Nine DJIA Stocks That Always Raise Their Dividends — and Will Keep Doing So

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Investors love dividends. Becoming one of the 30 members of the Dow Jones Industrial Average does not come with assurance that a company will pay a dividend, nor does it come with assurance that a dividend will be raised yearly. It turns out that nearly a third, nine of the 30 components, do raise their common stock dividend payouts year after year.

24/7 Wall St. looked back over the S&P Dividend Aristocrats to see which DJIA components were on the list. The S&P 500 Dividend Aristocrats is an index composed of S&P 500 stocks that have increased dividends every year for the past 25 consecutive years.

We have included a dividend history, showing how many years each of these DJIA stocks have paid dividends, and how many consecutive years each has raised dividends. Besides just showing the dividend yields for comparison, we also went as far as showing what the payout ratio against the current year’s Thomson Reuters consensus estimate of normalized earnings per share, so that investors can see that dividend hikes can continue just as they have.

AT&T Inc. (NYSE: T) is a bit more tricky in calling “always” because AT&T is an amalgamation of AT&T, BellSouth, Ameritech and Pac-Bell. What investors need to know is that despite buying up more and more spectrum, and despite failing to win in a T-Mobile buyout, AT&T does keep raising its dividend each year. It also has the highest payout of all DJIA stocks, with a current yield of just over 5%. AT&T pays out about 72% of its expected income in dividends.

Chevron Corp. (NYSE: CVX) is also in the so-called Dividend Aristocrats, but investors have to keep in mind that the Chevron of today is really made up of Chevron and Texaco. Chevron has now increased its annual dividend payment for 26 consecutive years, making it a fairly new Dividend Aristocrat. Chevron yields about 3.15%, and we cannot help but notice that its dividend is now more than 50% higher than when oil was hitting the crazy levels in 2008. Chevron pays out about one-third of its expected income in dividends.

Coca-Cola Co. (NYSE: KO) keeps giving dividend chasers “a Coke and a smile.” The beverage giant has paid a quarterly dividend since 1920, and it has increased dividends in each of the past 50 years. Coca-Cola even went as far as a stock split recently. That being said, its dividend yield of 2.80% also trumps that of PepsiCo (NYSE: PEP). Coca-Cola pays out about 53% of expected earnings.

Exxon Mobil Corp. (NYSE: XOM) claims that future dividends are at the discretion of its board of directors, but it also said, “ExxonMobil endeavors to pay a reliable, growing dividend.” ExxonMobil’s dividend payments have grown at an average annual rate of 6% over the past 30 years. Exxon’s dividend yield is almost 2.7%, and it pays out about 32% of its expected income to its common stockholders.

Johnson & Johnson (NYSE: JNJ) announced its latest dividend hike in April, which marked the 51st consecutive annual dividend hike. Shares are challenging all-time highs, and the dividend yield is just over 2.8%. So much for all the worries about quality control issues wrecking the stock. Johnson & Johnson also has plenty of room to pad its dividend hikes ahead, because its payout ratio is about 48% of expected income to its shareholders.

3M Co. (NYSE: MMM) announced its latest dividend hike in February of 2013, and that marked the company’s 55th consecutive year of dividend increases, as well as its 96th year of consecutive dividend payments. What is so interesting is that its dividend has remained somewhat low in yield (about 2.2% currently) because its stock has moved to all-time highs recently. 3M pays out about 38% of its expected income in the form of dividends.

McDonald’s Corp. (NYSE: MCD) may have some fresh valuation concerns on our part, but don’t bother telling that to the dividend chasers. Mickey-D’s leads the fast-food giants with a dividend yield of 3.15%. McDonald’s has raised its dividend every year since paying its first dividend in 1976, making 2013 the expected 37th year of hikes. Its $3.08 annualized payout comes to roughly 55% of expected earnings to be paid out to its common stockholders.

Procter & Gamble Co. (NYSE: PG) is already under activist investor fire, to the point that it lost its chief executive officer. The consumer products giant last hiked its dividend this April, by 7%. The company signaled that this was the 123rd consecutive year that it has paid a dividend, and it was the 57th consecutive year that P&G increased the dividend. The company’s dividend yield is exactly 3% at the current level, and P&G pays out almost 60% of its expected earnings per share to its investors.

Wal-Mart Stores Inc. (NYSE: WMT) outyields most of its rivals, and it has plenty of room to keep hiking its dividend, if it decides to stop spending so much to repurchase its common stock. The company hiked its payout by 18% back in February. This will soon be 40 years of consecutive dividend hikes, as it has increased its dividend every year since its first declared dividend of $0.05 per share in March 1974. The largest retailer and top private sector employer (by worker count) yields just over 2.4% and pays just over 35% of its expected earnings in the form of dividends.