Jon C. Ogg| 24/7 Wall Street
Investors love dividends.
Dividends can boost returns and be used to supplement retirement income and improve lifestyle. What really rewards investors over time is when companies keep raising their dividend payments year after year. The so-called Dividend Aristocrats are S&P 500 companies that have raised their dividends for 25 straight years or longer. Yet some companies have an even longer track record – raising their dividends for 40, 50, or even 60 consecutive years.
24/7 Wall Street has identified 25 mid- to large-cap, well-established companies that have raised their dividends for at least 40 consecutive years. That is one heck of a track record for rewarding long-term investors.
Almost all of these companies should also be able to keep raising dividends as they are expected to have stable earnings in the years ahead. Many of the companies have even stated officially that they intend to keep raising dividends and returning capital to their shareholders.
Over time, dividends can add significant value to a portfolio. Though in recent decades the contribution of dividends has not been as significant. From 1930–2017, dividends income contributed an average of 42 percent to the total return of the S&P 500 Index.
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Long-term investors in companies with increasingly higher dividends have historically also seen increasingly higher share prices over time. When dividends are reinvested, the cost basis – the original value of the stock – rises by the dividend amount. Consequently, the dividend yield may also be higher than what current investors would get.
Not all dividends are created equally. In a quality screening process of companies with dividend hikes, 24/7 Wall Street excluded companies that might have trouble increasing their payout in the years ahead. While such estimates for dozens of companies cannot be an exact science, most investors know that share prices get hurt when a company has to lower its dividend payment, knocking investors with a one-two punch.
Most of the companies with established long-term dividend hikes should be household names to many Americans, even among non-investors. Some of these companies are also members of the Dow Jones Industrial Average, but not as many as you might think. As of April 2018, only about one-third of the current 30 Dow stocks even had a 25 consecutive year history of dividend hikes.
If a company has a record of more than 40 consecutive years of dividend hikes, then it has a longer track record than most adults have even been investing.
Listed alphabetically are the 25 companies that have a track record of 40 years and longer of dividend hikes. We included the number of years of consecutive dividend hikes, when the company last hiked its dividend, and the current yield. We have also included basic data and information on each company.
Abbott Labs
•Years of hike: 46
• Last hike: December 2017
• Yield: 1.7 percent
Abbott Laboratories (NYSE: ABT) has now been hiking dividends for 46 straight years. The current yield is 1.7 percent. The last hike in December of 2017 increased the quarterly dividend from $0.265 to $0.28 per share. Abbott is a global health care company selling diagnostics, medical devices, nutritional products, and branded generic pharmaceuticals. It employs more than 90,000 workers and has a presence in over 150 countries.
ADP
• Years of hike: 43
• Last hike: April 2018
• Yield: 1.9 percent
Automatic Data Processing, Inc. (NASDAQ:ADP) handles enough small, medium, and large business accounts for payrolls, human resource functions, and tax services that it is even able to create its in-house economic reading on the entire U.S. jobs market. The company's board approved in April a 10 percent dividend boost, result of a tax benefit from the new law that lowers corporate taxes, Tax Cuts and Jobs Act of December 2017.
ADP's board also announced it would consider another dividend increase in November 2018 to be consistent with its historical pattern throughout its 43-year track record of annual dividend increases.
Becton Dickinson
• Years of hike: 45
• Last hike: November 2017
• Yield: 1.2 percent
Becton Dickinson and Co. (NYSE: BDX) is a medical device and medical technology company dating back to 1897, when it was founded by Maxwell Becton and Fairleigh Dickinson. The company targets diabetes care, medication management, pharmaceutical systems, diagnostic systems, and biosciences. You may not know its key brands by name, but chances are you have seen the company's products if you have been to a doctor's office, hospital, or any medical facility.
California Water
• Years of hike: 51
• Last hike: January 2018
• Yield: 1.8 percent
California Water Service Group (NYSE: CWT) provides regulated and non-regulated water service via its utilities to approximately 2 million people in more than 100 communities in California, Washington, New Mexico, and Hawaii. The January 2018 dividend hike of about 4 percent in the payout now generates a 1.8 percent dividend yield. That may seem low for a utility, but water has been considered a defensive sector for some time, and investors have had to pay a premium to own the few public water companies.
Cincinnati Financial
• Years of hike: 58
• Last hike: January 2018
• Yield: 2.8 percent
Insurance company Cincinnati Financial Corporation (Nasdaq: CINF) defied the Great Recession and stayed healthy throughout. The insurance company raised its book value per share by 17 percent in 2017, and even paid a special dividend in late 2017 due to the company's equity portfolio appreciation exceeding expectations.
The company said its last dividend hike announcement set the stage for its 58th consecutive year of regular annual dividend hikes. The company offers business, home, and auto and other forms of insurance through The Cincinnati Insurance Companies.
