- Dividend Kings are the cream of the crop when it comes to reliable income investments.
- American States Water (NYSE:AWR): The longest-running of the Dividend Kings.
- Dover Corp (NYSE:DOV): Diversified industrial giant has been manufacturing dividend increases for 66 straight years.
- Coca-Cola (NYSE:KO): Coca-Cola is a sweet and refreshing pick for dividend investors.
- Emerson Electric (NYSE:EMR): Emerson Electric has shrewdly transformed its business to adapt to new industrial innovations.
- 3M (NYSE:MMM): The industrial powerhouse is far more than Post-It notes.
- Northwest Natural (NYSE:NWN): Natural gas utility benefits from the stability of its industry to deliver healthy income.
- Colgate-Palmolive (NYSE:CL): Colgate is a recession-proof consumer staples stalwart.
Dividend Kings keep getting more attractive as the stock market seems shakier with every passing day. Inflation, war, interest rate hikes, and slumping earnings. There’s plenty to be worried about.
As any study of long-term investing will show, it’s time in the market that makes the difference. Investors have to keep capital in stocks to get the benefits of long-term compounding. With that in mind, investors have to find stocks and construct a portfolio that can withstand recessions and bear markets.
There’s no better place to look for such resilient companies than the Dividend Kings. These are the companies that have increased their dividends for at least 50 years in a row.
As you might imagine, there aren’t too many firms that have managed to make it to Dividend King status. In fact, there are just 44 as of this year. For this article, we’ll take it one step further, going for companies with 60+ years of consecutive dividend hikes.
These seven Dividend Kings have proven that they can provide a growing income stream regardless of economic conditions.
| AWR | American States Water | $79.69 |
| DOV | Dover Corp | $134.55 |
| KO | Coca-Cola | $64.68 |
| EMR | Emerson Electric | $88.40 |
| MMM | 3M | $149.51 |
| NWN | Northwest Natural | $54.25 |
| CL | Colgate-Palmolive | $78.86 |
American States Water (AWR)
Years of Consecutive Dividend Hikes: 67
At 67 years in a row, American States Water currently has the longest-running consecutive dividend increase streak of the S&P 500 companies.
It’s not too hard to see why. Water utilities are among the most stable businesses out there. Regardless of what is going on with the economy, people need fresh clean water.
American States Water has been able to leverage that consistent demand into a solid growth rate, with earnings per share increasing around 7%/year annually over the past decade.
In turn, American States Water has increased its dividend by a similar amount annually as well. AWR stock offers a dividend yield of 1.9%, which is certainly not the highest on this list.
However, its unmatched record in terms of how long it has delivered annual dividend hikes and the inherent stability of its underlying business make American States Water a solid defensive Dividend King.
Dover Corp (DOV)
Years of Consecutive Dividend Hikes: 66
Dover is a diversified industrial company. It operates in a wide variety of segments including imaging and ID services, pumps, climate and sustainability technologies and engineered products.
Dover is not a particularly glamorous business, but it keeps steadily ticking along. Earnings have grown 5% per year annualized over the past decade, which has given it sufficient margin to keep increasing its dividend.
DOV stock is also a timely pick right now. Shares are down nearly 25% year to date. This has led DOV stock to sell at just 15 times forward earnings, which is near its cheapest valuation of the past decade.
As with many Dividend Kings, Dover is not the sort of company that will make anyone a fortune overnight, but this steady industrial company serves as a top-notch growth and income machine over the long term.
Coca-Cola (KO)
Years of Consecutive Dividend Hikes: 60
Coca-Cola is one of Warren Buffett’s favorite stocks, and it’s not hard to see why. The company sells almost $40 billion in soda and other beverages each and every year.
Regardless of what happens with the economy or political conditions, Coca-Cola continues to sell the same amount of refreshments.
Soda isn’t much of a growth industry anymore. However, Coca-Cola has done well in diversifying into other beverages such as water, juices, and sparkling water.
Meanwhile, given the company’s unparalleled scale, it has maintained strong cost advantages over its rivals, leading to enviable profit margins.
Coca-Cola isn’t going to deliver strong short-term capital gains, but its 2.8% dividend yield is rock solid, and the company has raised that payout every year in a row dating back to the 1960s.
Emerson Electric (EMR)
Years of Consecutive Dividend Hikes: 65
A company with 65 consecutive years of dividend hikes might seem old-fashioned. However, companies don’t become Dividend Kings without being able to evolve.
Emerson, for example, began as an industrial firm focused on making goods such as electric fans, sewing machines, and power tools. Over the decades, Emerson has transformed itself. Nowadays, the company is increasingly becoming a software company focusing on the automation of factories and industrial processes.
This is crucial technology right now. Supply chain issues and runaway inflation have made it more vital than ever to get the most out of a company’s existing manufacturing processes.
Emerson’s focus on efficiency and reducing industrial waste for its customers also stands out in the current marketplace which favors environmental, social and governance (ESG) friendly investments.
Sometimes an old dog can learn new tricks, and Emerson’s transformation into a forward-looking automation company has been one such impressive example.
3M Corp (MMM)
Years of Consecutive Dividend Hikes: 64
3M is an American industrial giant. It is most well-known for Post-It notes. However, the company makes a vast array of products spanning safety equipment, adhesives, dental supplies, industrial filters and much more.
In short, 3M is a diversified conglomerate that in effect is a bet on American industry itself.
MMM stock is also shockingly cheap, as it currently sells for just 13 times forward earnings. Traders are worried about the impact of a recession on the company, along with some pending lawsuits around product liability.
Once these concerns pass, however, 3M shares should return to a more generous valuation ratio, offering significant capital gains. In the meantime, shares offer a compelling 4.1% dividend yield.
Northwest Natural (NWN)
Years of Consecutive Dividend Hikes: 66
Northwest Natural is a utility that operates primarily in Oregon and Washington.
Utilities tend to be a very stable business, and Northwest Natural has been no exception to that rule. Generally, gas utilities earn a regulated return rate and receive upward adjustments for inflation, giving investors a reliable stream of cash flows over the decades.
Northwest Natural is not a compelling growth story by any means; it has grown revenues by about 2% per year compounded over the past decade.
However, for investors that like a stable income story with a small annual increase, NWN stock’s 3.5% starting dividend yield might be just the ticket.
Colgate-Palmolive (CL)
Years of Consecutive Dividend Hikes: 60
Toothpaste and cleaning products maker Colgate-Palmolive has had a forgettable decade.
In 2012, Colgate generated $17.1 billion in revenue. In 2021, this rose to just $17.4 billion, which is a less than 1% annualized growth rate. Despite the brief surge in purchases with the pandemic, Colgate has struggled to show much top-line growth.
Regardless, the company’s dividend growth story rolls on. Due to sizable share buybacks and cost-cutting, Colgate has managed to grow underlying earnings and, in association, its dividend payout despite the lack of revenue growth.
The 2020s may look better than the 2010s. Colgate has a huge presence in emerging markets, and thus suffered as many of those countries saw weak economic performance in recent years. Now, however, with oil, metals and agricultural prices through the roof, countries such as Brazil should see stronger economic performance and thus lead to a solid upswing in Colgate’s profitability.
On the date of publication, Ian Bezek held a long position in NWN, EMR, DOV, and MMM stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
