for dividend growth. As for earnings growth: Analysts are looking for an average annual improvement of about 7% through at least 2024 – not bad at all for a brick-and-mortar player.
Colgate-Palmolive
- Market value: $63.4 billion
- Dividend yield: 2.4%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 8 Strong Buy, 3 Buy, 8 Hold, 1 Sell, 1 Strong Sell
Colgate-Palmolive (CL, $73.97) sells a wide range of consumers staples brands including its namesake toothpaste and dish soap, as well as Speed Stick deodorant, Murphy cleaning products and Tom's of Maine personal-care products.
Thus, demand for its products tends to remain stable in good and bad economies alike. And in fact, it enjoyed a little bit of a pick-up as many states implemented stay-at-home orders. CL shares have delivered a total return of 9% in 2020 versus a small loss for the S&P 500.
Colgate's dividend – which dates back more than a century, to 1895, and has increased annually for 58 years – continues to thrive. CL last raised its quarterly payment in March 2020, when it added 2.3% to 44 cents a share.
Illinois Tool Works
- Market value: $55.39 billion
- Dividend yield: 2.4%
- Consecutive annual dividend increases: 56
- Analysts' opinion: 3 Strong Buy, 0 Buy, 15 Hold, 3 Sell, 1 Strong Sell
Founded in 1912, Illinois Tool Works (ITW, $175.33) 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 2019, Illinois Tool Works raised its quarterly dividend 7% to $1.07 cents a share. ITW says it returned $2.8 billion to shareholders in the form of dividends and share repurchases last year.
ITW has improved its dividend for 56 straight years. Its payout ratio of 55% is higher than many of the companies we've already covered, but it still leaves decent headroom for modest but steady increases for years to come.
Medtronic
- Market value: $123.0 billion
- Dividend yield: 2.5%
- Consecutive annual dividend increases: 43
- Analysts' opinion: 14 Strong Buy, 7 Buy, 6 Hold, 1 Sell, 0 Strong Sell
Medtronic (MDT, $91.67), one of the world's largest makers of medical devices, is an income machine. Most recently, in June, MDT lifted its quarterly payout by 7.4% to 58 cents a share. Its dividend per share has grown by 50% over the past half-decade and has grown at a 17% compounded annual growth rate over the past 43 years, Medtronic says.
MDT aims to return a minimum of 50% of its free cash flow to shareholders through dividends and share repurchases. The company can steer all this cash back to shareholders thanks to the ubiquity of its products.
Medtronic also spends heavily in research and development, including $2.3 billion in 2019. As a result, 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.
Chubb
- Market value: $57.4 billion
- Dividend yield: 2.5%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 2 Strong Buy, 6 Buy, 10 Hold, 3 Sell, 0 Strong Sell
Chubb (CB, $127.17) was added to the Dividend Aristocrats in January 2019. The insurance company last raised its payout in May, by 4% to 78 cents a share. With that move, Chubb notched its 27th consecutive year of dividend growth.
As the world's largest publicly traded property and casualty insurance company, Chubb boasts operations in 54 countries and territories. It's not the most exciting topic for dinner conversation, but it's a profitable business that supports a longstanding dividend.
The company's payout ratio stands at just 37% of earnings, so income investors can expect Chubb to remain among the Dividend Aristocrats for years to come.
Automatic Data Processing
- Market value: $63.2 billion
- Dividend yield: 2.5%
- Consecutive annual dividend increases: 45
- Analysts' opinion: 3 Strong Buy, 2 Buy, 13 Hold, 1 Sell, 0 Strong Sell
Automatic Data Processing (ADP, $147.00) is the world's largest payroll processing firm, responsible for paying nearly 40 million employees and serving more than 810,000 clients across 140 countries.
ADP has unsurprisingly struggled in 2020 amid higher unemployment. Nonetheless, 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 1975.
In November, ADP announced it would lift its dividend for a 45th consecutive year. The new payout of 91 cents per share is more than 15% fatter than the previous amount.
Procter & Gamble
- Market value: $302.6 billion
- Dividend yield: 2.6%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 9 Strong Buy, 4 Buy, 9 Hold, 1 Sell, 0 Strong Sell
With major brands such as Tide detergent, Pampers diapers and Gillette razors, Procter & Gamble (PG, $122.22) is among the world's largest consumer products companies.
