15 Dividend Kings for decades of dividend growth

Dividend Kings are the crème de la crème of dividend growers, and should be top of mind for any investor who puts income stability above all else.

  • By Jeff Reeves,
  • Kiplinger
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Dividend Kings are a unique class of stock that offers investors a phenomenal track record of annual dividend increases.

These elite members of the Dividend Aristocrats, which are companies in the Standard & Poor's 500-stock index (.SPX) that have raised payouts once a year for 25 years running, have far more extensive track records. Specifically, Dividend Kings must have a minimum of 50 consecutive years of uninterrupted annual dividend hikes.

Dividend Kings' appeal should be obvious in the wake of 2020's COVID-19 outbreak. Many dividend stocks cut or even suspended their payouts amid uncertainty and disruptions, including mega-bank Wells Fargo (WFC) and automakers Ford (F) and General Motors (GM), among others. Income investors who had hoped these companies were lower-risk simply because they paid dividends received a rude awakening, as the cuts in payouts often came along side deep share price declines.

With half a century of increasing distributions, however, Dividend Kings have a great track record that adds a layer of stability in an otherwise uncertain market environment. Nothing is ever certain on Wall Street, but these 15 stocks have track records that might make them a bit more trustworthy in 2021 than your typical income investment.

Data is as of Feb. 28. Stocks are listed by their dividend-increase streak, from shortest to longest. The list of Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Dividend history based on company information and S&P data. Dividend-growth streaks include the current year if the company has announced a dividend hike in 2021.

Sysco

Market value: $41.0 billion

Dividend yield: 2.3%

Consecutive annual dividend increases: 51

Sysco (SYY) is a well-known food service company that serves institutions like schools and hospitals as well as restaurants. Needless to say, the coronavirus pandemic was not pleasant for SYY, though shares have roughly doubled off their lows last year and are right back to where they were pre-pandemic.

Indeed, most if not all of the negativity has been priced in. Shares actually are up about 9% since early February, when the company reported a staggering 82% year-over-year drop in profits for its fiscal second quarter.

A series of acquisitions in recent years coupled with an already massive scale ensures that when public dining returns to normal, SYY will return to dominance.

But one important red flag to note on the dividend front: Sysco hasn't raised its quarterly dividend since November 2019, when it announced a 15.4% hike in its payout, to 45 cents per share. If Sysco doesn't raise its payout sometime within 2021, it will be booted from the Dividend Aristocrats, and thus, the Dividend Kings.

Federal Realty Investment Trust

Market value: $7.8 billion

Dividend yield: 4.2%

Consecutive annual dividend increases: 53

Federal Realty Investment Trust (FRT) is a special class of publicly traded stock known as a real estate investment trust (REIT). This designation is used to provide certain benefits to capital-intensive firms that buy real estate.

In exchange, these companies must deliver 90% of taxable income back to shareholders. That's a mandate for big dividends, and most income-oriented investors are big fans of REITs as a result.

But while you might find some stocks in this space that offer bigger dividends or have larger market caps, you won't find a better example of consistency in the sector out there than this commercial real estate player.

There's risk here, as FRT operates mixed-use and retail sites that have been hit by reduced in-person shopping during the pandemic. But the long-term leases that provide it stable revenue have also provided a strong baseline of cash that this Dividend King can rely on, even if some of its tenants have admittedly seen better days.

Stanley Black & Decker

Market value: $28.1 billion

Dividend yield: 1.6%

Consecutive annual dividend increases: 53

A mashup of some of the biggest power tool manufacturers on the planet, Stanley Black & Decker (SWK) sells items not just under its namesake brand, but also DeWalt, Craftsman, Mac and other brands you might recognize from the hardware store.

SWK also offers a host of tools and products for professional-grade applications. In fact, according to company literature, 90% of new cars and light trucks in North America and Europe are made using SWK-engineered fasteners of some kind.

