Few companies have survived the events of the last 100-plus years, which have been marked by two world wars, numerous economic booms and busts, rapid technological advancements, increased global competition, evolving consumer tastes and much more.
Even fewer businesses have managed to pay uninterrupted dividends over this time, so those who have are particularly noteworthy.
Today, we’re focusing on precisely seven of those companies — a group of high-quality dividend stocks that have reliably paid investors since the 19th century.
Paying dividends for such a long period of time is a clear signal of financial strength and indicates that a company has numerous competitive advantages that have withstood the test of time.
All of these businesses have created massive value for shareholders. In fact, over the last 20 years, each of these blue-chip dividend stocks has delivered a total return greater than 550% — easily outpacing the S&P 500 index’s total return of about 360%.
The following companies are some of the best dividend stocks for safe income and consistent income growth.
Longtime Dividend Payers: Stanley Black & Decker, Inc. (SWK)
Paid Dividends Since: 1877
Dividend Yield: 2.1%
Stanley Black & Decker’s (SWK) roots can be traced back to 1843. Since then, the company has grown into a global provider of more than 500,000 products in categories such as power and hand tools, industrial gear, and security systems.
Stanley Black & Decker has been a big success because of its strong brands, commitment to product innovation and global distribution channels. Some of company’s most notable brands include DeWalt, Stanley and Black & Decker. The business introduces about 1,000 new products per year and leverages its strong brand equity and distributor relationships to grow into adjacent categories and markets.
The company has made annual dividend payments for 139 consecutive years while increasing its dividends every year since 1968. Its track record is unmatched by any industrial company.
Stanley Black & Decker’s dividend safety and growth prospects continue to look solid. The company maintains a healthy payout ratio just below 40%, which provides plenty of safety and room for growth.
Management has limited dividend growth to a mid-single digit rate in recent years to maintain the company’s target payout ratio of 30%-35% and continue reinvesting for earnings growth. However, as cash flow continues to grow, the dividend will almost certainly move higher as well.
SWK yields more than 2% and trades around 16 times forward earnings estimates.
Longtime Dividend Payers: UGI Corp (UGI)
Paid Dividends Since: 1885
Dividend Yield:
UGI Corp (UGI) distributes and markets energy products and services including natural gas, propane, butane and electricity. The company is the largest distributor of propane in the U.S. and serves a mix of residential and commercial customers, under the banners of UGI, AmeriGas and Alternative Fuel.
The business has been an extremely reliable dividend payer thanks to its diversification by geography, commodity and customer segment. Importantly, most of UGI’s products are used for basic needs such as heating and cooking, which has certainly helped the company’s durability.
UGI has paid dividends without interruption since 1885 — more than 150 years ago! UGI’s dividend has grown for more than 25 consecutive years as well, and management targets 4% annual dividend growth, ensuring that income growth outpaces the rate of inflation over time.
With a payout ratio target of 35% to 45% and consistent mid- to upper-single digit earnings growth, UGI’s dividend has plenty of cushion and room for continued growth.
UGI’s stock trades for 18 times forward earnings estimate and has a dividend yield of 2.3%.
Longtime Dividend Payers: Exxon Mobil Corporation (XOM)
Paid Dividends Since: 1882
Dividend Yield: 3.5%
Exxon Mobil (XOM) is the largest publicly traded integrated oil company in the world and makes money primarily by discovering, extracting and refining oil and gas.
The company has consistently increased its production base over the years and is arguably the highest-quality oil major. Exxon Mobil’s scale, financial strength and technological capabilities have enabled it to be an extremely low-cost producer and amass a huge pool of resources.
Energy is essential for the world to function, and XOM is well-positioned to continue meeting these needs for decades to come. The company’s durability has also been helped by its diversification across various energy resources and its balance between upstream and downstream operations, which are helping it better weather the current downturn in the price of oil than many of its peers.
Turing to the dividend, Exxon Mobil’s dividend payments have grown at an average annual rate of approximately 6.4% over the last 33 years. While the slump in oil prices is hurting near-term earnings growth, the company appears to have the balance sheet to continue paying dividends to keep its streak alive.
Shares of Exxon Mobil have a dividend yield of 3.5% and trade for 20 times forward earnings estimates. The company’s price-to-earnings multiple is high because the slump in oil prices has (temporarily) reduced XOM’s earnings. Investors are anticipating higher earnings in future years, which is why Exxon’s near-term earnings multiple is so high.