Although the economy ebbs and flows, demand for products such as toilet paper, toothpaste and soap tends to remain stable. At the moment, Procter & Gamble boasts 23 brands that generate at least $1 billion in annual revenues – and another 14 with sales of between $500 million and $1 billion.
That hardly makes P&G completely recession-proof, but it has helped fuel reliable dividend payments for more than a century. The Dow component has paid shareholders a dividend since 1890, and has raised its dividend annually for 64 years in a row. P&G last increased its payout in April 2020, by 6% to 79.07 cents per share.
McDonald's
- Market value: $138.2 billion
- Dividend yield: 2.7%
- Consecutive annual dividend increases: 43
- Analysts' opinion: 18 Strong Buy, 7 Buy, 10 Hold, 0 Sell, 0 Strong Sell
The world's largest hamburger chain also happens to be a dividend stalwart. Changing consumer tastes will always be a risk, but McDonald's (MCD, $185.82) 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.
Including dividends, McDonald's – a component of the Dow Jones Industrial Average – has generated a total return of 122% over the past five years. That beats the S&P 500 by about 54 percentage points.
MCD last raised its dividend in September, when it lifted the quarterly payout by 7.8% to $1.25 a share. That marked its 43rd consecutive annual increase.
Johnson & Johnson
- Market value: $376.6 billion
- Dividend yield: 2.8%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 8 Strong Buy, 5 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Johnson & Johnson (JNJ, $142.85), 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.
The Dow component is currently rushing to develop a vaccine for coronavirus – the pneumonia-like disease spreading rapidly in China. Although that won't be a money-gusher anytime soon, it won't affect those who count on JNJ's steady dividends. The health care giant last hiked its payout in April 2019, by 6.3% to $1.01 per share, extending its streak of consecutive annual dividend growth to 58 years.
That should continue if J&J can keep growing its earnings; Wall Street's pros expect it to, at a clip of 5.7% annually on average over the next half-decade.
General Dynamics
- Market value: $41.6 billion
- Dividend yield: 3.0%
- Consecutive annual dividend increases: 28
- Analysts' opinion: 9 Strong Buy, 5 Buy, 6 Hold, 0 Sell, 0 Strong Sell
Defense contractor General Dynamics (GD, $145.18) is one of the newer members of the Dividend Aristocrats, having been added to the elite list of dividend growers in 2017.
Generous military spending has helped fuel this dividend stock's steady stream of cash returned to shareholders. In August, the U.S. General Services Administration and the Defense Department awarded GD a $7.6 billion cloud contract. More recently, in February, the U.S. Army awarded it a contract for up to $883 million to modernize its training.
General Dynamics has upped its distribution for 28 consecutive years. The last raise was announced in March 2020, when GD lifted the quarterly payout by 7.8% to $1.10 a share. With a payout ratio of 34%, General Dynamics should have ample room for more dividend growth.
Kimberly-Clark
- Market value: $48.5 billion
- Dividend yield: 3.0%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 3 Strong Buy, 3 Buy, 7 Hold, 1 Sell, 1 Strong Sell
Kimberly-Clark's (KMB, $142.52) well-known brands include Huggies diapers, Scott paper towels and Kleenex tissues. Like other makers of consumer staples, Kimberly-Clark holds out the promise of delivering slow but steady growth along with a healthy dividend to drive total returns.
Kimberly-Clark has paid out a dividend for 84 consecutive years, and has raised the annual payout for nearly half a century. In January, KMB announced a 3.9% increase in the quarterly dividend, to $1.07 per share. The company notes that in 2019, it generated $425 million in cost savings and returned $2.2 billion to shareholders through dividends and share repurchases.
Analysts polled by S&P Global Market Intelligence expect KMB earnings to grow at an average annual rate of 6.3% over the next five years.
Raytheon Technologies
- Market value: $92.4 billion
- Dividend yield: 3.1%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 11 Strong Buy, 6 Buy, 4 Hold, 0 Sell, 1 Strong Sell
Raytheon Technologies (RTX, $61.01), formerly known as United Technologies prior to the spring 2020 merger and spinoffs, has paid cash dividends on its common stock every year since 1936. Even better, it has raised its payout annually for 26 years.
The merged entity – minus Carrier Global and Otis Worldwide – declared its first dividend in April with a distribution of 47.5 cents a share.
Analysts say that although commercial aerospace will face significant near-medium term headwinds from COVID-19, they expect that it will nevertheless generate significant cash by 2022.
