9 Companies That Have Raised Their Dividend for at Least 56 Straight Years

I've said it before and I'll say it again: Dividend stocks are everywhere, but not all dividend stocks are created equally. While some companies throw a bone to shareholders now and then other companies are extremely generous with their profit-sharing via dividends.

Dividends tend to hold a three-pronged purpose in the investing world. First, it gives investors a long-term incentive to hold onto a company knowing that they're going to get a monthly, quarterly, semiannual, or annual payout. This helps reduce volatility from day-traders and allows investors to sleep better at night.

Source: Tax Credits, Flickr.

Secondly, dividends are a great source of supplemental income for both old and young investors. According to an ABC News report from a few years back, Susanna Kim noted that between 1910 and 2010 dividend yield and dividend growth accounted for 90% of the S&P 500's (SNPINDEX: ^GSPC  ) nominal return. In the U.S., with Social Security paying out only so much annually, dividends can be a great source of sustainable income in your retirement years.

Lastly, dividend growth is often a sign of stability for a company. The ability to share growing profits with shareholders is one of the greatest indicators of a business' ability to grow. Not to mention, a strong dividend tends to keep short-sellers intent on driving down the price of a stock far away.

In total, there are a few dozen stocks which belong to a rare class of dividend-paying companies known as Dividend Aristocrats. These are companies which have boosted their annual dividend in each of the past 25 years, or more. As you might imagine, the further you go out in terms of years, the thinner the list gets.

Among these Dividend Aristocrats sit nine companies from a diverse array of sectors which have increased their payout for at least the past 56 years. That's not a misprint, folks -- that's really 56 or more years of boosted payouts! Let's have a look at these nine companies and examine a few of the traits that makes them tick to determine whether or not these incredible streaks can continue.

Company

Dividend Streak in Years

Current Yield

Diebold 

60

2.9%

American Water States 

59

2.6%

Dover 

58

1.8%

Northwest Natural Gas 

58

4.1%

Procter & Gamble 

58

3.1%

Genuine Parts 

57

2.7%

Parker-Hannifin

57

1.5%

Emerson Electric

57

2.5%

3M 

56

2.5%

Source: Individual company press releases.

Probably the biggest factor that'll determine whether or not these streaks can continue is if the products or services provided by these businesses are basic necessities. Basic-needs stocks can survive a recession relatively unscathed since consumers need their products year round. This gives basic-needs companies incredible pricing and branding power which they can use to funnel juicy dividend payments to investors.

Of the companies listed above, we have quite a few that would fit the bill, including Procter & Gamble (NYSE: PG  ) , a consumer goods company that I've chosen for my Basic Needs Portfolio experiment, American Water States (NYSE: AWR  ) , and Emerson Electric (NYSE: EMR  ) .

Think about all of the things we consume regularly that we need to buy regardless of whether the economy is going boom or bust. Procter & Gamble, the maker of Crest toothpaste and Tide detergent among a number of other products, understands this well. Because these are high-demand products it rarely has to discount which gives the company leverage to focus instead on building up the brand image and introducing new products to expand its portfolio.

For American Water States and Emerson Electric it's also about the basics: water and electricity. While the water and electric industries are often regulated, they're also devoid of a lot of competition from region to region because the barrier to entry of building electric plants or wastewater treatment facilities is extremely high. Thus, like P&G, American Water States and Emerson Electric have relatively stable cash flow which they can use to boost dividends for shareholders.

All told, these basic-needs stocks look as if their dividends mayl continue to increase.

Diversification is also a big component when it comes to growing a dividend -- just as shareholders of 3M (NYSE: MMM  ) . We might think of the old-school 3M which made Post-It notes and other office products, but the company is so much more than that now. 3M makes surgical supplies for the health care sector, provides commercial graphics systems, develops tapes, adhesives, and sealants for the industrial sector, as well as makes numerous home and office products. Furthermore, it does so around the globe, meaning weakness in one part of the world or one operational segment can likely be offset with strength in another. That's potentially a formula for continued dividend growth.

Finally, sitting in the middle of a rapidly growing industry also helps. While I just as easily could have included Genuine Parts (NYSE: GPC  ) among the "diversified" category with 3M since it has operations worldwide and operates throughout a number of sectors, it's the company's ties to automotive replacement parts that could give it the ability to boost its dividend further. Automotive demand around the world has been strong, and Genuine Parts just last week recorded a 23% increase in revenue from the segment. With few signs of demand slowing and a growing middle-class in China, India, and other emerging markets I'd suggest Genuine Parts' streak will continue

Want more great dividend ideas? Here's what some of our top analysts have on their radar
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

 


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  • Report this Comment On April 28, 2014, at 9:06 PM, shivamwi wrote:

    I think the authors have ignored Colgate. With it stock split and increase in dividend yield, CL stands as number one consumer good company .

    However, I agree ovelr all in the long haul dividend paying company are the way invest

  • Report this Comment On April 29, 2014, at 2:24 PM, rmac7 wrote:

    I was looking at AWR on yahoo finance. I went to historical prices then, dividends only.

    They did not raise their dividend in 1991, 1994, 1998, 2005, 2008, 2010.

    unless yahoo information is wrong. all they did is pay a dividend during this time

  • Report this Comment On April 30, 2014, at 6:20 PM, TMFUltraLong wrote:
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