Longtime Dividend Payers: Colgate-Palmolive Company (CL)
Paid Dividends Since: 1895
Dividend Yield: 2.2%
Colgate-Palmolive’s (CL) business history goes back more than 200 years. Today, Colgate sells a number of consumer and hygiene products including toothpaste, mouthwash, soap, shower gel, and household cleaners. Some of its iconic brands include Colgate, Palmolive, Speed Stick and Irish Spring.
The company has proven to be extremely durable in part due to rising hygiene standards around the world, which have boosted demand for Colgate’s products. With a large budget to spend on marketing and a portfolio of essential products needed in every economic environment, Colgate’s future seems bright.
Colgate is a blue-chip stock that has rewarded shareholders with dividends every single year since 1895. Equally impressive, the business has increased its dividend payout during each of the past 53 years.
Going forward, Colgate’s dividend will likely continue growing at a mid-single-digit rate, approximately matching earnings growth to maintain the company’s 60% payout ratio.
Colgate’s shares offer a dividend yield of 2.2% and trade at a forward price-to-earnings multiple of 24.
Longtime Dividend Payers: Procter & Gamble Co (PG)
Paid Dividends Since: 1891
Dividend Yield: 3.2%
Procter & Gamble (PG) is one of the largest branded consumer products companies in the world with more than $76 billion in sales last year. The business maintains over 20 billion-dollar brands including Pampers, Tide and Head & Shoulders.
Many of the company’s products are needed by consumers regardless of economic conditions, helping the business persevere through many different environments. P&G has also been extremely durable because of the billions of dollars it spends on marketing its products to keep them in favorable standing with consumers.
Procter & Gamble has raised its dividend for 60 consecutive years and has a payout ratio near 60%, with offers plenty of room for management to keep growing the dividend at a moderate pace.
The company’s shares yield more than 3% and trade for a bit more than 20 times earnings.
Longtime Dividend Payers: PPG Industries, Inc. (PPG)
Paid Dividends Since: 1899
Dividend Yield: 1.3%
PPG Industries, Inc. (PPG) went into business in 1883 and is a leading supplier of paints, coatings, and specialty materials to customers in construction, automotive, industrial and aerospace markets.
The coatings sold by PPG are needed to make products last longer and look more appealing. Importantly, about 60% of PPG’s sales are special-purpose coatings, which target higher-value applications that command better profit margins.
Thanks to the company’s long-standing customer relationships, proven coatings technology and economies of scale, PPG has paid uninterrupted dividends since 1899 and increased its dividend for more than 40 consecutive years.
Dividend growth has remained in the mid-single digits in recent years despite the company’s relatively low payout ratio below 30%. With a coatings market in excess of $130 billion, we believe there are plenty of opportunities for PPG to continue growing its earnings and dividend for the long-term. And we should certainly hope it happens, as PPG only yields a bit more than 1%.
PPG’s stock trades for 16 forward earnings estimates.
Longtime Dividend Payers: Consolidated Edison, Inc. (ED)
Paid Dividends Since: 1885
Dividend Yield: 3.5%
Consolidated Edison (ED) is a regulated utility that provides electric service to roughly 3.7 million customers and gas service to about 1.2 million customers mostly located in New York City.
Many regulated utility companies operate like monopolies in their markets. Simply put, it would be too costly to have multiple competitors offering utility services in the same area. Customers have little to no choice over their utilities supplier or the price they have to pay.
Therefore, the rates Consolidated Edison can charge are regulated by state authorities and designed to provide the company with a fair return on its investments. This encourages continued investment to maintain reliable utility services while preventing Consolidated Edison from gouging customers on price.
As a result, Consolidated Edison generates very stable earnings and has increased its dividend for 42 consecutive years.
Although the company’s earnings payout ratio of 65% is nearing the high side of what we prefer to see, regulated utility companies’ earnings are typically extremely reliable. We expect dividend growth to continue at a low-single digit rate going forward, but that will merely augment a respectable yield around 3.5%.
Consolidated Edison’s shares trade for 18 times forward earnings estimates.
As of the time of this writing, Simply Safe Dividends was long CL, ED, PG and XOM.