That makes Stanley an incredibly reliable income investment for folks, considering that without these products and tools, many businesses simply couldn't operate.

Though mergers and acquisitions make for an interesting history, tracing the company back to its roots as Stanley's Bolt Manufactory, you'll get a deep track record of dividends that show a commitment to shareholders. Namely, 144 years of uninterrupted dividends and 53 consecutive years of increased paydays make it one of the most storied Dividend Kings.

Hormel

Market value: $25.0 billion

Dividend yield: 2.1%

Consecutive annual dividend increases: 55

Packaged foods giant Hormel (HRL) is a popular consumer brand that offers everything from branded chili and pepperoni to Dinty Moore stews, House of Tsang sauces, Skippy peanut butter and many other products you likely have in your home pantry. In fact, according to company literature, more than 40 of the parent company's brands are No. 1 or No. 2 in their product categories.

This reliability in sales translates into big reliability in dividends, as evinced by the Dividend King's 5% dividend bump announced in November – its 55th consecutive year of dividend increases. Hormel has paid dividends in some form for almost a century, dating back to its start as a publicly traded stock back in 1928.

And with its recent $3.4 billion acquisition of nuts giant Planters, you can be sure Hormel will continue to be a staple in American cupboards – and dividend portfolios – for many years to come.

Colgate-Palmolive

Market value: $64.3 billion

Dividend yield: 2.3%

Consecutive annual dividend increases: 57

Colgate-Palmolive (CL), one of the more popular consumer staples stocks out there, has long been a standard of low-risk portfolios thanks to its stable operations. After all, folks will buy toothpaste and cleaning products regardless of whether the economy is up or down, and regardless of whether they are stuck at home because of quarantine or not.

And like many other Dividend Kings, Colgate is a dominant global brand. Consider that the firm says it has worldwide manual toothbrush market share of 31% and global toothpaste market share of about 40% as of the beginning of this year.

The firm still expects the pandemic to cause minor disruptions, including foreign exchange headwinds and harder year-over-year comparisons when stacked up against the "pantry loading" trends of 2020. But investors should expect modest growth all the same.

And on the heels of 2019's $1.7 billion acquisition of European skin care company Filorga and the 2020 buyout of fast-growing oral care brand Hello, there is a good chance of continued long-term success for CL, too.

Illinois Tool Works

Market value: $65.0 billion

Dividend yield: 2.3%

Consecutive annual dividend increases: 57

Illinois Tool Works (ITW), an industrial company founded more than 100 years ago, might not have the name recognition of high-growth tech stocks or even of some popular consumer brands elsewhere on this list.

In fact, even if you're familiar with some of what ITW does, you might not know the full breadth of its operations that span the automotive industry, construction applications, foodservice and much more.

The key takeaway, however, is that this $63 billion industrial powerhouse has diversified revenue streams across many specialty businesses where few other companies can compete with its scale. That makes Illinois Tool Works a very reliable long-term investment.

In fact, on a total-return basis (price plus dividends), the stock has outperformed the S&P 500 by 24 percentage points over the past five years on top of providing a steady stream of dividends to shareholders.

Lowe's

Market value: $118.1 billion

Dividend yield: 1.5%

Consecutive annual dividend increases: 58

Home improvement retailer Lowe's (LOW) might be seen as a lesser alternative to rival Home Depot (HD). After all, the latter company is more than twice the market value and offers a higher dividend yield at present.

But in the last 12 months, Lowe's stock has more than doubled its rival's performance, delivering a total return of 52% versus Home Depot's 21%.

Also, Lowe's also has a much deeper commitment to long-term dividend growth, providing nearly six consecutive decades of payout hikes. The latest was a 9% increase, from 55 cents per share quarterly to 60 cents, effective as of its October distribution. That comes after a generous increase of 15% the prior year.

While many investors might be enamored with its larger rival, Lowe's makes a compelling case for why it should be part of an income-oriented portfolio right now. And considering the home remodeling boom that began in 2020 is expected to continue through at least the first half of 2021, now remains a great time to give this Dividend King a look.

