It's a great feeling when a dividend check hits your bank account. Dividends are a source of passive income to supplement the earnings from your job, while also helping defray higher expenses from rising inflation. There are a wide variety of dividend companies, but investors need to look for those with a consistent history of rising payouts.
Such stocks are usually backed by a sturdy business model, a strong brand, and healthy free cash flows. The business should also have a stellar track record of raising dividends over the years and be a market leader in its industry. These attributes will stand you in good stead if you are looking for a dividend stock that can pay you for life.
Here are four stocks with the above characteristics that should continue to dish out healthy dividends for the foreseeable future.
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1. Procter & Gamble
Procter & Gamble (PG -0.65%) is a storied consumer goods company whose brands include Pampers, Tide, and Gillette. The company has improved its net sales from $65.1 billion in fiscal year 2017 to $76.1 billion in fiscal 2021. Its dividend per share has also risen from $2.70 to $3.24 over the same period.
Procter & Gamble continued to post robust numbers in its latest period, the fiscal 2022 second quarter, with net sales rising by 6% year over year to $20.9 billion and net income climbing by 10% to $4.2 billion.
Its board recently declared a quarterly dividend of $0.8698 per share, translating to an annual dividend of $3.4792, a 7.4% increase over the prior year. Procter & Gamble has an impressive track record of paying out dividends for 131 consecutive years and has raised its annual dividend consecutively over the last 65 years.
2. Kimberly-Clark
Moving on to another consumer goods giant, Kimberly-Clark (KMB -0.53%) was established in 1872 and sells its well-known brands such as Huggies, Kleenex tissues, and Scott paper products in over 175 countries. Like Procter & Gamble, Kimberly-Clark has demonstrated a steady rise in net sales, from $18.3 billion in fiscal year 2016 to $19.1 billion in fiscal 2020. The company paid out $3.64 per share in dividends for fiscal 2016, and it rose to $4.24 four years later.
The company's products experienced increased demand from the pandemic and saw net sales inch up by 3% year over year to $4.9 billion in the fourth quarter of 2021. Despite net profit falling year over year, Kimberly-Clark continued generating a healthy free cash flow of $1.7 billion in fiscal 2021. The board of directors approved a 1.8% year-over-year increase in the quarterly dividend to $1.16 per share, marking the company's 50th consecutive annual dividend increase and elevating it into the league of Dividend Kings.
Image source: Getty Images.
3. Starbucks
It seems like there's a Starbucks (SBUX 1.27%) on nearly every corner, as the global coffee chain continues to expand worldwide. With more than 33,000 stores around the world, the company has shown itself to be resilient in the face of the pandemic.
Revenue fell in fiscal 2020 from $26.5 billion to $23.5 billion due to temporary forced store closures but rebounded in fiscal 2021 to $29.1 billion. Net income also rebounded sharply from $924.7 million in fiscal 2020 to $4.2 billion as the coffee giant continued to expand in China.
Starbucks recently bumped up its quarterly dividend from $0.45 to $0.49, making this the 11th consecutive annual dividend increase. The company has grand plans with its Growth at Scale initiative, aiming to increase its global retail store base to around 55,000 by fiscal 2030. If it can reach this goal, investors should see its dividend continue to rise over the coming years.
4. Nike
Nike (NKE 0.61%), a market leader in athletic footwear and apparel, reported the same sharp rebound as Starbucks due to its digital presence and strong brand reputation. Its revenue saw a dip from $39.1 billion in fiscal 2019 to $37.4 billion in fiscal 2020, but headed higher in 2021 to $44.5 billion, surpassing its pre-pandemic level. Net income rose in tandem, hitting a three-year high of $5.7 billion as the sports giant continued to expand its customer base.
In a show of confidence, Nike's board hiked its quarterly dividend by 11% from $0.275 per share to $0.305. This increase was the company's 20th consecutive year of dividend increases, putting it five years away from becoming a Dividend Aristocrat.
Results for the first half of fiscal 2022 continued to impress: Revenue was up 8% year over year while net income climbed 16% year over year. Nike has invested in its digital future with its latest acquisition, RTFTK, a company that specializes in the creation of non-fungible tokens in the form of sneakers and other collectibles. Should this move pay off, it could see Nike reporting steadily higher earnings and dividends as its online presence grows stronger.
