Dividend growth investors may be familiar with the Dividend Aristocrats, a group of blue chip stocks in the S&P 500 Index that have each raised their dividends for at least 25 consecutive years. But there is a lesser-known group of stocks with even more impressive dividend streaks. This exclusive group is known as the Dividend Kings. They’ve increased their dividends for at least 50 years in a row. While there are currently 65 Dividend Aristocrats, there are just 31 Dividend Kings.
Dividend Kings List
Dividend Kings come from a variety of different market sectors. However, the following list of 15 Dividend Kings all share a few key qualities: durable competitive advantages, long-term growth potential, and a proven ability to outlast recessions.
1. Altria Group (MO)
First on the list of Dividend Kings is Altria Group – a tobacco giant with its flagship Marlboro brand. But the company has increasingly expanded its product portfolio in recent years due to the long-running trend of falling smoking rates. Altria owns multiple smokeless tobacco brands. It also has a wine business under the Ste. Michelle brand and it owns 10% of global beer giant Anheuser-Busch InBev (BUD).
More recently, Altria has targeted two additional product categories for growth, vaping and cannabis. Altria owns a 35% stake in e-cigarette maker Juul and a 45% stake in cannabis producer Cronos Group (CRON).
The company is also rolling out its own heated and vapor products such as Marlboro HeatSticks and IQOS. Both of which are slowly gaining expansion across the U.S.
In the meantime, Altria’s legacy tobacco products are cash cows, allowing the company to pay a high dividend yield of 7%. The company has a target dividend payout ratio of 80% in terms of annual adjusted earnings-per-share.
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2. Colgate-Palmolive (CL)
Colgate-Palmolive is a consumer staples company with an extensive portfolio of famous brands, including Colgate, Palmolive, Tom’s of Maine, Ajax, and Hill’s.
The company has a unique advantage, which is its elevated level of exposure to emerging markets. Indeed, these are under-developed nations that broadly have higher rates of economic growth than more developed markets. Colgate-Palmolive generated 44% of its 2020 revenue from emerging markets in such markets as Latin America and Asia-Pacific.
As a result, Colgate-Palmolive could have better long-term growth prospects than the typical Dividend King. In the meantime, the company continues to reward shareholders with rock-solid dividends. Colgate-Palmolive has paid uninterrupted dividends on its common stock since 1895. It has also increased its dividend for 58 consecutive years.
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3. National Fuel Gas (NFG)
Third on the list of Dividend Kings is National Fuel Gas, a diversified energy company. Its largest segment is Exploration & Production, which includes over 800 million cubic feet per day of natural gas production. The company also operates midstream infrastructure such as pipelines and storage facilities. National Fuel Gas also has a downstream business with over 700,000 utility customers.
National Fuel Gas is a rare example of a stable and consistent energy stock. The energy industry is notoriously cyclical, particularly when it comes to exploration and production activities that rely on the underlying commodity price. As a result, National Fuel Gas is the only energy stock on the list of Dividend Kings. It is also among the highest-yielding Dividend Kings, with a solid 3.5% current yield.
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4. Genuine Parts Company (GPC)
Genuine Parts Company got founded in 1928, and since that time, it has grown into a sprawling conglomerate that sells automotive and industrial parts, electrical materials, and general business products. Further, Genuine Parts’ flagship business is its NAPA automotive parts stores.
The company has a long history of steady growth. In its 93 years as a company, sales and profits have increased in 87 and 76 years, respectively.
Genuine Parts expects to pay a cash dividend of $3.26 per share for 2021, representing a 3% increase from 2020. Further, it means 2021 will be the company’s 65 consecutive years of paying increased dividends, which gives it one of the longest streaks among the Dividend Kings. Shares currently yield 2.5%.
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5. Procter & Gamble (PG)
Procter & Gamble is fifth on our list of dividend kings. P&G is a consumer products giant. Notable brands include Pampers, Tide, Bounty, Charmin, Gillette, Crest, and more. Moreover, the company generated $71 billion in sales in fiscal 2020.
Such an extensive portfolio of top brands has allowed P&G to reward its shareholders for decades. P&G has paid a dividend for 131 years and has increased its dividend for 65 consecutive years.