Johnson & Johnson

Market value: $424.3 billion

Dividend yield: 2.6%

Consecutive annual dividend increases: 58

The granddaddy of low-risk income stocks, Johnson & Johnson (JNJ) checks all the boxes for many dividend portfolios.

J&J is massive, with a market cap of well more than $400 billion that puts it in the top 20 U.S. stocks by that measure, and it reels in more than $90 billion in annual revenue. It's also among the top of the list in dividend payers, with its 2.6% yield significantly better than the average of about 1.6% for the typical S&P 500 stock at present.

And, of course, it also boasts nearly 60 years of consecutive dividend increases, easily qualifying it for membership in the Dividend Kings.

Add in one extra layer of attractiveness to this stock – its COVID-19 vaccine was put in the spotlight amid expectations for FDA emergency-use approval, which it just received – and it's no wonder that JNJ shares recently set new all-time highs.

Coca-Cola

Market value: $212.5 billion

Dividend yield: 3.4%

Consecutive annual dividend increases: 59

Investing icon Warren Buffett started building his stake in Coca-Cola (KO) back in 1988 just after the "Black Monday" crash. Now, Berkshire Hathaway (BRK/B) owns a staggering $22 billion of the company – and part of the reason it has built that stake is because Buffett & Co. are crazy about dividends, and few deliver better than Coke.

Coca-Cola has paid dividends to its shareholders for more than a century. And for the past 59 years, the company has increased its payout at least once annually. The most recent increase, a modest 2.4% uptick to 41 cents per share, was announced in February.

With powerful beverage brands including its namesake soft drink as well as Minute Maid juices and Powerade sports drinks, it's easy to see how Coca-Cola racks up consistent sales. But the firm is also evolving to adapt to changing consumer tastes, including the 2019 acquisition of the popular Costa Coffee brand, the 2020 launch of Coke-branded energy drinks and recent announcements that its U.S. bottling operation will use 100% recycled materials to appeal to eco-conscious shoppers.

Cincinnati Financial

Market value: $15.7 billion

Dividend yield: 2.6%

Consecutive annual dividend increases: 61

Considering the rather unfortunate fact that U.S. financial stocks have seen plenty of ups and downs in the last few decades, it's no mean feat that Cincinnati Financial (CINF) has managed to not only avoid cutting dividends over the past six decades, but has actually found a way to keep pushing them higher.

Sure, Cincinnati Financial is mainly an insurance company focused on personal life insurance and annuities. But when you consider that mega-insurer Allstate (ALL) slashed its payouts in half in the wake of the 2008 financial crisis, it isn't fair to just say CINF simply lucked out by not being involved with mortgages.

The truth is that while insurance is indeed a generally reliable business thanks to regular premium payments from customers, CINF is a particularly well-run company.

Shares still are about 10% off their early 2020 highs, from before pandemic-related volatility hit Wall Street. But the stock is up double digits in 2021, fueled in part by Street-beating quarterly profits and revenues reported in January.

Alongside those results, CINF also declared a 5% dividend increase, to 63 cents per share, effective as of its March payment. That continues its membership in the Dividend Kings with a 61st consecutive year of increasing payouts.

3M

Market value: $102.2 billion

Dividend yield: 3.4%

Consecutive annual dividend increases: 63

Chemicals giant 3M (MMM) is the brains behind a host of products, including adhesives, sheeting, filters and lab supplies, just to name a few of its many products.

While its branded N95 masks got a lot of attention during the early days of the pandemic, it's important for income investors to instead focus on the breadth of its business instead of one high-profile product – be it those N95s, its Post-It notes, its Scotch-Brite sponges, or its Command adhesives and fasteners.

The reality is that the whole is much more than the sum of these parts, thanks to 3M's $100 billion size and deep relationships with a host of industries. That diversified revenue stream helps support sustainable and growing dividends.