Most recently, Raytheon's missiles and defense business secured a $32.2 million contract from the Navy to work on Evolved Sea Sparrow Missiles (ESSM) Block 2.
PepsiCo
- Market value: $185.3 billion
- Dividend yield: 3.1%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 6 Strong Buy, 6 Buy, 8 Hold, 0 Sell, 0 Strong Sell
Like Coca-Cola, PepsiCo (PEP, $133.57) 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 rival Coca-Cola doesn't is its foods business. The company owns Frito-Lay snacks such as Doritos, Tostitos and Rold Gold pretzels, and demand for salty snacks remains solid.
In 2019, Pepsi struck deals to buy BFY Brands, the maker of PopCorners snacks, and South Africa-based Pioneer Foods, to widen its reach in the snacks industry. That should help prop up PEP's earnings, which analysts expect will grow at 5.9% annually on average over the next five years.
In turn, that also should help PepsiCo continue its dividend growth streak, which reached 48 years this February thanks to a 7% hike to $1.0225 per share.
Aflac
- Market value: $24.8 billion
- Dividend yield: 3.2%
- Consecutive annual dividend increases: 38
- Analysts' opinion: 2 Strong Buy, 0 Buy, 9 Hold, 2 Sell, 0 Strong Sell
Aflac (AFL, $34.62) 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.
In February, Aflac lifted its dividend for a 38th consecutive year, this time by 3.7% to 28 cents per share.
COVID has done a number on insurers, however. AFL shares have lost roughly a third of their value, and analysts now expect Aflac to generate average earnings growth of just 1.6% a year for the next half-decade, according to S&P Global Market Intelligence.
Fortunately, the payout is an extremely conservative 27% of profits, meaning it's plenty safe for now.
VF Corp.
- Market value: $23.3 billion
- Dividend yield: 3.2%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 7 Strong Buy, 6 Buy, 13 Hold, 1 Sell, 1 Strong Sell
VF Corp. (VFC, $59.83) is an apparel company with a large number of brands under its umbrella, including The North Face outdoor products, Timberland boots and Eastpak backpacks. It added to its brand portfolio with the acquisition of Icebreaker Holdings – another outdoor and sport designer – under undisclosed terms in April 2018.
Analysts expect average annual earnings growth of 7.8% for the next five years from this transforming company. In addition to picking up Icebreaker, VFC also spun off Kontoor Brands (KTB), which includes Lee and Wrangler jeans, in 2019.
The company's dividend technically fell last year, from 51 cents per share to 43 cents, before growing back to 48 cents per share – put the dip was an adjustment to account for the Kontoor spinoff. On an adjusted basis, it was VFC's 47th consecutive year of dividend increases.
KTB, which was spun off to shareholders in May 2019, started with a dividend of 56 cents per share. A year later, it was forced to temporarily suspend that payout.
Caterpillar
- Market value: $68.8 billion
- Dividend yield: 3.2%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 7 Strong Buy, 4 Buy, 13 Hold, 0 Sell, 2 Strong Sell
Caterpillar (CAT, $127.20), the world's largest maker of heavy construction and mining equipment, was added to the Dividend Aristocrats in January 2019.
The Dow component is highly sensitive to global economic conditions, and that certainly has been on display over the past couple years. Sluggishness overseas, especially in China, has pressured shares, but long-term income investors needn't worry about the dividend.
Caterpillar has lifted its payout every year for 26 years. CAT's quarterly cash dividend has more than doubled since 2009, and it has paid a regular dividend without fail since 1933. Moreover, its $1.03-per-share dividend – almost 20% higher than where it was a year ago – accounts for just 34% of its profits.
Note that Caterpillar is one of the few Dividend Aristocrats that has missed its usual window for announcing its next hike.
Emerson Electric
- Market value: $36.3 billion
- Dividend yield: 3.3%
- Consecutive annual dividend increases: 63
- Analysts' opinion: 6 Strong Buy, 2 Buy, 17 Hold, 0 Sell, 0 Strong Sell
Emerson Electric (EMR, $60.82) 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. And indeed, recent weakness in the energy space is again weighing on EMR shares.
Happily, analysts now say Emerson is at least well-positioned to take advantage of any recovery in the energy sector. And they're forecasting decent earnings growth of about 7.8% annually on average over the next three to five years.
Emerson has paid dividends since 1956 and has boosted its annual payout for 63 consecutive years, including its last increase – 2% to 50 cents per share – in November 2019. Over the past 12 months, EMR has returned $1.2 billion to shareholders through dividends, and another $1.19 billion in stock buybacks.