P&G’s dividend growth rate has accelerated in recent years thanks to its renewed focus on efficiency. In addition, P&G divested multiple slow-growth brands over the past five years. Significant divestments include the sale of Duracell to Warren Buffett’s Berkshire Hathaway (BRK.B) and a collection of over 40 beauty brands to Coty (COTY).
These efforts unlocked higher profit margins and, therefore, higher dividend increases. For example, the most recent annual raise was a 10% hike. Shares currently yield 2.6%.
6. Johnson & Johnson (JNJ)
Johnson & Johnson is the largest U.S. healthcare company, with a market cap above $400 billion and over $80 billion in annual sales. J&J has a diversified business model across pharmaceuticals, medical devices, and consumer health products. The company has 28 individual platforms or products that each generates over $1 billion in annual revenue.
Holding leadership positions across the healthcare spectrum has enabled strong growth over many years. J&J has averaged 6% operational sales growth and 8% adjusted EPS growth per year over the past 20 years. In 2020, the company generated over $20 billion of free cash flow.
Such a strong level of cash generation means the company can reward shareholders. Indeed, J&J has increased its dividend payout for 59 consecutive years, and the stock currently yields 2.5%.
7. The Coca-Cola Company (KO)
Seventh on the list of Dividend Kings is Coca-Cola, the largest non-alcoholic beverage company in the world. But the declining rate of soda consumption in mature markets like the U.S. poses a challenge.
In response, Coca-Cola has invested heavily in juice and tea. The nearly $5 billion purchase of Costa gave it instant exposure to coffee. At the time of the acquisition, Coca-Cola stated that the global coffee market was growing at 6% per year.
Coca-Cola’s higher-growth categories leave it with favorable long-term prospects. As a result, company management expects long-term organic sales growth of 4%-6% per year, leading to earnings-per-share growth of 7%-9% annually.
And, this is more than enough growth for Coca-Cola to continue increasing its dividend each year, as it has done for 59 years in a row.
8. Hormel Foods (HRL)
Hormel is a large food products company that generates annual sales of approximately $10 billion. Some of its core brands include Skippy, SPAM, Applegate, Justin’s, Jennie-O, and more than 30 others.
These brands have led to steady growth for years. Since 2010, Hormel’s diluted earnings-per-share grew at an 8.6% annual rate through 2020. This type of consistent growth has allowed Hormel to increase its dividend for 55 consecutive years.
Hormel’s impressive history of growth is due to its brand strength and the defensive nature of its products. Hormel products are either #1 or #2 in over 40 categories. These brands also hold up exceptionally well during economic downturns.
9. Sysco Corporation (SYY)
Sysco is the largest wholesale food distributor in the United States. It now serves approximately 600,000 locations with food delivery, including restaurants, hospitals, schools, hotels, and other facilities.
Sysco has been adversely impacted by the coronavirus pandemic, which caused the closures of restaurants, schools, and other dining venues. As a result, the company’s sales and profits have fallen significantly. Over the first half of its current fiscal year, Sysco’s sales fell by 23% compared with the same six-month period the year before.
While Sysco has been hit hard by the pandemic, it also stands to benefit from the recovery significantly. Investors expect a quick snap-back once restaurants and other dining locations are fully open. To be sure, this explains why Sysco stock is near all-time highs. Shares currently yield 2%.
10. Lowe’s Companies (LOW)
Lowe’s is a home improvement retailer, operating more than 2,200 home improvement and hardware stores in the U.S. and Canada. And, Lowe’s is simply firing on all cylinders right now. It has benefited from multiple growth tailwinds, including low interest rates, as well as the robust housing and construction markets over the past decade.
In fiscal 2020, Lowe’s grew its net sales 25% to $89 billion. As a result, adjusted earnings per share soared 54%. from $5.74 to $8.86.
The company’s impressive financial results allow it to return lots of cash to shareholders. Lowe’s expects to spend $9 billion on share repurchases during fiscal 2021. In addition, Lowe’s has raised its dividend by 13% per year over the last five years.
