Investing
7 Companies That Have Raised Their Dividends for at Least 50 Straight Years
April 13, 2018 12:10 pm
Last Updated: January 12, 2020 1:27 am
Investors love dividends. They particularly love it when they buy a company with a dividend that keeps rising and rising each year. The Dividend Aristocrats are those dividend payers that have raised their dividends for 25 straight years. But there are some with an even stronger track record — companies that have raised their dividends for 50 straight years.
Not all dividends are created equal. Companies have to have enough earnings power today and must have perceived earnings visibility for years into the future. To prove the point, a company just assumes that it will be handily punished in the market if it has to lower its dividend.
24/7 Wall St. has screened out companies from the S&P 500 stocks that fall into the Dividend Aristocrats index and other companies, and we focused on those that should be known by every investor and consumer. We also have screened out companies that we felt may run into issues in the years ahead continuing to hike those dividends.
Most investors might assume all of these would be Dow Jones industrial average stocks. Yet, only about one-third of the current 30 Dow stocks have a 25 consecutive year history of dividend hikes.
The impact that dividends have on investors’ total return is generally stated as being close to half of all returns through time for investors who buy and hold for the long haul. Total return is the combined increase in a stock’s value plus its dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%: 10% for the increase in stock price and 3% for the dividends paid. Dividends, and dividend hikes in particular, are one of the best ways to help improve the chances for overall investing success.
The long and short of the matter is that to have a 50-plus year track record of dividend hikes means that these companies have been dividend hikers longer than most of us have been investing. Some have hiked dividends all the way back to when your grandparents started investing.
Here we feature seven companies that have 50 straight years or more of raising their dividends. Some of these big dividend hikes also helped to smooth out some of the underperformance that may have been seen for long-term total return investors in the past year or in recent years. There are also eight more companies listed as runners-up that have more than 40 years of dividend hikes.
1. 3M
> Industry: Conglomerate
> Yield: 2.5%
> Years: 60
3M Co. (NYSE: MMM) is right up front about its dividends, noting that it has paid its shareholders for more than 100 consecutive years, and it has now increased its annual dividend for 60 consecutive years. The conglomerate and industrial player has a total market cap of $103 billion. 3M is worth about $130 billion, and the conglomerate has many products used by households and businesses every day.
2. California Water
> Industry: Water utility
> Yield: 2.0%
> Years: 51
California Water Service Group (NYSE: CWT) declared its 292nd consecutive quarterly dividend with a hike to $0.75 from $0.72 per share in January of 2018. This marked the company’s 51st consecutive annual dividend increase. California Water Service Group may have California and west coast regulatory risks in its locations, but water by and large is considered recession-proof. Its group of utility companies provides regulated and nonregulated water service to nearly 2 million people throughout California, Washington, New Mexico and Hawaii.
3. Coca-Cola
> Industry: Beverages
> Yield: 3.5%
> Years: 56
Coca-Cola Co. (NYSE: KO) has paid dividends for more years than most investors can count, and the beverage giant’s dividend hike to $0.39 from $0.37 per quarter in February 2018 marked the 56th consecutive annual dividend increase. At $44.25 a share, Coca-Cola’s stock has unfortunately been stuck in a long-term trading range with limited gains. With a 52-week range of $42.19 to $48.62, its shares have been mostly in a range of $40 to $47 for the past five years. Its consensus analyst price target is up at about $50.00, and the highest sell-side analyst price target is up at $56.
To show just how much dividends add value over time, even considering that Coca-Cola shares have underperformed the broader bull market handily, Warren Buffett would have an adjusted cost basis of less than zero if you back out all those dividends after stock splits.
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