Sysco
- Market value: $26.9 billion
- Dividend yield: 3.4%
- Consecutive annual dividend increases: 51
- Analysts' opinion: 2 Strong Buy, 3 Buy, 7 Hold, 0 Sell, 1 Strong Sell
Sysco (SYY, $53.02), a food services and restaurant supply company, is generating sales growth by making acquisitions.
In January 2019, SYY bought Waugh Foods – an Illinois broadline distributor with approximately $40 million in annual sales. The company also picked up Upsys, J. Kings Food Service Professionals, and J&M Wholesale Meats last year. Other notable moves include SYY's 2016 deal for European services and supplies company Brakes Group, as well as the Supplies on the Fly e-commerce platform that same year. In February 2018, it picked up Doerle Food Services, a Louisiana broadline distributor with approximately $250 million in annual foodservice distribution sales.
However, Sysco has been able to generate plenty of growth on its own, too. The combination of organic and M&A-based growth has produced a steady ramp-up in revenues for years.
But the coronavirus pandemic has really weighed on optimism of late. Analysts, which had been projecting average earnings growth of about 11.3% for the next half-decade, are now looking for about half that.
Still, Sysco should maintain its spot among the best dividend stocks for payout growth, even if a payout ratio of 63% means that growth likely will be modest, at least in the short term.
SYY's streak has lasted more than half a century and includes a 15% hike to 45 cents per share, announced in November 2019.
Cincinnati Financial
- Market value: $11.0 billion
- Dividend yield: 3.5%
- Consecutive annual dividend increases: 60
- Analysts' opinion: 1 Strong Buy, 1 Buy, 2 Hold, 2 Sell, 1 Strong Sell
Cincinnati Financial (CINF, $68.30) boasts one of the Dividend Aristocrats' longest streaks of consecutive annual dividend increases. Indeed, on Jan. 31, the property and casualty insurer lifted its payout for a 60th straight year. The company improved its quarterly dividend by 5.7%, to 56 cents per share.
Income growth might be meager in the very short term. CINF is one of many insurers that have been belted by COVID-19.
Cincinnati Financial, whose offerings include life insurance, annuities, umbrella insurance and a wide range of business insurance products, is expected to see profits contract on average over the next fiver years, though that's largely due to coronavirus-related effects on earnings in 2020, according to S&P Global Market Intelligence data.
NEW ARISTOCRAT: Essex Property Trust
- Market value: $14.9 billion
- Dividend yield: 3.6%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 5 Strong Buy, 3 Buy, 14 Hold, 2 Sell, 0 Strong Sell
Essex Property Trust (ESS, $228.12) is another new addition to the Dividend Aristocrats for 2020. The real estate investment trust (REITs), which invests in apartments, primarily on the West Coast, became publicly traded in 1994 and has been hiking its payout ever since.
The most recent increase came in February 2020, when ESS lifted the quarterly dividend 6.5% to $2.0775 per share.
Although the dividend is what makes ESS stand out, it typically pleases investors with price appreciation, too. However, losses in 2020 have been far deeper than the S&P 500 as investors worry about the prospects for unpaid rents later this year.
Coca-Cola
- Market value: $194.2 billion
- Dividend yield: 3.6%
- Consecutive annual dividend increases: 58
- Analysts' opinion: 10 Strong Buy, 6 Buy, 6 Hold, 0 Sell, 0 Strong Sell
Coca-Cola (KO, $45.21) has long been known for quenching consumers' thirst, but it's equally effective at quenching investors' thirst for income. The company's dividend history stretches back to 1920, and the payout has swelled for 58 consecutive years. The last hike, announced in February 2020, was admittedly modest, though, at 2.5% to 41 cents per share.
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.
The latest big-name deal made by Coca-Cola came in 2018, when it acquired Costa Limited, which owns the popular Costa Coffee brand that operates in more than 30 countries. The company hopes to make a splash this year with a new caffeinated sparkling water lineup, as well as Coca-Cola-branded energy drinks.
Genuine Parts
- Market value: $12.5 billion
- Dividend yield: 3.6%
- Consecutive annual dividend increases: 64
- Analysts' opinion: 2 Strong Buy, 0 Buy, 12 Hold, 1 Sell, 0 Strong Sell
Automotive and industrial replacement parts maker Genuine Parts (GPC, $86.84) 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.