Clorox
• Years of hike: 41
• Last hike: February 2018
• Yield: 2.7 percent
The Clorox Company (NYSE: CLX) increased its dividend payout by 14 percent in February of 2018 on the heels of tax reform. The consumer products giant said at the time that dividends paid to Clorox shareholders have increased each year since 1977. Clorox may be best known for its namesake bleach brand, but it has other great brands such as Pine-Sol, Liquid Plumr, Fresh Step cat litter, Glad plastic bags, Kingsford charcoal, Hidden Valley dressings and sauces, Brita water-filtration, and even Burt's Bees natural personal care products. The company opened its doors in 1913.
Coca-Cola
• Years of hike: 56
• Last hike: February 2018
• Yield: 3.4 percent
Coca-Cola Co. (NYSE: KO) had been a dead-money stock for years, but the soda-maker has been steadily diversifying into other drinks besides sugar-loaded sodas. The company has also paid dividends for more years than most investors have had their portfolios. When the beverage giant hiked its quarterly dividend to $0.39 from $0.37 per share in February 2018, it marked the 56th consecutive annual dividend increase. A top holding of Warren Buffett's Berkshire Hathaway for years now, Coca-Cola's market cap is almost $200 billion.
Consolidated Edison
• Years of hike: 44
• Last hike: January 2018
• Yield: 3.6 percent
Consolidated Edison, Inc. (NYSE: ED), or ConEd as many customers know it, is a regulated utility company, providing electricity and gas in New York City and the surrounding areas. Founded in 1823 as the New York Gas Light company, the company is nearing 200 years of operations. The company declared a quarterly dividend of 71.5 cents per common share in January of 2018 – an annualized increase of 10 cents over the previous year.
Dover
• Years of hike: 63
• Last hike: August 2018
• Yield: 2.3 percent
Dover Corp. (NYSE: DOV) is a diversified global manufacturer of equipment, components, systems and solutions in four segments: engineered systems, fluids, refrigeration and food equipment, and energy. The 2017 hike marked the 62nd consecutive year of hikes. Looking ahead, the company's CEO expects more acquisitions that would contribute to higher margins and completion of the current share buy back program. The 2018 hike marked the 63rd consecutive year of hikes.
Hormel Foods
• Years of hike: 52
• Last hike:
• Yield: 2.0 percent
Hormel Foods Corp. (NYSE: HRL) is a top pre-packaged foods company that dates back to 1891. While Spam may be far from health food, Hormel has been moving toward the more healthy choices that consumers are demanding.
In February of 2018, the company said that it expects a full-year 2018 tax rate of 17.5 percent to 20.5 percent, down from 32.3 percent to 33.3 percent. It also reiterated its "unwavering commitment to returning cash back to [its] shareholders in the form of consistent dividend increases and share buybacks..." The maker of Spam and other packaged and prepared foods has hiked its dividend for 52 consecutive years.
Federal Realty
• Years of hike: 50
• Last hike: January 2018
• Yield: 3.1 percent
Federal Realty Investment Trust (NYSE: FRT) is a high-end retail property real estate investment trust (REIT), and it holds the record among all REIT equities for having 50 annual dividend hikes. Federal Realty has more than 100 properties and over 2,900 tenants in approximately 24 million square feet. The company also owns over 2,000 residential units. The company's entire $1.00 quarterly payout was in the form of taxable ordinary income.
Genuine Parts
• Years of hike: 62
• Last hike: February 2018
• Yield: 2.9 percent
Genuine Parts Company (NYSE: GPC), a distributor of automotive replacement parts in the United States and abroad, most recently raised its dividend payout by about 7 percent and it now yields 2.9 percent. GPC has paid a cash dividend every year since going public in 1948, and 2018 marks the 62nd consecutive year of dividend hikes.
Johnson & Johnson
• Years of hike: 56
• Last hike: April 2018
• Yield: 2.7 percent
Johnson & Johnson (NYSE: JNJ) produces and sells many branded medical products, drugs, and consumer products with a long term goal of continued earnings per share growth. The J&J board raised its dividend payout to $0.90 per share from $0.84, a 7 percent hike.
J&J also seems to overcome every major hurdle from product liabilities that comes its way. The company reports near-annual product recalls. In March 2018, more than 100,000 lawsuits were filed against the health giant.
Kimberly-Clark
• Years of hike: 46
• Last hike: January 2018
• Yield: 3.5 percent
Kimberly-Clark Corp. (NYSE: KMB) announced in January of 2018 – along with its 2018 outlook and restructuring plans – that 2018 will mark the 46th consecutive year of dividend hikes. The consumer products giant is the maker and seller of such name brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex, and Depend.
The company has presence in more than 175 countries and claims to have either the No. 1 or No. 2 share of the market in 80 of them.
Leggett & Platt
• Years of hike: 47
• Last hike: May 2018
• Yield: 3.4 percent
Leggett & Platt, Inc. (NYSE: LEG) increased its dividend by almost 6 percent to $0.38 per share from $0.36 per share in May of 2018 at the annual meeting.
Leggett & Platt is a 135-year old U.S. manufacturer of bedding components, auto seat support and lumbar systems, components for home and office furniture, flooring underlayment, adjustable beds, high-carbon drawn steel wire, and bedding industry machinery.
