4 New Names Added to My List of Dividend Kings

by Dividend Growth Investor | January 23, 2013 1:00 am

Many income investors are aware of the Dividend Achievers[1], Dividend Champions and Dividend Aristocrats[2] stock lists of dividend growth stocks. These lists typically focus on companies which have raised dividends for at least 10 or 25 years in a row. There exists another list of dividend growth stocks however, every one of which has managed to boost distributions for at least fifty consecutive years.

This is particularly interesting, since this period covered several recessions, a few oil shocks and one embargo, a few wars, inflation and a lot of change in the global economy. These companies not only managed to prosper during that tumultuous period, by adapting and embracing change, but also did not forget to reward their loyal shareholders with a dividend raise. For at least 50 consecutive years that is.

In 2012, there were four additions to the list, and no deletions. The list of current dividend king companies includes:

Diebold (NYSE:DBD[3]) provides integrated self-service delivery and security systems and services primarily to the financial, commercial, government, and retail markets worldwide. The company has raised dividends for 59 years in a row. The ten year dividend growth is 5.60% per year. Yield: 3.50% (analysis[4])

American States Water (NYSE:AWR[5]), together with its subsidiaries, provides water, electric, and contracted services in the United States. The company has raised dividends for 58 years in a row. The ten year dividend growth is 3.80% per year. Yield: 2.80%

Dover (NYSE:DOV[6]) manufactures and sells a range of specialized products and components, and provides related services and consumables. The company has raised dividends for 57 years in a row. The ten year dividend growth is 9.40% per year. Yield: 2.10%

Northwest Natural Gas (NYSE:NWN[7]) stores and distributes natural gas primarily in Oregon, Washington, and California. The company has raised dividends for 57 years in a row. The ten year dividend growth is 3.60% per year. Yield: 4.20%

Emerson Electric (NYSE:EMR[8]), a diversified technology company, engages in designing and supplying products and technology, and providing engineering services and solutions to the industrial, commercial, and consumer markets worldwide. The company has raised dividends for 56 years in a row. The ten year dividend growth is 7.50% per year. Yield: 3% (analysis[9])

Genuine Parts (NYSE:GPC[10]) distributes automotive replacement parts, industrial replacement parts, office products, and electrical/electronic materials in the United States, Puerto Rico, Canada, and Mexico. The company has raised dividends for 56 years in a row. The ten year dividend growth is 5.30% per year. Yield: 3%(analysis[11])

Parker Hannifin (NYSE:PH[12]) manufactures fluid power systems, electromechanical controls, and related components worldwide. The company has raised dividends for 56 years in a row. The ten year dividend growth is 12.90% per year. Yield: 1.80%

Procter & Gamble (NYSE:PG[13]), together with its subsidiaries, engages in the manufacture and sale of a range of branded consumer packaged goods. The company has raised dividends for 56 years in a row. The ten year dividend growth is 10.80% per year. Yield: 3.20% (analysis[14])

3M (NYSE:MMM[15]) operates as a diversified technology company worldwide. The company has raised dividends for 54 years in a row. The ten year dividend growth is 6.60% per year. Yield: 2.40%  (analysis[16])

Vectren (NYSE:VVC[17]), through its subsidiaries, provides energy delivery services to residential, commercial, and industrial and other contract customers in Indiana and west central Ohio. The company has raised dividends for 53 years in a row. The ten year dividend growth is 2.80% per year. Yield: 4.60%

Cincinnati Financial (NASDAQ:CINF[18]) engages in the property casualty insurance business in the United States. The company has raised dividends for 52 years in a row. The ten year dividend growth is 7.30% per year. Yield: 3.90%

The four new additions in 2012 include Coca-Cola, Johnson & Johnson, Lancaster Colony and Lowe’s.

Coca-Cola (NYSE:KO[19]), a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. The company has raised dividends for 50 years in a row. The ten year dividend growth is 9.80% per year. Yield: 2.70% (analysis[20])

Johnson & Johnson (NYSE:JNJ[21]), together with its subsidiaries, engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company has raised dividends for 50 years in a row. The ten year dividend growth is 11.70% per year. Yield: 3.30% (analysis[22])

Lancaster Colony (NASDAQ:LANC[23]) engages in the manufacture and marketing of consumer products focusing primarily on specialty foods for the retail and food service markets in the United States. The company has raised dividends for 50 years in a row. The ten year dividend growth is 6.70% per year. Yield: 2.10%

Lowe’s (NYSE:LOW[24]), together with its subsidiaries, operates as a home improvement retailer. The company has raised dividends for 50 years in a row. The ten year dividend growth is 31.10% per year. Yield: 1.70% (analysis[25])

The companies which I expect to join the ranks of the Dividend Kings in 2013 include Colgate-Palmolive (NYSE:CL[26]), Nordson (NASDAQ:NDSN[27]) and Illinois Tool Works (NYSE:ITW[28]).

