There are some great market-beating dividend stocks hiding in plain sight for investors who are willing to look off the beaten path. And with Treasury yields at historic lows and growth stocks trading at astronomical levels, it may be time to look for some value in dividends.
What may shock you is that the three stocks I'm going to highlight below have all been paying a dividend for over 100 years. That kind of long-term performance is why under-the-radar dividends from Stanley Black & Decker (SWK +5.18%), Johnson Controls (JCI +3.45%), and Church & Dwight (CHD 0.61%) are worth adding to your portfolio.
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Power tools and dividends
Selling hardware tools isn't a high-growth business, but it is a highly profitable, dividend-paying machine. Stanley Black & Decker has been paying a dividend since 1895 and you can see that since 1990 the dividend and stock have risen steadily.
Data by YCharts.
Stanley Black & Decker has been able to bring together a number of powerful brands to effectively dominate the power tools market. It has Stanley and Black & Decker, of course, but DeWalt, Craftsman, Irwin, and Porter-Cable round out the portfolio and give the company a full suite of products for nearly every market and price point.
The power tool business has gotten stickier as batteries have proliferated as well. Once a consumer or contractor starts buying one brand of product it's often worthwhile to keep buying the same brand because batteries and chargers they already own will work with multiple products.
Given the consistency of Stanley Black & Decker for over a century, the stock isn't terribly expensive at 25 times earnings, and the 1.4% dividend yield that could be reliable for another century is the real reason to own the stock.
Don't sleep on HVAC stocks
Johnson Controls probably does a lot of things you've experienced but never appreciated. The company designs and produces the heating, ventilation, and air conditioning systems for large buildings like stadiums and skyscrapers and after buying Tyco it's now providing security solutions to these same locations. It's a turnkey solutions provider for large buildings and that's proven to be a great business over the long term.
Financially, Johnson Controls' business is going to be cyclical along with the construction market. But long-term it's profitable, and the company is using its cash to pay dividends and buy back stock.
Data by YCharts.
Earlier this month, management announced a $2 billion increase in a share buyback plan to $4 billion and upped the dividend by $0.04 to $1.08 annually.
Shares don't appear cheap at 52 times trailing earnings, but you can see above that earnings can be volatile. And with a 1.8% dividend yield that's been paid since 1887, this is a great dividend stock for buy-and-hold investors.
Consumer staples are great dividend stocks
Some products seem to go undisturbed in the competitive landscape for decades. And Church & Dwight's core brands like Arm & Hammer, Trojan, and Oxi Clean seem to fall into that category.
You can see below that Church & Dwight isn't going to be a high-growth stock, but over time the company continues to expand and the dividend grows with it. In fact, this dividend has been paid each year since 1901.
Data by YCharts.
What I like about Church & Dwight is how unassuming but powerful the company is. It makes well-known brands and is highly profitable, and start-ups aren't eager to go out and disrupt the baking soda or condom markets. These are well-established products with lots of customer loyalty. The stock isn't cheap at 27 times earnings, but the 1.2% dividend yield and long history of payouts should make this a stock to put on your radar.
Don't overlook great dividends
Great stocks don't have to come from high-profile companies that are making news every day. Sometimes, the grind of everyday business is enough to create a lot of value for investors. And right now, these are three long-running dividend stocks that should be getting more attention from investors.
