Investing

9 Great Companies That Can Raise Their Dividends for the Next Decade

Kimberly-Clark

Kimberly-Clark Co. NYSE: KMB) is one of the largest consumer products giants in the world, well behind Procter & Gamble, and also has been restructuring to right size its portfolio to focus on growth and higher margin consumer products. Kimberly-Clark also was refreshed on our 10 stocks to own for the next decade.

Its dividend payout ratio is up above 60%, but earnings growth is expected to continue enough to justify dividend hikes. The company has a history of dividend hikes too that is more than just enviable — 2015 marked the 43rd consecutive year that Kimberly-Clark raised its dividend.

Kimberly-Clark shares recently were trading around $117.30. The consensus price target is $116.55, the 52-week range is $101.76 to $119.01, and the total market cap is $42.7 billion.

3M

3M Co. (NYSE: MMM) is another DJIA stock, one with a long history of dividend payments and hikes. It has even noted that the conglomerate has paid dividends for almost 100 straight years now and has increased its annual dividend for 57 consecutive years. Its 2.8% yield is generated with a payout ratio that is about 50% to 55% of current operating earnings, and that payout ratio rose in recent years. Earnings growth is expected to pick back up in 2016, and if 3M is not too aggressive in its payout growth, it should be able to post dividend growth of at least 5% per year ahead.

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3M shares recently were trading at $148.70. The stock has a consensus analyst price target of $156.50 and a 52-week trading range of $134.00 to $170.50. The company has a total market cap of $92.5 billion.

Starbucks

Starbucks Corp. (NASDAQ: SBUX) is still considered a growth company by many investors, and that price-to-earnings (P/E) ratio of 38 keeps a lid on how high its dividend can be. The coffee retail giant now has a dividend yield of only about 1%, but its 40% payout ratio has room to grow on its own, and it should have room to grow as double-digit earnings growth is expected to continue for the coming years.

Starbucks is only about five years into paying a dividend at all, and that payout has roughly tripled since it was first declared. Investors should expect modest dividend hikes ahead, but there is plenty of room for that payout to grow over the next decade.

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Shares of Starbucks were last seen right at $60.00, with a consensus price target of $64.09 and a 52-week range of $36.71 to $60.89. Its total market cap is $89.6 billion.

Walt Disney

Walt Disney Co. (NYSE: DIS) has raised dividends aggressively, but its share price appreciation has masked the growth because it has made the yield stay low. Disney has barely a 1% yield due to that share gain, and it pays out less than 30% of operating earnings as a dividend.

Disney was also one of the stocks to own for the next decade, and Star Wars, higher theme park prices, Marvel and other efforts are likely to more than offset concerns about ESPN and cord-cutters. Earnings growth is in the double-digits, with sales growth of more than 5% expected to remain ahead.

The only issue that might cap that dividend growth is that Disney is aggressively buying back stock now. Disney’s dividend should double from current levels, and the question is whether that takes three years or more than five years to come about.

Disney’s stock price was last seen back up around $109.00. The consensus price target is $118.50, shares have traded in a range of $84.15 to $122.08 in the past 52 weeks, and the total market cap of $182.7 billion.

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