Since its founding in 1928, Genuine Parts has pursued a strategy of acquisitions to fuel growth. In July 2019, it bought Todd Group, a French distributor of truck parts and accessories for the heavy-duty market.
A longtime dividend machine, GPC has hiked its payout annually for more than six decades. That includes a nearly 4% improvement to its distribution, to 79 cents per share, announced this February.
Archer Daniels Midland
- Market value: $21.8 billion
- Dividend yield: 3.7%
- Consecutive annual dividend increases: 46
- Analysts' opinion: 4 Strong Buy, 3 Buy, 7 Hold, 0 Sell, 0 Strong Sell
Archer Daniels Midland (ADM, $39.22) 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 450 crop procurement locations, as well as more than 330 ingredient plants.
But it's a slow-growth business, too. Analysts surveyed by S&P Global Market Intelligence expect ADM's earnings to rise at an average annual rate of just 6% for the next five years.
Archer Daniels Midland has paid out dividends on an uninterrupted basis for 88 years. On Jan. 30, ADM raised its quarterly dividend by a little less than 3% to 35 cents per share, marking its 46th consecutive year of dividend hikes.
3M
- Market value: $89.1 billion
- Dividend yield: 3.8%
- Consecutive annual dividend increases: 62
- Analysts' opinion: 2 Strong Buy, 1 Buy, 13 Hold, 1 Sell, 2 Strong Sell
The last couple of years have been unkind to industrial conglomerate 3M (MMM, $154.82). The Dow component, which makes everything from adhesives to electric circuits, has seen its stock lose nearly a third of its value since the beginning of 2018, hurt partly by sluggish demand from China.
However, whatever the shorter-term holds for 3M's share price, investors can bank on the conglomerate's steady payouts over the long haul.
While inclusion in the S&P 500 Dividend Aristocrats requires a minimum of 25 years of uninterrupted annual dividend growth, MMM has much more – its dividend has improved annually for 62 consecutive years, and the payout dates back more than a century. The last hike was a 2% increase announced in early February 2020.
Nucor
- Market value: $12.4 billion
- Dividend yield: 3.9%
- Consecutive annual dividend increases: 47
- Analysts' opinion: 4 Strong Buy, 2 Buy, 6 Hold, 1 Sell, 0 Strong Sell
Shareholders in Nucor (NUE, $41.18), the largest U.S. steelmaker, saw 2020 as the year in which business gets back to normal after a few years of turbulence due slower global growth and tariffs.
So much for that.
Still, investors have plenty of proof that Nucor is dedicated to growing its dividend.
For one, it has a decent 62% payout ratio that should allow for modest dividend growth going forward. Moreover, Nucor has increased its payout for 47 consecutive years, or every year since it first began paying dividends in 1973. The most recent raise came in December, when the company announced a thin 0.6% improvement in its dividend, to 40.25 cents per share, for the distribution to be made Feb. 11.
Nucor has returned approximately $6 billion in cash to its stockholders in the form of dividends and share repurchases over the past decade, the company says.
Cardinal Health
- Market value: $14.7 billion
- Dividend yield: 3.9%
- Consecutive annual dividend increases: 35
- Analysts' opinion: 3 Strong Buy, 1 Buy, 15 Hold, 0 Sell, 1 Strong Sell
A steady stream of acquisitions helped wholesale drug and medical device distributor Cardinal Health (CAH, $50.22) become the giant that it is today.
More recently, Cardinal Health had to recall 9 million substandard surgical gowns, which sent hospitals scrambling. CAH said its Chinese supplier outsourced some of the surgical gown production work to a "non-registered, non-qualified facility" where Cardinal couldn't assure its sterility.
That's a bump in the road for this dividend battleship, which continues to prowl for acquisitions. CAH's last big deal was completed in summer 2017, when it acquired Medtronic's Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency business for $6.1 billion.
On the dividend front, Cardinal Health has upped the ante on its annual payout for 35 years and counting. The Dividend Aristocrat last raised its dividend in May, when it announced a small 1% increase to 48.59 cents per share.
Consolidated Edison
- Market value: $24.2 billion
- Dividend yield: 4.2%
- Consecutive annual dividend increases: 46
- Analysts' opinion: 2 Strong Buy, 1 Buy, 9 Hold, 4 Sell, 3 Strong Sell
Consolidated Edison (ED, $72.50) 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 longtime Dividend Aristocrat has been able to hike its annual distribution without interruption for more than four decades. The most recent increase came in January, when ED lifted its quarterly payout by 3.4% to 76.5 cents per share.
