It is no secret that investors love receiving dividends. With up to half (or more) of all total returns through time coming from dividends, companies that are raising their dividends year after year tend to end up being the most sought after by investors. Among dividend-paying companies exists a classification of the Dividend Aristocrats. These dividend payers are the companies inside the S&P 500 Index with a history of having raised their dividends for 25 years or more.
24/7 Wall St. has gone through the stocks that fall into the Dividend Aristocrats index and featured the Dow Jones Industrial Average companies. These corporate giants have stated or admitted on their own that they are in the 25-year dividend hike game.
What is different now after seven and a half years of a bull market is that many companies are starting to run into issues. It seems rather obvious that some companies are likely to have issues when it comes to being able to keep growing their dividends at the same rate they have been used to. We have made an effort to screen out many of the dividend aristocrats that might run into issues ahead on being able to keep hiking those dividends.
Investors should know that not all the companies raising dividends are created equally. Some companies cannot maintain their pace of hikes indefinitely. Many other companies just haven’t been paying dividends for anywhere long enough to count. It seems that only a few energy companies can keep raising dividends.
Many investors might assume that the largest and most continually growing dividends would all be Dow Jones Industrial Average stocks. Guess again. Not even one-third of the current 30 Dow stocks have a history of 25 consecutive years of dividend hikes. 24/7 Wall St. has featured the seven Dow stocks first for the club of 25 straight dividend hikes.
Additional commentary also has been included that was provided either in the official corporate statements of their last dividend hike or from their investor relations sites. Featured in a bullet format is the respective yield on each, followed by the number of years of consecutive dividend hikes, and with color and recent share performance on a total return basis added on each.
For a reference on relative performance, the Dow Jones Industrial Average, via the Diamonds ETF for reflecting dividends, was last seen up 6.6 so far in 2016 and has returned 16.7% versus this time a year ago.
> Yield: 2.5%
> Years: Over 50
3M Co. (NYSE: MMM), as of 2016, has paid dividends to its shareholders for more than 99 straight years. 3M has also hiked its annual dividend for 57 consecutive years. 3M shares were last trading at $177 — within about 3% of all-time highs. 3M’s consensus analyst price target is now $181.73, and its 52-week trading range is $134.64 to $182.27. The conglomerate and industrial player now has a total market cap of $107 billion.
3M shares have gained 19% year to date, and the stock has returned about 31% over the past year.
> Yield: 3.3%
> Years: Over 50
Coca-Cola Co. (NYSE: KO) has paid dividends for more years than most investors can count. Its last dividend hike marked the 54th consecutive annual dividend increase. Coca-Cola was recently trading at $42.50. The stock has a consensus price target of $47.44 and a 52-week range of $39.36 to $47.13. The beverage giant’s market cap is $183 billion.
Coca-Cola shares have risen just 1.5% so far in 2016, which means all the gains have come from dividends. The performance versus a year ago is up 11%.