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4 Stocks That Love to Raise Their Dividends

By Eric Volkman - Jul 13, 2019 at 10:05AM

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You can set it and forget it with this quartet of dividend kings.

You're fortunate if you own stocks that not only crank out dividends on a regular basis, but raise them at least occasionally. 

These four stocks have all that and then some. All are Dividend Aristocrats, meaning that they've hiked their payouts at least once annually for a minimum of 25 years running -- these companies have all done so for more than 60. And although they haven't necessarily been popular with investors lately, all have potential to extend those raise streaks into the future. Let's get right to them.

Dividends and line graph on chalkboard

Image source: Getty Images

Genuine Parts

Genuine Parts(GPC -2.62%) core business is almost a can't-miss opportunity. The company is among the larger and more ubiquitous auto replacement parts manufacturers on the scene. It's also one of the most established, having been founded in 1928.

The company's wares are a common sight in almost any auto parts store, yet despite this strong presence it continues to squeeze out growth. Recent acquisitions were an important catalyst for 3% revenue growth in Q1, while a business model resistant to economic downturns has acted as a natural hedge through tough times -- people tend to keep cars on the road longer when the economy is down, and thus require more parts.

No matter how automated the humble passenger car gets in the coming years, it'll still need replacement parts when components break down. Genuine Parts will be ready and eager to fill that role.

Genuine Parts, which has been lifting its dividend on the regular for 63 years, pays a quarterly distribution of just over $0.76 per share at the moment. At the most recent closing stock price this yields 2.9%.

Procter & Gamble

The consumer goods powerhouse Procter & Gamble (PG 0.06%) owns a hard-to-beat portfolio that includes Head & Shoulders shampoos and conditioners, Bounty paper towels, and Tide laundry detergent, among many other household staples.

Procter & Gamble is the epitome of the slow-growing, cash-generating mature conglomerate. Still, it's managing to add to its top line. Its sales are anticipated to rise by 4% on an annual basis this fiscal year, thanks in no small part to volume increases -- this grizzled veteran knows how to push its merchandise. A significant pruning of the product lineup has also helped profitability.

For income investors, Procter & Gamble should remain a cash-earning machine. The company's considerable free cash flow gives it a lot of financial strength, and as long as those sales are inching up and costs are held at bay this dynamic shouldn't change.

Like Genuine Parts, Procter & Gamble has lifted its dividend for 63 years in a row. The company's quarterly payout is currently just under $0.75 per share for a yield of 2.6%.

3M

Industrial conglomerate 3M (MMM -2.13%) is the top yielder out of our quartet, but much of this has to do with share price weakness -- the company's shares have lost 13% of their value so far this year.

At first blush, that's understandable. Sales have declined on a year-over-year basis for several quarters in a row, and adjusted net profit has also slipped recently. On top of that, 3M has gotten boos from a lot of investors for its $6.7 billion purchase of wound care specialist Acelity, the largest acquisition in its history.

However, the company has a sensible five-year plan to focus on segments with good potential, such as next-generation roads equipped for assisted driving and electricity grid modernization. 3M can be a big player in an industrial/technological segment when it fully leverages the power of its considerable research and development effort, and I think areas like this are the opportunity it needs for the future.

Investors have to be patient with 3M as it weaves this cocoon. But it's turned into a butterfly many times over its long history. 3M has lifted its dividend every year for 61 years; right now its quarterly distribution stands at $1.44 per share, yielding 3.5%.

Emerson Electric

Another stock on the outs with investors is storied engineering company Emerson Electric (EMR 0.41%). Several factors are combining to make an ugly storm this year for its two reporting segments: automation and commercial and residential services (CRS). These include a pull-back from clients in the all-important energy sector, and weakness in certain international markets.

Yet this is relative. In the company's most recently reported quarter, it still managed to deliver 4% year-over-year growth in underlying sales. That's down from preceding quarters, but still quite respectable for such an established industrial company.

Higher growth is in the cards, as the headwinds mentioned above are expected to die down to some extent. Both the company and analysts who track the stock are anticipating revenue growth this fiscal year. The latter, meanwhile, collectively believe per-share earnings will rise by almost 8%. Finally, Emerson is anticipating roughly 12% improvement in free cash flow.

That should keep the dividend raises coming, following a streak of 62 consecutive years. Emerson's quarterly payout is $0.49 per share, which shakes out to a yield of 3.1%.

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Stocks Mentioned

The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
PG
$141.79 (0.06%) $0.09
3M Company Stock Quote
3M Company
MMM
$143.83 (-2.13%) $-3.13
Emerson Electric Co. Stock Quote
Emerson Electric Co.
EMR
$83.64 (0.41%) $0.34
Genuine Parts Company Stock Quote
Genuine Parts Company
GPC
$128.54 (-2.62%) $-3.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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