The list of dividend kings has been expanding since 2007, despite the financial crisis. Only two companies have been dropped out of the list since then. The companies include Integrys Energy (NYSE:TEG[29]), which has not raised dividends since 2009 and Masco (NYSE:MAS[30]), which cut them in 2009. Since 2007, the list has outperformed S&P 500 in three out of five years. It is a small sample of years of course, so future results might vary.

Portfolio/Year
2008
2009
2010
2011
2012
Dividend Kings TR
-18.48%
17.49%
23.31%
3.51%
14.09%
S&P 500 TR
-36.80%
26.36%
15.05%
1.90%
15.99%
Difference
18.32%
-8.87%
8.26%
1.61%
-1.89%

There are 105 dividend champions and 183 dividend contenders. As a result, the achievements of these fifteen companies are no small task. These companies are not buy recommendations. Instead, every dividend investor worth their salt should study each one of these companies in order to identify the characteristics that lead to these long histories of dividend increases. The lessons learned should hopefully pay huge dividends for decades to come.

Full Disclosure: Long EMR, PG, MMM, KO, JNJ, LOW, CL

Endnotes:
  1. Dividend Achievers: http://www.dividendgrowthinvestor.com/2011/01/dividend-achievers-offer-income-growth.html
  2. Dividend Aristocrats: http://www.dividendgrowthinvestor.com/2011/12/dividend-aristocrats-list-for-2012.html
  3. DBD: http://studio-5.financialcontent.com/investplace/quote?Symbol=DBD
  4. analysis: http://www.dividendgrowthinvestor.com/2011/10/diebold-dbd-dividend-stock-analysis.html
  5. AWR: http://studio-5.financialcontent.com/investplace/quote?Symbol=AWR
  6. DOV: http://studio-5.financialcontent.com/investplace/quote?Symbol=DOV
  7. NWN: http://studio-5.financialcontent.com/investplace/quote?Symbol=NWN
  8. EMR: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMR
  9. analysis: http://www.dividendgrowthinvestor.com/2012/05/emerson-electric-emr-dividend-stock.html
  10. GPC: http://studio-5.financialcontent.com/investplace/quote?Symbol=GPC
  11. analysis: http://www.dividendgrowthinvestor.com/2012/07/genuine-parts-company-gpc-dividend.html
  12. PH: http://studio-5.financialcontent.com/investplace/quote?Symbol=PH
  13. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  14. analysis: http://www.dividendgrowthinvestor.com/2012/02/procter-gamble-pg-dividend-stock-to.html
  15. MMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=MMM
  16. analysis: http://www.dividendgrowthinvestor.com/2012/07/3m-company-mmm-dividend-stock-analysis.html
  17. VVC: http://studio-5.financialcontent.com/investplace/quote?Symbol=VVC
  18. CINF: http://studio-5.financialcontent.com/investplace/quote?Symbol=CINF
  19. KO: http://studio-5.financialcontent.com/investplace/quote?Symbol=KO
  20. analysis: http://www.dividendgrowthinvestor.com/2012/03/coca-cola-company-ko-dividend-stock.html
  21. JNJ: http://studio-5.financialcontent.com/investplace/quote?Symbol=JNJ
  22. analysis: http://www.dividendgrowthinvestor.com/2012/02/johnson-johnson-jnj-reliable-dividend.html
  23. LANC: http://studio-5.financialcontent.com/investplace/quote?Symbol=LANC
  24. LOW: http://studio-5.financialcontent.com/investplace/quote?Symbol=LOW
  25. analysis: http://www.dividendgrowthinvestor.com/2012/11/lowes-low-dividend-stock-analysis.html
  26. CL: http://studio-5.financialcontent.com/investplace/quote?Symbol=CL
  27. NDSN: http://studio-5.financialcontent.com/investplace/quote?Symbol=NDSN
  28. ITW: http://studio-5.financialcontent.com/investplace/quote?Symbol=ITW
  29. TEG: http://studio-5.financialcontent.com/investplace/quote?Symbol=TEG
  30. MAS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MAS

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