Dividend investing is a great way to get the income you need from your portfolio. But you can't just buy any dividend stock and count on it to keep delivering the regular income you need through good times and bad. Unfortunately, many dividend stocks run into tough situations and have to reduce or even eliminate their dividend payments in order to survive. That can leave you facing the double-hit of suffering a share-price decline at the same time that your dividend income disappears.
Fortunately, some dividend stocks have stood the test of time, not only delivering reliable dividend income year in and year out, but also consistently increasing the amount of money they pay to their shareholders. To give you some great ideas on stocks you can count on to play this vital role in your income portfolio, let's take a look at three rock-solid dividend stocks that investors have owned for decades to beef up their income.
Colgate-Palmolive (NYSE:CL) is a stalwart of the consumer-products space, with a market-leading position in its namesake toothpaste as well as offering a lineup that includes popular soaps, cleaning products, and pet nutritional products. The company has global scope, getting more than 80% of its sales from its international business, and its dental products in particular earn high marks from professionals advising their patients, which help to drive further business.
From a dividend perspective, Colgate has made annual dividend increases for 51 straight years, and although its yield is only around 2% right now, that in part reflects the huge growth that the company's shares have seen. With a 10-year average annual return of more than 14%, Colgate-Palmolive has plenty of potential to tap emerging markets with rising consumer bases eager to pay up for its premium products.
2. Altria Group
Tobacco giant Altria Group (NYSE:MO) inspires debate among dividend investors, some of whom question whether so-called "sin stocks" are socially responsible holdings for their portfolios. Nevertheless, Altria has an impressive 45-year track record of raising its dividends each year, and it has also produced some lucrative spinoff opportunities for its long-term shareholders, including food giant Kraft Foods and international tobacco offshoot Philip Morris International. The stock currently yields more than 4% despite an impressive run-up in its shares that have produced returns of 50% from its lows earlier this year.
Critics point to falling volumes of cigarette sales as a sign of Altria's inevitable decline. Yet at least so far, Altria has been able to offset those lower volumes by raising prices, and its efforts to promote alternatives to traditional cigarettes have produced encouraging early results. Given its past tenacity in finding ways to survive despite long odds, Altria should continue to generate the income that investors have come to expect from the tobacco company.
3. Procter & Gamble
As we saw above with Colgate-Palmolive, consumer-staples stocks enjoy the predictability of having a huge customer base around the world with constant and unwavering demand for their products. Procter & Gamble (NYSE:PG) relies on that fact to an even greater extent than its peers in the consumer-products space, with about two dozen billion-dollar brands serving billions of customers in 180 countries around the world.
For 58 consecutive years, Procter & Gamble has increased its dividend annually, and even now, the company pays a noteworthy yield of nearly 3%. Given the pace at which P&G's stock price has risen as well -- the stock has generated total returns of almost 11% annually over the past five years -- Procter & Gamble has also demonstrated its ability to capture promising growth opportunities, especially in rapidly growing markets abroad.
These three stocks aren't the only strong dividend payers in the market, but if you're looking for a combination of an attractive yield and a long history of dividend growth, it's hard to find better companies out there. By looking closely at the dividend stocks you own in your portfolio, you can make sure you have the highest-quality companies whose business models have the best chance at generating the profits they'll need to keep paying dividends far into the future.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.