The 30 stocks among the Dow Jones Industrials (DJINDICES:^DJI) aren't just the leaders in their respective industries. They also pay out billions of dollars in dividends to their shareholders, making them some of the most sought-after dividend stocks in the market.
But even better than getting reliable income from a stock is getting growing amounts of income year after year. With so many Dow stocks having long streaks of raising their dividends on an annual basis, a good number of them have made it a habit to implement their higher payouts at the same time every year. Let's look at the stocks in the Dow with long streaks of annual dividend increases that are due to make healthier payments to their shareholders in the near future.
Procter & Gamble (NYSE:PG)
With two dozen billion-dollar brands, Procter & Gamble is a global powerhouse, selling well-known consumer products to billions of households around the world. Even though the company has been under fire lately from activist investor Bill Ackman and others for failing to keep up its history of innovation and adept business execution, it has gotten through tough periods before in its 56-year history of raising dividends annually.
Last year, P&G announced its 7% dividend increase on April 13, around the same time as it has boosted payouts in past years. A boost in its quarterly dividend to an even $0.60 per share would be consistent with that past rise, raising the stock's yield to 3.1% and also increasing confidence that the company is turning things around.
Exxon is the largest company in the Dow by market cap, and it also became the world's largest dividend payer last year, when it boosted its payout by a whopping 21%. What's particularly impressive is that at the same time that Exxon makes such substantial dividend payments, the amount it spends on share buybacks is twice as big as it spends in cash returned directly to shareholders.
Last year's big dividend announcement came on April 25, marking its 30th consecutive annual increase, and that timing was consistent with past years' dividend increases. Expecting a repeat of last year's boost of $0.10 per share is probably too much to hope for, given a history of more modest $0.02 and $0.03 increases, but with a payout ratio of just 22%, Exxon has room to give shareholders whatever size of raise it thinks is most appropriate.
Chevron is No. 2 to Exxon in the U.S., but it still has an impressive record of 25 straight annual dividend increases. It also pays a higher yield than Exxon, with Chevron's 3% yield beating out its larger rival by half a percentage point.
Last year, Chevron also released news of its higher dividend on April 25, with a big 11% boost continuing a run of accelerated growth in recent years. A similar increase this year would take the payout to an even $1 per share quarterly, and like Exxon, Chevron's current payout ratio of 26% would make that increase perfectly viable.
Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson has a similar history of popular consumer products as Procter & Gamble, with J&J's focus being on health-care needs such as Band-Aids. Yet unlike P&G, Johnson & Johnson goes well beyond the consumer realm, making medical devices as well as brand-name pharmaceuticals. Product recalls both in the consumer arena and with hip implants over the past several years have led to questions about the company's quality control, but the company has survived past problems of the same type and should be able to again.
J&J has a 50-year history of raising its dividends every year, and last year, it made its move on April 26. If it were to repeat its boost of 7% from last year, investors could expect $0.65 per share quarterly from the health-care conglomerate in its next dividend payment.
Get the dividends you need
The Dow is a great place for income-seeking investors to get strong dividend stocks. By focusing not just on yield but also on a demonstrated commitment from a company to let shareholders participate in a company's growth through rising payouts, the companies above have deservedly earned their reputation as some of the best dividend stocks you can buy.