3M
• Years of hike: 60
• Last hike: January 2018
• Yield: 2.7 percent
3M Co. (NYSE: MMM) has noted that it has paid its shareholders for more than 100 consecutive years. The diversified conglomerate, which manufactures many products used by households and businesses every day, has increased its annual dividend for 60 consecutive years. The company's market cap is over $120 billion.
Nucor
• Years of hike: 45
• Last hike: December 2017
• Yield: 2.4 percent
Nucor Corporation (NYSE: NUE), one of the top manufacturers of steel products in America, announced in December 2017 it was increasing its regular quarterly cash dividend on its common stock to $0.38. The company has increased its regular or base dividends for 45 consecutive years. Since the implementation of tariffs on steel imports, the company has benefited from higher steel prices and reported surging profits.
Pentair
• Years of hike: 42
• Last hike: December 2017
• Yield: 1.6 percent
Pentair plc (NYSE: PNR) has adopted a slow and steady increase to its dividend. Late last year, the company announced a board-approved 1 percent dividend hike, which makes 2018 the 42nd consecutive year the company has increased its dividend. The water products manufacturer also has a payout ratio of less than half of its adjusted earnings, allowing room for dividend hikes in the future even if the economy experiences a slowdown.
That said, Pentair just completed splitting itself into two companies, Pentair and nVent. Prior to the spin-off of nVent Electric plc, Pentair paid a regular cash dividend of $0.35 per share in the second quarter of 2018. Pentair previously announced on May 8, 2018 that its Board of Directors approved a regular cash dividend of $0.175 per share for the third quarter of 2018. Adjusted for the spin-off of nVent Electric plc, 2018 marks the 42nd consecutive year that Pentair has increased its dividend.
Pepsico
• Years of hike: 46
• Last hike: May 2018
• Yield: 3.3 percent
PepsiCo Inc. (NYSE: PEP) has raised dividends for 46 straight years. The current yields is 2.9 percent. The beverage giant owns more than bottled soda, water, and sporting drinks. It is also one of the top snack food producer with Lay's chips, Quaker Oats, and other brands. The new $0.9275 per share dividend is a 15 percent increase from the prior payout. PepsiCo has paid consecutive quarterly cash dividends since 1965.
Procter & Gamble
• Years of hike: 62
• Last hike: April 2018
• Yield: 3.5 percent
Procter & Gamble Co. (NYSE: PG) raised its dividend yet again in April of 2018. The largest pure-play consumer products maker has a $200 billion market value, but the maker of Tide detergent, Pampers baby diapers, and Gillette razors among other brands, remains in a long transitionary period of focusing on growth brands and calibrating certain operations. P&G has been paying dividends for 128 straight years, dating back to its inception since 1890. The payout hike in 2018 was the 62nd consecutive annual dividend increase.
Stanley Black & Decker
• Years of hike: 51
• Last hike: July 2018
• Yield: 1.9 percent
Stanley Black & Decker Inc. (NYSE: SWK) joined the list of companies with 50 consecutive annual dividend increases in 2017. This year marks its 51st year of consecutive dividend hikes. The maker of power tools, accessories, hardware, and home improvement products has said that it remains committed to hikes in the future.
Target
• Years of hike: 47
• Last hike: June 2018
• Yield: 3.0 percent
Target Corp. (NYSE: TGT) increased its dividend by more than 3 percent (to $0.64 from $0.62) in June of 2018, the 47th straight year of hikes. The retailer also noted it was the 204th consecutive quarterly dividend paid since October 1967, when the company became publicly held. Target has a 3.0 percent yield.
Walgreens Boots Alliance
• Years of hike: 43
• Last hike: June 2018
• Yield: 2.5 percent
Walgreens Boots Alliance, Inc. (Nasdaq: WBA) last increased its dividend in mid-2018. The pharmacy store chain raised the dividend by more than 10 percent to an annual rate of $1.66 per share. This marked the 43rd consecutive year that Walgreens Boots Alliance and its predecessor company, Walgreen Co., have raised the dividend. The combined company remains US-based, but its footprint is now larger than the familiar Walgreens drug store. In June, Walgreens replaced General Electric in the Dow Jones industrial Average.
Walmart
• Years of hike: 45
• Last hike: February 2018
• Yield: 2.2 percent
Walmart Inc. (NYSE: WMT) hiked its dividend in February of 2018 for the 45th straight year. Walmart yields 2.2 percent. The company needs no introduction other than being the world's largest retailer with annual sales nearing the $500 billion mark.
That said, Walmart has been expanding its ecommerce, services, and other efforts to compete against the Amazon onslaught on brick-and-mortar retailers. The company also went so far as to drop the "Stores" name from its official Walmart corporate name.
W.W. Grainger
• Years of hike: 47
• Last hike: April 2018
• Yield: 1.5 percent
W.W. Grainger, Inc. (NYSE: GWW), a top broad line supplier of maintenance, repair, and operating products, now has annual sales above $10 billion with operations in North America, Europe, Asia and Latin America. Grainger has delivered 47 consecutive years of dividend hikes.
"Our consistent history of increasing the dividend illustrates our confidence in our strategy and our focus on managing the business for the long term while creating value for our shareholders," said CEO Donald G. Macpherson commenting on the company's steady dividend hikes in a recent press release.
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