It is no secret at all that investors love dividends. Companies raising dividends continuously are even more sought after than those just paying the same old dividend year in and year out. It is frequently mentioned that roughly half of all total returns through time come from dividends. As the third quarter has given way to the fourth quarter of 2016, the reality is that this bull market is seven and a half years old. Valuations are relatively high in the broad market, and there is growing evidence that some companies may not be able to keep raising dividends endlessly.
In an effort to make sure investors do not go after the wrong dividend-paying companies, 24/7 Wall St. has reviewed many dividends. We have found seven Dow Jones Industrial Average companies and identified 14 S&P 500 companies that have raised dividends for 25 years or more that can likely keep raising their dividends. After looking at the big picture, there are actually four Dow member companies that have increased their dividends for 50 consecutive years.
Being a Dividend Aristocrat means that a company has hiked dividends for 25 years straight. Perhaps companies that have hiked their dividend for 50 years or more should be called the Dividend Deities. Here are four Dow stocks that have raised their dividends for 50 years or more, and that also appear to be able to keep raising their dividends in the years ahead.
3M Co. (NYSE: MMM) has a lot more going for it than the Post-It note, and it has raised dividends for roughly two decades longer than it has been selling the Post-It note. The conglomerate has a dividend yield of about 2.5%, but its 99-straight-year dividend history has seen an increase to annual dividend for 57 consecutive years.
Despite years of hiking, 3M only recently has become more aggressive on dividends. To prove the point, 19 of the 30 Dow stocks outyield the conglomerate. Shares of 3M last closed at $175.33, with a consensus analyst price target of $181.73 and a 52-week trading range of $134.64 to $182.27. The company has a total market cap of $106 billion.
For some time Coca-Cola Co. (NYSE: KO) has been diversifying away from sugary drinks, and that goes far beyond diet sodas with artificial sweeteners. It has large water operations, as well as sports and specialty beverages, now. The beverage giant yields 3.3% and it has paid a dividend for longer than most of us have lived.
Its consecutive time frame is 54 years with dividend hikes — with plenty of room for hikes ahead. Coca-Cola also pays the eighth highest yields of the 30 Dow stocks. Its shares recently closed at $42.31. The consensus price target is $47.17, and the 52-week range is $40.43 to $47.13. Coca-Cola’s market cap is $181 billion.
Johnson & Johnson (NYSE: JNJ) is sort of like Old Faithful in that it just keeps spewing money into the air for investors each year. Perhaps there is something to be said for sticking with a mantra of being in health care products and pharmaceuticals and in consumer products at the same time. The yield is now 2.7%.
The company has a 54 consecutive years of hikes, but its position among the 30 Dow dividends is just number 17. Johnson & Johnson shares last closed at $118.00, within a 52-week range of $92.58 to $126.07. The consensus price target is $126.61. The market cap is $322 billion.
Procter & Gamble (NYSE: PG) may have been restructuring its consumer products portfolio for a while (just finalized a Coty deal), but it has so far never buckled under the competitive and ever-changing landscape of retail. It has paid a dividend for 126 consecutive years now, but 2016 marked the 60th consecutive year that it has increased that dividend.
The current yield is 3.0%m which ranks as the 12th highest dividend of the 30 Dow stocks. Shares of Procter & Gamble recently closed at $89.37, in a 52-week range of $72.50 to $90.22. The market cap is $237 billion.
While other dividend aristocrats might or might not be able to pay ever higher dividends year in and year out, there are many other companies close behind these four Dow stocks. Some of these other soon-to-be Dividend Deities are not Dow stocks but the likes of Target, PepsiCo, Sysco Foods, Kimberly-Clark, Consolidated Edison, Becton Dickinson, and ADP — as well as Dow component McDonald’s. They have all paid out higher and higher dividends for 40 consecutive years or more.