11 Dividend Stocks with 55+ years of Payout Growth! ๐Ÿ“ˆ๐Ÿ’ธ

11 Dividend Stocks with 55+ years of Payout Growth! ๐Ÿ“ˆ๐Ÿ’ธ


There are only 11 dividend-paying stocks in
the S&P 500 that have 55 or more years of consecutive annual dividend growth. If you’re looking to invest in a solid dividend-payer,
this seems like as good a place as any to start your research. Let’s do it! Hey there! My name is Stephen Spicer and it’s my goal
to help you invest smarter. If you find free resources like this helpful,
then I hope you’ll subscribe and click that notification bell because I have a lot of
them in the pipeline, coming your way! Now, if you’re a dividend investor, you
know the importance of looking for a company with a good track record of payouts. But that’s only part of the equation. If you can find a company that also increases
its payout every year – that’s even better. That growth matters if you’re trying to
build at passive-income-producing portfolio that at least has a chance at keeping up with
inflation. So, you may have heard, then, about the Dividend
Aristocrats. And well, those are great ‘n all – and I’ll
put out a video soon helping you sift through that list of 57 stocks. But this list – that we’re about to go through
– is like the Dividend Aristocrats on steroids! These 11 stocks are going and they just won’t
stop! Clearly their management has made their income-reliant
shareholders a priority. So, the Aristocrats are S&P 500 companies
that have raised their dividend payout every year for at least 25 consecutive years. Dividend Kings have done so for 50 or more
years – there are 24 of those. But there are only 11 stocks in the entire
S&P 500 list of companies that have increased their dividend every year for at least the
last 55 YEARS. And that’s what I’ve pulled out for you
here. Now, real quick: I am actually also a registered
investment advisor. So it’s important to me that you understand
that these are not recommendations in any way. I don’t know your particular circumstances. I’m just going to point out some facts about
these companies and tell you why they’re interesting to me right now – and if they
seem interesting to you, you should definitely conduct your own research and analysis to
decide if they fit in your portfolio and make sense for you specifically. My goal with videos like this is to help you
identify different aspects of the research process and expose you to some different ideas
– so that if something piques your interest, it can be a good starting place for your own
deep dive. So, let’s get to it! First, I’m going to give you that list of
all 11. Then, I’ll show you a quick spreadsheet
I threw together that might help you as you kick off your own research – I’ll tell you
how you can get access to that. Finally, I’ll take you back through that
list providing you with some brief details about each of these companies – things that
jumped out at me as I begin to dig in, considerations you might want to keep in mind before your
analysis. Alright, so here they are… And if you follow me on Instagram you’ve
already seen this list, in fact, it was because of the feedback I received over there that
I decided to create the video as a resource for you – so, definitely go follow @spicercapital
so you can keep up with all the value I’m dropping over there as well. In at #11, with a current (as of this recording)
dividend yield of 2.8% after 55 consecutive annual increases, is Illinois Tool Works – ticker
ITW. #10, with a yield of 2.6% and 56 years of
growth, is Colgate-Palmolive – ticker CL. #9, also with a yield of 2.6% and 56 years
of growth, is Johnson & Johnson – ticker JNJ. #8, with a yield of 1.8% and 56 years of growth,
is Lowe’s – ticker LOW. #7, with a yield of 3.5% and 57 years of growth,
is Coca-Cola – ticker KO. #6, with a yield of 2.7% and 59 years of growth,
is a company called Cincinnati Financial – ticker CINF. #5, with a yield of 2.8% and 60 years of growth,
is 3M – ticker MMM. #4, with a yield of 3.0% and 62 years of growth,
is Emerson Electric – ticker EMR. #3, with a yield of 2.8% and 62 years of growth,
is Procter & Gamble – ticker PG. And finally the two at the top of this prestigious
list are tied with 63 years of dividend growth. There’s… #2, with a yield of 2.8%, Genuine Parts – ticker
GPC. And #1, with a yield of 2.1%, it’s a company
called Dover – ticker DOV. Now, any time I’m diving into a dividend
company I always start with the considerations I’ve put into my dividend checklist. If you don’t have a copy of that, just go
to SpicerCapital.com/DividendChecklist to request it. Again, this is not the end-all, be-all of
