Dividend Stocks for the Next 100 Years

There are two main ways companies can pay investors for owning their stock. They can buy back shares -- reducing the numbers of shares outstanding and theoretically raising the stock price -- or they can pay dividends.

Buybacks are common in corporate America, but there's a lot of debate about how effective they are. Companies are notoriously bad at timing purchases, often buying high and then offering shares when the stock is low, so there's an element of risk and luck to buybacks.

Solid, consistent dividends, on the other hand, force management to operate with discipline, because they know a portion of their income is going to be paid out each year. In the long term, dividends often result in market-beating returns for patient investors.

If you want a dividend portfolio that won't require so much as a look for decades, or even a century, you've come to the right place. Below I have five dividend stocks that have a long history of paying dividends, and I think they'll continue to do so for another 100 years or more.

3M (NYSE: MMM  )
For a dividend to last 100 years, the company behind the payout has to be able to stand the test of time. The ebb and flow of consumer fads can't drive results; there has to be real staying power behind the business.

That's why 3M is my first pick as a dividend stock for the next century. It makes everything from Post-it Notes to Scotch Tape to protective films for smartphones and electrical connectors. There's really no major consumer trend that 3M doesn't participate in and profit from. What's most important is that its research and development is actually built to adapt and innovate through changes in the market. 3M doesn't see change as a risk; it sees change as an opportunity.

For investors, that element of innovation and diverse line of businesses has resulted in an extremely reliable dividend. 3M has paid out a quarterly dividend for 97 years, and it has increased the payout each year for the last 55 years. That's the kind of solid dividend and dividend growth investors look for, and with a current yield of 2.1%, the payout each year is better than you can get from five-year Treasuries.  

Colgate-Palmolive (NYSE: CL  )
Who could argue with the staying power of a company that makes toothpaste, soap, laundry detergent, and pet food? These are consumer staples that are essential here in the U.S., and their use is growing abroad.  

Colgate-Palmolive may not be the most exciting company to follow, and it's growing at a snail's pace (2.1% last year), but for investors looking for dividends what matters is that it's growing, profitable, and makes products people need. That's why the company has paid a dividend for 118 years and increased its payment for the past 50 years.

The Procter & Gamble Company (NYSE: PG  )
Colgate-Palmolive has dominant positions in a few consumer brands, while Procter & Gamble has a strategy of building dozens of powerful consumer brands. The company calls them its "50 Leadership Brands," and they include Bounty, Charmin, Old Spice, and Swiffer, to name a few.  

The good thing about these brands is they have staying power and are incredibly profitable for Procter & Gamble and investors. The challenge is that they're not high-growth markets. Procter & Gamble grew a barely noticeable 0.6% last year, so this isn't a growth stock by any stretch. But earnings per share are still on the rise. That's because, like Colgate-Palmolive, the company is buying back shares and reducing the total number of shares outstanding.

PG Shares Outstanding Chart

PG Shares Outstanding data by YCharts.

When combined with a 3.2% dividend yield, that's a solid return for shareholders, and the payout has staying power. Dividends have been paid for 123 straight years and grown for 57 straight years, and considering the products Procter & Gamble makes are necessities, the dividend is about as safe as they come for investors.

DuPont (NYSE: DD  )
DuPont isn't a company that gets a lot of publicity outside of Jeff Gordon's fan club, but it touches our lives more than you might think. Like 3M, it makes products that go into things we use everyday, so it's a key component to businesses around the world. Plastics and other engineered materials are DuPont's bread and butter, and they show no signs of diminishing in importance -- but I think DuPont's staying power is in your fridge.

Agriculture actually accounts for 37% of DuPont's business and is by far its fastest growing market. Last quarter, agriculture grew 7% from a year earlier, while the rest of the business shrank significantly.  

The advantage in agriculture is that DuPont can cross-sell seeds, pesticides, and herbicides that are designed to work together. This creates more value for research dollars and increases sell-through for the company.

In the short term, DuPont has faced challenges in some of its markets, but I think these are blips in the company's long-term story. Chemicals are becoming more complex and specialized, and agriculture requires more advanced seeds and chemicals, which plays into DuPont's wheelhouse.

Dupont provides a solid 3.1% dividend yield for investors and has been paying a dividend since 1904. This might be the time to buy the chemical company on an earnings downswing, because in the long term this company and its dividend have staying power.

Stanley Black & Decker (NYSE: SWK  )
The surprising stock on this list is Stanley Black & Decker, an under-the-radar stock that has paid dividends for 137 consecutive years and increased its dividend for 46 straight years. 

Stanley Black & Decker brands may not be staples to every consumer, but if you're doing construction it's hard to work without them. Stanley Tools has been making things like hammers, tape measures, and wrenches since 1857, DeWALT has been making power tools since 1924, and Black & Decker has been making hand and power tools since 1910. In an industry that relies on consistency and quality, these names are top notch.

Operationally, Stanley's 2009 acquisition of Black & Decker is a hit and appears to have been a great deal for both sides. In the last three years the combined company has grown revenue 34.5%, and net income is up 342%. That's in part because of the economic recovery, but it's also a testament to how well the two companies fit together.

Stanley Black & Decker's dividend yield of 2.2% isn't a leader on the market, but with a 137 year history of paying back investors and a solid business I think this payout is here to stay.

Make dividends work for you
The beautiful thing about buying dividends is that, unlike bond payments, they often increase. Look at the payout of these five companies since the mid-1980s and consider what this consistent growth will do if you own these stocks and hold them for a few decades.

MMM Dividend Chart

MMM Dividend data by YCharts.

Buying solid dividends like these is not only an easy way to invest; it's profitable over the long term.

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  • Report this Comment On October 13, 2013, at 3:12 PM, funfundvierzig wrote:

    "Agriculture actually accounts for 37% of DuPont's business and is by far its fastest growing market. Last quarter, agriculture grew 7% from a year earlier, while the rest of the business shrank significantly."

    According to a comprehensive analysis published in Seeking Alpha by Blue Jay Research today, Oct. 13, 2013, DuPont AG accounted for only 29.6% of DuPont's total business revenue by segment in 2012. Four years earlier in 2009, the percentage of revenue contributed by DuPont AG was 30.9%.

    In the most recent quarter, Q2 2013, DuPont AG revenue grew by 7% but 6% represented price hikes, and only a feeble 1% was volume growth.

    The "growth" of DuPont AG is more a function of PR dissimulation and hype by DuPont executives and their PR operatives than genuine and robust expansion of sales and innovative products.

    Merely the individual opinion of one retail investor...funfun..

  • Report this Comment On October 29, 2013, at 8:40 AM, Ravenor wrote:

    If you are a long-term investor and think these will grow for the next 100 years, why don't you currently maintain a position for any of these stocks? Your CAPs page does not have a single one of these stocks.

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