5 Dividend Kings That Won't Abdicate Their Thrones

With millions of investors scrambling for more income from their investment portfolios, reliable dividend-paying stocks have never seen more demand. For companies that have been fortunate enough to increase their annual dividend payments year in and year out over the long haul, the status of being a top dividend stock is part of their corporate identity.

In order to stay atop the dividend stock world, though, companies that have long streaks of dividend increases have to make sure they give shareholders their expected raises before the end of the year. Given what's at stake, expecting the elite dividend stocks to keep their streaks alive is about the closest you'll ever get to a sure thing in investing.

The blue blood of blue chips
The ultimate mark of distinction for dividend-paying stocks is gaining status as a Dividend Aristocrat. Although the standards for access to the Aristocrats list were relaxed this year, a company still needs to demonstrate a long-term commitment to raising payouts to shareholders. With a minimum streak of 20 years of annual increases, the roughly 50 stocks that qualify as Dividend Aristocrats have proven their ability to sustain their dividends through several challenging periods for the overall economy.

In particular, the financial crisis was a tough time for Dividend Aristocrats. Many financial stocks that previously qualified got kicked off the list when they had to cut their dividends for the first time in decades. Surviving the cash crunch of 2008 while enduring the drain on liquidity that dividends cause was a feat that even some of the largest corporations couldn't match.

But several stocks routinely wait until the last quarter of the year before they implement their dividend increases. Let's take a look at five Dividend Aristocrats you can expect to boost their payouts in the next few months.

Aflac (NYSE: AFL  ) , 29-year streak of consecutive annual dividend increases
Aflac is well-known for its screeching duck ads, but the company has actually overcome some huge hurdles to keep its place among the Dividend Aristocrats. With most of its revenue coming from Japan, Aflac's stock fell hard following the island nation's earthquake and tsunami in early 2011. Through the disaster, though, the insurer was able to stay focused and minimize the earnings hit, and the stock and its fundamentals have recovered nicely. Aflac tends to declare dividend increases in late October, so expect an announcement around then.

Archer Daniels Midland (NYSE: ADM  ) , 36-year streak
As a mainstay in the agricultural sector, Archer Daniels Midland rises and falls with the state of the farm economy. This year's drought will unquestionably take its toll on farming, and crop insurance claims could be the highest on record. Yet with estimates suggesting that taxpayers may foot the bill for 50% to 80% of claims, ADM should still be able to grow. Last year, the company announced its dividend increase at its annual meeting in early November.

Becton Dickinson (NYSE: BDX  ) , 40-year streak
Simple medical equipment may not be the sexiest business out there, but it's something that people always need. Becton has ridden continuing demand to a four-decade streak of dividend increases, and if history is any guide, the company will renew that streak in late November, when it has traditionally announced its higher payouts.

Emerson Electric (NYSE: EMR  ) , 55-year streak
With the longest streak of this group, Emerson typically announces dividend increases in early November. Although the company's earnings growth is seen as being minimal this year, Emerson's power management business produces more than enough profit to sustain a higher payout.

McDonald's (NYSE: MCD  ) , 35-year streak
The fast-food giant enjoyed a strong run of stock performance for several years, but 2012 has been a challenging one for the company. Threats of an emerging-market slowdown and Europe's ongoing troubles have weighed on McDonald's. But given that the company pays out only half its earnings in dividends, McDonald's shouldn't have trouble extending its streak. Last year, the announcement came on Sept. 22, so look for a repeat performance in the next couple of weeks.

Keep your eyes open
If all goes well, shareholders in these five companies should be getting paid even more within the next few months. With predictable histories of increased payouts, these stocks give astute investors a chance to buy shares before they make their dividend announcements.

But these aren't the only good dividend stocks out there. For some more great ideas, check out the Fool's special report, "Secure Your Future With 9 Rock-Solid Dividend Stocks." It's yours today absolutely free, so don't wait -- get your copy today.

Fool contributor Dan Caplinger likes money in hand. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's, Emerson Electric, Becton Dickinson, and Aflac. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy is worth its weight in gold.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 11, 2012, at 11:01 AM, JustMee01 wrote:

    Aflac's most recent guidance is a dividend increase in line with FY EPS growth on a constant currency basis. Full year Aflac Japan growth rates, previously forecast as flat to up 5% are now seen as up 20-25% for 2012. The driver has been the bank channel and WAYS sales.

    Aflac had also pulled back on their earlier forecast of a possible share repurchase resumption in Q4. That was one thing that may have hurt PPS the last few months. Guidance is now that the repurchases will start in Q4 as anticipated, with a small $100MM repurchase in that quarter. The repurchase plan is expected to resume for all of 2013. FY2013 EPS is also reiterated at up 4-7% on a constant currency basis. A divi hike in Q4 is a sure bet, and the repurchase plan is a welcome addition. It should firm-up the downside pressure if Aflac gets back in the trenches buying back their shares. As you could likely tell, I own and like AFL as a long term investment.

  • Report this Comment On September 11, 2012, at 12:15 PM, Darwood11 wrote:

    I own all of the above, except ADM. I've had a problem with props for ethanol production which creates the situation in which food crops are diverted to automobiles. I've been of the opinion that such props and decisions pose a moral hazard.

    Fool analyst Morgan Housal included a CNNMoney,com quote in a recent article, and I quote "Children in some 3.9 million households suffered from food insecurity last year, with their families unable to provide them with adequate, nutritious food at times."

    I realize that it can be argued that ethanol lowers oil imports. But I have no way of knowing how many "poor" families choose between food and gasoline. But I consider it ironic that it's probable that some are burning food in their gas tank.

    Now, on a related vein, I could be criticized for purchasing MCD stock. In my defense, I've done a lot of the family shopping for decades and so I spend a lot of time observing what others buy to feed their families. In the checkout line there is a significant amount of soda pop, sugar laced "fruit drinks," chips, sugary cereals and breakfast "bars." Not to mention instant dinners (pop in the oven or just boil with meat) and beer and wine. So I concluded a long time ago that there is very little I can do about making people buy whole grains, fresh and frozen vegetables, and other healthy choices, which seem to be in less demand. I also split my shopping between four groceries and one Whole Foods.

    So, what people choose to eat is a personal choice. But converting corn to ethanol is diverting food crops to gasoline.

    I'm still waiting for prudent government action to force farmers to use "crop banks" for fields to grow non-edible ethanol crops as a small percentage of each farm's acreage. But that, as so many other things, has evaded our Washington experts, and investors really don't care.

    Oh, I'm sooo excited! The new iPhone5 is coming. Whoopee!

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