Walgreens Boots Alliance
- Market value: $37.0 billion
- Dividend yield: 4.3%
- Consecutive annual dividend increases: 44
- Analysts' opinion: 0 Strong Buy, 1 Buy, 20 Hold, 0 Sell, 2 Strong Sell
Tracing its roots back to a single drugstore founded in 1901, Walgreens Boots Alliance (WBA, $42.22) has boosted its dividend every year for more than four decades. Mostly recently, in July 2019, it declared a hike of 4%.
Walgreen Co. merged with Alliance Boots – a Switzerland-based health and beauty multinational – in 2014 to form the current company. Walgreens Boots Alliance and its predecessor company have paid a dividend in 350 straight quarters (more than 86 years) and have raised the payout for 44 consecutive years, the company says.
With a payout ratio of 47% of profits, investors can expect WBA's streak to continue.
NEW ARISTOCRAT: Amcor
- Market value: $16.7 billion
- Dividend yield: 4.3%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 4 Strong Buy, 2 Buy, 5 Hold, 1 Sell, 0 Strong Sell
Amcor (AMCR, $10.62) 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.
Sometimes boring is beautiful, and that's the case with Amcor. 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 analyst community expects the company to deliver average annual earnings growth of 8%. Also, with a yield of more than 4%, AMCR is one of the more generous Dividend Aristocrats.
Leggett & Platt
- Market value: $4.6 billion
- Dividend yield: 4.6%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 1 Strong Buy, 0 Buy, 5 Hold, 0 Sell, 0 Strong Sell
Leggett & Platt (LEG, $35.09) 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 dividend champion for long-term investors. Leggett & Platt's payout has gotten better for 48 consecutive years and in 56 of the past 57 years. Most recently, LEG announced a 5.3% improvement, to 40 cents per share, in May 2019. May 2020 came and went without a raise, however, so income investors should keep close watch over this one.
The delay, as well as a somewhat elevated payout ratio near 70%, indicates that whenever the next dividend increase comes, it likely will be modest.
NEW ARISTOCRAT: Realty Income
- Market value: $20.1 billion
- Dividend yield: 4.8%
- Consecutive annual dividend increases: 26
- Analysts' opinion: 10 Strong Buy, 2 Buy, 11 Hold, 0 Sell, 0 Strong Sell
Realty Income (O, $58.57) is another REIT that investors can rely on for steady income, but there's another aspect to this stock that might suit certain income investors: Realty Income is a rare breed of monthly dividend stocks.
The company owns more than 6,500 commercial real estate properties that are leased out to more than 630 tenants – including Walgreens, 7-Eleven, FedEx (FDX) and Dollar General (DG) – operating in 51 industries. These are mostly retail-focused businesses with strong financial health.
Realty Income generates very predictable cash flow thanks to the long-term nature of its leases, which should keep the monthly dividend payments coming. Indeed, O shares have delivered more than 599 consecutive monthly dividends to date, including 91 consecutive quarterly increases. The current 23.35-cent distribution is about 3% larger than it was a year ago.
AbbVie
- Market value: $175.1 billion
- Dividend yield: 4.8%
- Consecutive annual dividend increases: 48
- Analysts' opinion: 10 Strong Buy, 4 Buy, 5 Hold, 0 Sell, 0 Strong Sell
AbbVie (ABBV, $99.35) is one of the highest yielders on this list of payout-improving dividend stocks. As mentioned earlier, the pharmaceutical maker was spun off from Abbott Laboratories in 2013, and like its parent, it carries a longstanding dividend-growth streak that allowed it to remain among the Dividend Aristocrats.
Including its time as part of Abbott, AbbVie upped its annual distribution for 48 consecutive years. The last hike, declared in November 2019, was a 10.3% bump to $1.18 per share for the dividend to be paid in February 2020.
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.
All told, AbbVie's pipeline includes dozens of products across various stages of clinical trials.
Federal Realty Investment Trust
- Market value: $6.2 billion
- Dividend yield: 5.1%
- Consecutive annual dividend increases: 52
- Analysts' opinion: 9 Strong Buy, 2 Buy, 8 Hold, 0 Sell, 1 Strong Sell
Real estate investment trusts such as Federal Realty Investment Trust (FRT, $82.32) 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.