11. 3M Company (MMM)
3M is the eleventh company on our list of Dividend Kings. The company is a diversified industrial conglomerate. It manufactures a massive number of products (over 60,000) that get used every day in homes, hospitals, office buildings, and schools worldwide. Its business segments include safety and industrial, healthcare, transportation and electronics, and consumer products.
Last year was a difficult one for 3M, as it was hit hard by the economic downturn in the U.S. and international markets. However, the company has durable competitive advantages that have allowed it to navigate many rough periods successfully, and this is no different.
Things are looking up for 3M in 2021. In the 2021 first quarter, revenue increased 10% from the same quarter last year. As a result, adjusted earnings-per-share increased 27%. Organic growth was 8%, with each segment posting at least high single-digit growth.
3M expects adjusted EPS of $9.20 to $9.70 in 2021 and organic growth of 3% to 6% for the entire year. As a result, this should easily provide room for another dividend increase. Shares currently yield 2.9%.
12. Dover Corporation (DOV)
Dover Corporation is a diversified global industrial manufacturer with annual revenues of approximately $7 billion. The company comprises five reporting segments: Engineered Systems, Fueling Solutions, Pumps & Process Solutions, Imaging & Identification, and Refrigeration & Food Equipment.
More than half of the revenues come from the U.S., with the remainder coming from international markets.
Dover has now increased its dividend for 65 consecutive years. The stock has rewarded investors with annual returns above 13% in the past ten years. Shares have a current dividend yield of 1.3%.
13. American States Water (AWR)
American States Water is a water utility, arguably the most recession-resistant industry in the entire economy. Indeed, this is because water is a basic necessity of life, and this simple fact provides the company with steady demand from year to year. So even in the worst economic recession, everyone would still need water.
The certainty of demand and the company’s ability to pass along periodic rate increases has enabled a long history of dividend increases to shareholders. For example, it has increased dividends for 66 consecutive years.
The company’s current policy is to achieve a compound annual dividend growth rate of more than 7% over the long term.
14. Black Hills Corp. (BKH)
Black Hills is an integrated electric and gas utility that operates in 8 states with about 1.3 million utility customers. Its assets include generation, transmission, and distribution.
Black Hills is a regulated utility (87% of its operating income gets generated from regulated activities), which provides consistent profits and steady growth.
Because of the regulated industry, Black Hills management expects long-term earnings per share growth of 5% to 7% annually, along with at least 5% annual dividend growth.
The company is also in a strong financial position, with a BBB+ credit rating from Standard & Poor’s. Indeed, it has helped Black Hills reach 50 years of annual dividend increases, while the stock has an attractive 3.3% dividend yield.
15. Stanley Black & Decker (SWK)
Last, but not least on our list of Dividend Kings is Stanley Black & Decker. Stanley Works’ $3.5 billion acquisition of Black & Decker in 2009 formed the company we now know as Stanley Black & Decker. And, today it ranks as one of the world’s largest industrial products manufacturers, generating over $14 billion in annual sales.
Its main products include hand tools, power tools, and related accessories. It also produces electronic security solutions, healthcare solutions, engineered fastening systems, and more.
Despite the weak global economy, Stanley Black & Decker continues to generate solid profits and steady growth. Stanley Black & Decker believes each of its business segments will produce organic growth in 2021, with total company organic growth expected in a range of 4% to 8%.
Stanley Black & Decker has a fantastic track record of dividend payments. The company has paid dividends for 144 years and has increased its dividend each year for 53 consecutive years.
Dividend Kings FAQ
The Dividend Kings are a group of just over 30 stocks that have each increased their dividends for 50 consecutive years.
Dividend Kings pay shareholders dividends and can raise them each year, even when the U.S. economy is in recession. This steady dividend income provides shareholders with added returns when stock prices rise and a buffer against falling stock prices when markets are in decline.
Not necessarily. In addition to their dividend yields, investors should also assess each company’s individual growth prospects and stock valuations.
No, there are no ETFs that exclusively invest in Dividend Kings. However, some ETFs track the Dividend Aristocrats Index, such as the ProShares S&P 500 Dividend Aristocrats ETF (NOBL).
*Data Accurate as of Friday May 7, 2021.