The Dividend Kings are the 58 companies that have raised their dividends for at least 50 years, reflecting their dependability and reliability. They are two “must-have” options for investors who rely on passive income to boost overall returns. Unlike the Dividend Aristocrats, the Dividend Kings do not have to be members of the S&P 500. One of the top reasons to be a long-term Dividend Kings stockholder is that many of these companies have raised their dividends through every market crash and meltdown since the Black Monday crash of 1987, when the Dow Jones Industrial Average fell a stunning 22% in one day.
Although no official ranking exists for the safest Dividend Kings, analysts most often emphasize criteria such as low payout ratios, strong free cash flow that covers the dividend, wide economic moats with little or no threat to products or services, and conservative balance sheets with low debt. A handful of names consistently rank toward the more defensive, lower-risk end of the current 57-company list. We found five that screen especially well on these measures, and we explain why they stand out.
Why Do We Cover the Dividend Kings?
Companies that have raised dividends for shareholders for 50 years or more are the kinds of investments passive income investors need. Dependability is crucial for individuals seeking to grow their annual income through dividend stock investments.
S&P Global
Founded in 1860, S&P Global (NYSE: SPGI | SPGI Price Prediction) offers critical insights and data for markets worldwide, providing credit ratings and analytics, maintaining indices like the Dow Jones, and paying a 0.89% dividend. This company has a wide economic moat and a notably conservative target payout ratio of just 20–30% of earnings, which analysts highlight as evidence of strong balance-sheet health in a business model that generates abundant free cash flow.
Its operations consist of five businesses:
- S&P Global Market Intelligence
- S&P Global Ratings
- S&P Global Commodity Insights
- S&P Global Mobility
- S&P Dow Jones Indices
Market Intelligence is a global provider of multi-asset-class data and analytics integrated with purpose-built workflow solutions.
Ratings is an independent provider of credit ratings, research, and analytics, offering investors and other market participants information, ratings, and benchmarks.
Commodity Insights is an independent provider of information and benchmark prices for the commodity and energy markets.
Mobility provides solutions for the entire automotive value chain, including vehicle manufacturers and retailers.
Indices is a global index provider that maintains a variety of valuation and index benchmarks for investment advisors, wealth managers, and institutional investors.
National Fuel Gas
This top company distributes and transports natural gas to hundreds of thousands of customers in Western New York and Northwestern Pennsylvania. National Fuel Gas (NYSE: NFG) is a diversified energy company that pays a 2.57% dividend. Utilities typically generate stable, regulated cash flows, and this one currently trades at one of the lowest forward earnings multiples among Dividend Kings, suggesting the market is not pricing in any dividend risk.
It operates through four segments:
- Exploration and Production
- Pipeline and Storage
- Gathering
- Utility
The Exploration and Production segment explores, develops, and produces natural gas and oil. The Pipeline and Storage segment provides interstate natural gas transportation services through an integrated gas pipeline system in Pennsylvania and New York, and it owns and operates underground natural gas storage fields. This segment also transports natural gas for the National Fuel Gas Distribution Corporation and other utilities, industrial companies, and power producers in New York State.
The Gathering segment builds, owns, and operates natural gas processing and pipeline gathering facilities in the Appalachian region, providing gathering services to Seneca. The Utility segment sells natural gas or provides natural gas utility services to various customers in:
- Buffalo
- Niagara Falls
- Jamestown
- Erie and Sharon in Pennsylvania
Bank of America has a Buy rating with a $107 target price.
ABM Industries
This is likely the most off-the-radar stock in the Dividend Kings lineup. ABM Industries (NYSE: ABM) is a provider of integrated facility, engineering, and infrastructure solutions. The company has a very low 31% payout ratio, a 2.36% yield, and a solid safety and growth grade, giving a substantial cushion if earnings decline in a downturn.
The company’s segments include:
- Business & Industry (B&I)
- Manufacturing & Distribution (M&D)
- Education
- Aviation
- Technical Solutions
The B&I segment encompasses janitorial, facilities engineering, and parking services for commercial real estate properties, sports and entertainment venues, and other facilities. Meanwhile, the M&D segment provides integrated facility services, engineering, janitorial, and other specialized services.
The Education segment delivers janitorial, custodial, landscaping and grounds, facilities engineering, and parking services. The Aviation segment supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance, and transportation. The Technical Solutions segment specializes in facility infrastructure and mechanical and electrical services.
Farmers & Merchants Bank
This name likely doesn’t ring a bell, but with a solid 1.48% dividend, it’s another safe choice. Farmers & Merchants Bank (OTC: FMCB) is the parent company of Farmers & Merchants Bank of Central California. This small regional bank, which is not as widely followed, currently trades at the lowest trailing earnings multiple among all the Dividend Kings.
The company offers a range of deposit products, including checking, savings, money market accounts, time certificates of deposit, individual retirement accounts, and online banking services for both business and personal accounts. It offers a range of lending products, including commercial, commercial real estate, construction, and other products. Commercial products include term loans, leases, lines of credit, other working capital financing, and letters of credit.
Its financing products for individuals include automobile financing, lines of credit, residential real estate, and others. It also offers specialized services tailored to commercial accounts. These services include a credit card program for merchants, lockbox and other collection services, account reconciliation, investment sweep, online account access, and electronic funds.
Pentair
This Dividend King is based in London and pays a 1.63% dividend. Pentair (NYSE: PNR) delivers a comprehensive range of smart, sustainable water solutions for homes, businesses, and industries worldwide. Providing these smart and sustainable water solutions globally is more defensive than typical industrial cyclicals.
The company’s segments include the Flow segment, which designs, manufactures, and sells a variety of fluid treatment and pump products and systems, including:
- Pressure vessels
- Gas recovery solutions
- Membrane bioreactors
- Wastewater reuse systems
- Advanced membrane filtration and separation systems
- Water disposal pumps
- Water supply pumps
- Fluid transfer pumps
Its Water Solutions segment designs, manufactures, and sells commercial and residential water treatment products and systems, including pressure tanks, control valves, and activated carbon products.
The Pool segment designs, manufactures, and sells a complete line of energy-efficient residential and commercial pool equipment and accessories, including pumps, filters, heaters, lights, automatic controls, automatic cleaners, and maintenance equipment.
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