Many investors rely on income from their investment portfolios, and right now, dividend stocks are one of the best sources of income you can find in the investment world. One sign of success for a dividend stock is its ability to increase its quarterly payout over time, and a select few stocks have put together track records with annual dividend hikes each year for 60 years or more. Let's take a look at these three dividend giants to see whether they deserve a place in your portfolio.
1. Dover Corp. (NYSE:DOV)
Dover is a manufacturer of equipment, components, and systems. It has four main divisions, including fluids, engineered systems, refrigeration and food equipment, and energy. The company celebrated its 60th straight year of boosting its dividend in 2015, with a 5% increase that now pays shareholders $0.42 per share every quarter. That works out to a yield of about 2.6% based on current prices.
Dover has gone through some tough times in 2015, as the decline in energy prices and macroeconomic weakness in key emerging markets have threatened its revenue growth. Nevertheless, the company has demonstrated its ability to get through difficult conditions in the past, and moves to take advantage of the current environment through strategic acquisitions should help bolster its long-term results once the business cycle starts to turn.
2. Northwest Natural Gas (NYSE:NWN)
Northwest Natural Gas, recently redubbed NW Natural, is a gas utility that serves the Pacific Northwest. Based in Oregon, the company has a 60-year track record of dividend increases, with its latest increase having come earlier this fall. The company tends to make small boosts, with the latest amounting to just 1%, but the $0.4675 per share quarterly dividend adds up to a yield of nearly 4%.
Those looking at Northwest Natural Gas right now might be troubled by a loss in its most recent quarter. Yet the results for gas utilities can be quite seasonal, and over the course of the year, NW Natural has remained consistently profitable. Investors need to keep an eye on the utility's relationship with its regulators after having a rate-recovery request disallowed, but even as natural gas prices have fallen, Northwest Natural Gas has continued to maintain a leadership role in its local market.
3. American States Water (NYSE:AWR)
Elsewhere in the utility realm, American States Water plays a key role in delivering water to a quarter of a million thirsty customers in California, as well as providing water systems at military installations across the nation. The company rewarded shareholders with a 5% dividend increase during the summer, and it now pays $0.224 per share to its investors on a quarterly basis. That works out to a yield of about 2.2%, and marked the 61st straight year of higher dividends.
California's drought has had a short-term impact on American States Water, with the company reporting lower rates of consumption among its customers. Yet that hasn't dramatically hurt its financials, where the utility has done a good job of cutting costs to keep profits stable. Looking forward, greater attention to water should only heighten American States Water's importance in the communities it serves.
There's no guarantee that something won't happen to these three stocks during the next few years that could put their dividend-increase streaks in jeopardy. For now, though, ACE, Stryker, and General Dynamics are poised to be the next to make the elite list of Dividend Aristocrats, and their past successes make them worthy candidates for smart dividend investors to consider.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.
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