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15 Ways to Invest Royally and Reap Dividends

By Marc Rapport - Aug 31, 2022 at 7:00AM
Golden crown resting on piles of cash.

15 Ways to Invest Royally and Reap Dividends

Decades of dividend increases make these companies stock market nobility

There is a lot to like about investing in the stock market, beginning with the fact that it's been a reliable builder of wealth for millions of Americans for generations, far more so than simply putting your savings in a savings account.

Plus, you don't have to settle for simply putting your money into stocks, waiting for their share price to grow, and then selling to reap the profits. Stocks that pay dividends not only tend to outperform the greater market over time but also provide a flow of passive income that greatly boosts the total return from your investment if you reinvest the dividends and enjoy the magic of compounding.

A great place to look for reliable dividend payers is among the royalty: Dividend Aristocrats and Dividend Kings. These are companies that have raised their dividends at least once annually for 25 and 50 years, respectively.

There are about 6,300 stocks on the Nasdaq Stock Market and New York Stock Exchange combined. Of them, about 40% are currently paying dividends. And of that group, there are 65 Dividend Aristocrats; 44 of those are also Dividend Kings.

Here is a look at 15 of them that could help build your nest egg now and for years to come.

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Person drinking from a kitchen faucet.

1. American States Water

American States Water (NYSE: AWR) is the king of kings, at least when it comes to annual dividend increases. This supplier of water to more than 250,000 customers in 10 California counties also supplies electricity to another 25,000 customers in the mountain communities of San Bernardino County.

American States Water has been in business since 1929 and has raised its dividend for 67 straight years -- good for an annual dividend of $1.59 per share and a 1.8% yield at a share price of about $89.

ALSO READ: Investing in Water Stocks

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A riverside power plant.

2. Consolidated Edison

Consolidated Edison (NYSE: ED) has raised its dividend for 48 straight years, making it an aristocrat but not quite a king by that measure. However, this is the oldest continuously trading stock on the market, dating to its predecessor New York Gas Light Company in 1823.

Con Ed provides electricity, gas, and steam to about 10 million people in and around New York City. This big utility is paying a quarterly dividend of $0.79 that at about $101 a share is yielding around 3.2%.

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A person writing the word Dividends.

3. Realty Income

Realty Income (NYSE: O) is one of the best-known income stocks in the market, having paid a monthly dividend without fail for more than 50 years.

This real estate investment trust (REIT) owns and rents out more than 11,000 retail properties across the country and overseas and has raised its dividend for 28 straight years.

ALSO READ: Real Estate Investment Trusts: What They Are and How to Invest in Them

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A modern Target store.

4. Target

One of the more recognizable names on this list, Target (NYSE: TGT) has raised its dividend for 50 straight years, earning it Dividend King status after years as "just" a Dividend Aristocrat. The retail giant currently pays quarterly dividends totaling $4.32 a year, and its yield of 2.4% comes from a share price that's now bouncing around $172.

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Sherwin-Williams logo and slogan.

5. Sherwin-Williams

Sherwin-Williams (NYSE: SHW) is another household name among Dividend Aristocrats, with a record of 44 straight years of dividend increases that help paint a pretty picture for long-term investors in this stalwart of the materials manufacturing sector.

The stock is currently yielding a paltry 0.9% or so, but it comes with a 20-year record of beating the benchmark S&P 500 by five times in total return.

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Rows of Hormel Spam.

6. Hormel Foods

Hormel Foods (NYSE: HRL), the maker of that iconic canned meat Spam, has seen its stock double the S&P 500 in total return in the past 20 years, and it has raised its dividend for 56 straight years. This Dividend King is paying out $0.26 quarterly, and at a share price of about $51, is producing a yield of approximately 2%.

ALSO READ: Hormel Foods: What Nobody Talks About

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Cigarettes on top of loose tobacco.

7. Altria Group

Altria Group (NYSE: MO) is a Dividend King with 52 years of annual payout increases. It also rules this list with a current yield of nearly 8% from a share price of about $45 and an annualized dividend of $3.60 per share. Altria Group, formerly known as Philip Morris, is one of the world's major producers and marketers of tobacco products.

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An electrical grid next to three wind turbines at sunset.

8. NextEra Energy

The parent company of 11 million-customer Florida Power & Light, NextEra Energy (NYSE: NEE) also is a major investor in renewable energy, including wind, solar, and battery storage projects.

NextEra is a Dividend Aristocrat, with 28 consecutive years of dividend increases that have boosted the quarterly payout to almost $0.43 a share. That makes a yield of about 1.9% at a share price of around $90.

ALSO READ: Where Will NextEra Energy Be in 3 Years?

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IBM mainframe computer.

9. International Business Machines

This dividend machine is a blue chip also known as Big Blue. International Business Machines (NYSE: IBM) has raised its payout for 28 straight years, giving it Dividend Aristocrat status.

The computer services and hardware giant also is one of the more venerable companies on this list, dating back to 1911 as a maker of commercial scales, tabulators, and even cheese and meat slicers.

IBM shares are currently selling for around $139 a share and yielding about 4.8% with a quarterly payout of $1.65 per share.

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Procter & Gamble brand products.

10. Procter & Gamble

Procter & Gamble (NYSE: PG) was founded in 1837 and is still based in Cincinnati, but now it's a global provider of packaged consumer goods such as Bounty, Tide, Vicks, and Pampers.

A dividend hike of a little more than $0.04 earlier this year preserved a record of 66 consecutive years of payout bumps for this Dividend King. P&G stock is currently yielding about 2.4% at a share price of around $150 and an annual dividend of $3.65.

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A Federal Realty mall.

11. Federal Realty Investment Trust

Federal Realty Investment Trust (NYSE: FRT) has the distinction of being the only REIT on the list of Dividend Kings. It makes its money -- and pays its $4.28 in annual dividends -- from a collection of just over 100 mixed-use open-air shopping centers in several upscale markets around the country. Federal Realty has raised its payout for 54 straight years and is now yielding approximately 3.8% at a share price of about $112.

ALSO READ: 1 Dividend King to Hold Until You're Blue in the Face

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Construction worker using a Stanley Fatmax tape measure on the job.

12. Stanley Black & Decker

This manufacturer of familiar brand names in consumer and industrial tools is a Dividend King with 54 straight years of payout increases. Stanley Black & Decker (NYSE: SWK) stock has been selling for around $102 a share. The company raised its quarterly payout by a penny earlier this year to $0.80 a share, good for a current yield of about 3%.

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Person standing in front of large rolls of steel.

13. Nucor

Nucor (NYSE: NUE) joined the Dividend Kings list last year when America's largest steelmaker raised its dividend by nearly a dime to $0.50 a share. That's good for a yield of about 1.4% at a share price of about $143.

ALSO READ: What Nucor's String of Acquisitions Means for Investors

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Caterpillar bulldozer leveling the ground.

14. Caterpillar

Even if you don't recognize its name, you probably do the familiar Hi-Way Yellow shade of paint that has adorned Caterpillar (NYSE: CAT) machinery since 1931.

This maker of construction and mining equipment -- and that's just for starters -- has more than doubled the S&P 500 in total return in the past two decades and has raised its dividend for 29 straight years.

A Dividend Aristocrat, Cat currently pays $4.80 per share per year, and its stock yields 2.4% at a share price of about $197.

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Lowe's employee helping a customer.

15. Lowe's

Last but not least, we have another household-name company, Lowe's (NYSE: LOW). The company has more than 2,000 home-improvement stores, and its status as an essential business helped it weather the pandemic better than most retailers. Lowe's is a Dividend King with 49 years of bumps, including a robust jump of 31% to $1.05 a share earlier this year, which now has the yield at just under 2% at a share price of about $216.

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We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

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Two people dressed as aristocrats might have dressed 100 or more years ago and having tea and smiling.

Improve your investment odds by hanging out with stock market nobility

Past performance is no guarantee of future performance, but these companies must be doing something right. Each has a long record of financial success, and all have shown their determination to pay their shareholders well along the way. There are certainly sexier, more speculative ways to invest than in these blue chip income stocks, but few are more reliable in the realm of public equities.

Marc Rapport has positions in Realty Income. The Motley Fool has positions in and recommends NextEra Energy and Target. The Motley Fool recommends Lowe's and Sherwin-Williams. The Motley Fool has a disclosure policy.

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