Few have been steadier than FRT.
Federal Realty Investment Trust – which owns retail and mixed-use real estate in several major metropolitan areas – has now hiked its payout every year for more than half a century. FRT has registered roughly 59% dividend growth over the past decade, including a 2.9% improvement to the cash distribution announced in August 2019.
Franklin Resources
- Market value: $10.2 billion
- Dividend yield: 5.2%
- Consecutive annual dividend increases: 38
- Analysts' opinion: 1 Strong Buy, 0 Buy, 8 Hold, 3 Sell, 2 Strong Sell
The name Franklin Resources (BEN, $20.67) 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 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.
The asset manager has raised its dividend annually since 1981, including a 4% hike to 27 cents per share quarterly announced in December 2019.
Chevron
- Market value: $161.1 billion
- Dividend yield: 6.0%
- Consecutive annual dividend increases: 33
- Analysts' opinion: 8 Strong Buy, 9 Buy, 7 Hold, 1 Sell, 0 Strong Sell
Chevron (CVX, $86.31) 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 oil prices have yet again been under attack, this time thanks to the COVID recession, not to mention a brief oil-price war between Saudi Arabia and Russia.
Still, with more than three decades of uninterrupted dividend growth under its belt, Chevron's track record instills confidence that the payouts will continue. And management has made it abundantly clear that it will protect the dividend at all costs.
The most recent hike came in January, when CVX lifted its quarterly dividend by more than 8% to $1.29 per share.
People's United Financial
- Market value: $4.7 billion
- Dividend yield: 6.6%
- Consecutive annual dividend increases: 27
- Analysts' opinion: 0 Strong Buy, 1 Buy, 14 Hold, 0 Sell, 0 Strong Sell
People's United Financial (PBCT, $11.00) is a rare banking play in this collection of dividend stocks. The regional financial services firm – which operates more than 400 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine – has more than $60 billion in total assets. The venerable New England institution traces its roots back to 1842.
PBCT was added to the Dividend Aristocrats in January 2019. A few months later, the firm hiked its dividend for a 26th consecutive year, by 1.4% to 17.75 cents per share. 2020's increase was a similarly small 1.4% to 18 cents per share. The company's payout ratio of 55% is plenty safe, but there currently is pressure on banks to not overextend themselves via dividends and buybacks.
AT&T
- Market value: $216.0 billion
- Dividend yield: 6.9%
- Consecutive annual dividend increases: 36
- Analysts' opinion: 7 Strong Buy, 3 Buy, 21 Hold, 0 Sell, 10 Strong Sell
Telecommunications stocks are synonymous with dividends. Customers pay for service every month, which ensures a steady stream of cash for these dividend stocks.
AT&T (T, $30.32) – the largest U.S. telecom company – is a perfect example.
AT&T has raised its dividend on an annual basis for 36 consecutive years, and typically boasts one of the highest 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 almost 70% of the U.S. wireless subscriptions market, according to data from Statista.
That said, the dividend growth isn't exactly breathtaking. AT&T's most recent increase was a 2% uptick announced in December, to 52 cents per share. That continues a years long streak of penny-per-share hikes.
Exxon Mobil
- Market value: $182.9 billion
- Dividend yield: 8.1%
- Consecutive annual dividend increases: 37
- Analysts' opinion: 3 Strong Buy, 0 Buy, 17 Hold, 0 Sell, 4 Strong Sell
A descendant of John D. Rockefeller's Standard Oil, today's Exxon Mobil (XOM, $43.24) remains one of the world's largest energy companies and is the biggest oil company by market value in the U.S.
As a dividend stalwart – Exxon and its various predecessors have strung together uninterrupted payouts since 1882 – XOM has continued to hike its payout even as oil prices declined in recent years. The Dow component has increased its dividend for 37 consecutive years, and has done so at an average annual rate of 6.2%. That includes a 6.1% boost to its quarterly checks announced in late April 2019.
However, oil-price issues and operational underperformance drove the stock to decade lows in March, and the stock has only partially recovered since then. A 38% year-to-date loss, meanwhile, has driven its yield up to 8%, and whether Exxon remains an Aristocrat is now an open question after the company merely maintained its payout in April.
Fortunately for Exxon, even if it maintains its payout this year, its dividend will have improved on an annual basis in 2020. But it must raise its payout by the end of 2021 to remain a Dividend Aristocrat.
