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.

Dividend

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.

Ko

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.

G

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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers