Don't Ignore These 3 Dow Dividend Powerhouse Stocks

You need to know the names of these giants of American industry.

May 17, 2014 at 11:02AM

Dividend investors love to get as much income as they can find. But picking the best dividend stocks in the Dow Jones Industrials (DJINDICES:^DJI) takes more than just finding a high yield. You also need an ongoing commitment from a company to keep its payout growing over time. If you're planning to hold onto stocks for the long run, dividend growth is much more important than current dividend yield to your eventual results.

Fortunately, investors in the Dow Jones Industrials can get the best of both worlds: dividend growth and promising yields. All you have to do is look to an elite group of companies known as the Dividend Aristocrats. Let's take a closer look these stocks and why Coca-Cola (NYSE:KO), 3M (NYSE:MMM), and Procter & Gamble (NYSE:PG) stand out from the crowd.


Joining the aristocracy
To become a Dividend Aristocrat, a company needs to have raised its dividend payout every single year for at least 25 years. Only a few dozen companies qualify for this prestigious list throughout the entire stock market.

But just because a stock is a Dividend Aristocrat doesn't mean that it deserves your hard-earned cash. For instance, both of the energy giants in the Dow Jones Industrials are Dividend Aristocrats, but both of them also face the ongoing challenges of growing their oil and gas production even though their aging existing wells are constantly in a state of production decline. Similarly, the world's biggest retailer has a long history of dividend increases, but lately, it has struggled to boost its revenue and maintain its customer base of middle-class Americans.


Still, Coca-Cola, 3M, and Procter & Gamble have certain characteristics that make them stand out from their illustrious Dow peers. Coca-Cola's beverage business sounds simple, but the Atlanta giant has turned its red cursive logo into a $79 billion brand that topped the world's most valuable brand names until 2013. Coca-Cola has a presence in more than 200 countries, and even though its soft-drink business has undergone pressure in the U.S. and elsewhere, Coca-Cola's non-sparkling beverage lines have taken off. A critical partnership with the maker of the Keurig home-brew coffee machine could open new growth avenues for Coca-Cola, and meanwhile, investors enjoy a 3% dividend and a 52-year streak of rising dividend payments.

3M is best-known for Post-It Notes, but it offers tens of thousands of different products in diverse industries from health care and computer screens to commercial safety and security items. Despite the inevitable rises and falls in its business, 3M has maintained a 56-year history of annual dividend increases, resulting in a current yield of 2.4%. More importantly, though, 3M has moved toward reinventing itself as an innovation-focused conglomerate, looking for what could become the next industry-changing products wherever it might apply.


Source: Procter & Gamble.

Investors in Procter & Gamble see the success of their stock every day, with products in your own home showing the way consumers need the company. With more than 4 billion customers in 180 countries across the globe, Procter & Gamble has an impressive stable of around two dozen billion-dollar brands. Even though Procter & Gamble has been immensely successful, the consumer-products giant is still working hard to find new avenues for growth, especially in emerging-market areas where consumers are coming into contact with P&G products for the very first time. Meanwhile, with 58 years of dividend increases and a 3.2% yield, Procter & Gamble treats Dow investors right.

These three Dow stocks have just about everything you want to see from a high-quality dividend stock. With long histories of rising dividends, solid yields, and promising prospects, all three components in the Dow Jones Industrials are worth considering for your dividend portfolio.

If you're looking for even more great dividends (and with a little more yield) you can read this free dividend report. 

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends 3M, Coca-Cola, and Procter & Gamble and has options on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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