Dividend Kings aren't bulletproof, however, and MMM is no exception. The stock suffered a roughly 20% share-price drop in 2018 thanks to earnings trouble. And its dividend growth has slowed to a trickle – its increase for its 2021 quarterly payouts was a sub-1% uptick to $1.48 per share.

But over the long term, 3M has proven a reliable source of dividends and a stable industrial stock that can easily fit into most income portfolios.

Emerson Electric

Market value: $51.5 billion

Dividend yield: 2.4%

Consecutive annual dividend increases: 64

Like a host of stocks on this list, Emerson Electric (EMR) is appealing in part because it's a company that has its fingers in many pies.

The firm designs technology and engineering products across a wide array of uses, including instruments for oil and gas companies, programmable thermostats, ignition systems for furnaces, valves and sensors for use in the food and beverage industry and much more.

Of particular note is its life sciences segment, which has gotten a lot of attention lately as EMR is part of the "pharmaceutical cold chain" that helps keep sensitive medications like the COVID-19 vaccine at the right temperature so they remain effective.

This company has deep roots, dating back to 1890, as a manufacturer of some of the first electric motors. It has paid dividends since 1947, and thanks to a half-cent bump at the end of 2020, it is now riding 64 consecutive annual increases to those payouts.

Procter & Gamble

Market value: $306.2 billion

Dividend yield: 2.6%

Consecutive annual dividend increases: 64

Personal care giant Procter & Gamble (PG) is a $300 billion powerhouse that has long been thought of as a "widows and orphans" stock – that is, the kind of investment you keep forever because you expect it to be around and provide for your family even if something happens to you.

Though largely recession-proof with powerful brands like Gillett razors, Pampers diapers, Charmin toilet paper and Tide detergents, it's worth noting that P&G has not been without some short-term headwinds. The pandemic has caused some folks to cut back on grooming items as they lounge around the house in sweatpants.

However, this is hardly a reason to run away from this tried-and-true Dividend King that has paid a cash distribution for 130 straight years and raised its payout in each of the past 64 years. Especially with vaccinations starting to run apace and the world slowly starting to feel a little more normal.

Genuine Parts

Market value: $15.2 billion

Dividend yield: 3.1%

Consecutive annual dividend increases: 65

Genuine Parts (GPC) is the auto parts supplier perhaps best known for its NAPA brand in the U.S. However, it offers replacement parts across the globe, in markets including Canada, Europe and Australia.

It also does far more than just car parts, offering components for buses, motorcycles, farm equipment, boats and even industrial machinery use in forestry, mining and other applications.

GPC was founded in 1928 with the purchase of a modest motor parts store in Atlanta, and has since grown to currently include 3,600 sites in 14 countries.

On top of its rich history as a company, Genuine Parts also has deep roots as a dividend payer. It has offered a regular check to shareholders every year since going public in 1948, and has increased its payouts for 65 consecutive years in total, putting it tied for the longest streak among the Dividend Kings.

GPC's most recent improvement was a 3.2% upgrade announced for the dividend to be distributed in April.

Dover

Market value: $17.7 billion

Dividend yield: 1.6%

Consecutive annual dividend increases: 65

With no offense to Dover (DOV), this dividend stock is exactly the kind of boring industrial company many investors overlook. And that's a shame, considering the stock has actually outperformed the broader S&P 500 by a few percentage points over the past five years.

Founded in 1955, the industrial conglomerate makes everything from hydraulic pumps to refrigeration equipment to products for oil and gasoline-related businesses. The profit and revenue growth isn't tremendous in these segments, but the business is indeed reliable and has helped support 65 consecutive years of increased payouts by this Dividend King.

The annual increase last year was just half a cent, or roughly 1%, in part thanks to coronavirus disruptions affecting the business. However, shares recently eclipsed their early 2020 highs, which hints that the business is stabilizing – and perhaps poised for a bigger increase in 2021.

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