your research but it’s a great place to start – it can provide you with some quick
insights so you can know if the payer your looking into is worth more of your research
time or not. So, go get that if you haven’t already. From that, I took some of those metrics and
just quickly plugged them into a spreadsheet so I could compare some of these important
metrics – to a dividend payers long-term viability – side-by-side. It’s nothing fancy, but when I was done
with it, I thought, “hey some of you might appreciate this as a kick off point for your
research” so I made it public. Just remember, although some of this data
is actively processed and updated through Google Finance, many of the metrics are not. I just pulled them over from Simply Wall St
– link in the description – last week when I started this research and decided to throw
together this video. So, with that in mind, check it out if you
want. Make a copy of it once you’re in there. And then you can manipulate the fields and
add to it for your own research efforts. If you do appreciate stuff like this, I hope
you’ll take a second to hit that like button – let me know that it’s worth my time to
share these things with you in the future as well. Thank you! — Now, these companies are more than just a
dividend yield and some statistic about how long they’ve been raising their payout. They are SO much more than that. It’s important that you understand that
and conduct a thorough analysis before investing in any. Because, think about it, everyone can see
that these companies have this attractive track record. That makes them desirable. That fact alone will command a premium in
the market – meaning, investors are willing to pay more than the company might otherwise
be worth, just because of this fact alone. And you see that when you look at that when
you look at the average price-to-earnings ratio of this group as a whole compared to
the market – 26 versus 20. People are willing to pay more for this set
of stocks than others. And I get it, each of these companies would
clearly choose to increase its dividend in the future if at all possible. They would have so much to lose otherwise,
so it’s likely that you can count on them. BUT, if for whatever reason they just absolutely
CANNOT do that. What do you think would happen? Now, I know it’s not likely, but it happens. Stocks with super long track records have
to concede sometimes. And when they do, all that credibility and
faith premium that was baked into the stock’s price… evaporates overnight – it’s gone
– which can cause a huge gap down. So, although the probability of that is surely
pretty small – you should be prepared and intimately get to know any of these companies
in which you choose to invest. Alright, are you ready to dive just a little
deeper into each of these? Let’s do it… So, Illinois Tool Works, has a market cap
of around $47B and a PE ratio of around 19. It makes construction products, restaurant
equipment, car parts, and more, while operating in 57 countries. It also owns more than 17,000 patents. Most recently, they hiked their dividend by
28% – which is pretty incredible for a company that plans to do this every year. They also approved a $3B stock buyback program. Now, this company has seen its debt jump recently
over the last several years, so I’d keep an eye on that if I were you – their debt
is about 227% of their equity right now – which is pretty high. But many of the other numbers I like to look
at look reasonable – for example, their Earnings Before Interest and Taxes (their EBIT) covers
their interest expenses more than 16 times and they make enough profit to payout their
current dividend more than 2 times over, which is great. Now, I imagine you’re probably more familiar
with this next one, Colgate-Palmolive. The toothpaste, dish soap, deodorant and other
consumer staples mainstay. It’s market cap is around $58B with a PE
over 24. I’d be careful with this one. They’re having trouble with their overseas
operations, their debt is currently more than 3,000% what their equity is, and so to compensate
for these problems, their payout increases have been pretty small as of late. Most recently, just 2.4% and last year, just
5%. Next up, I know you’re familiar with this
health-care giant, Johnson & Johnson. A $369B market cap, with a PE of 25. Now, they do have their cancer-causing talcum
powder lawsuit going on – which definitely has the potential to cause waves in the stock’s
price in the years to come – but other than that, on the surface at least, JNJ looks pretty
solid. Its debt is only 51% of its equity. Its EBIT is more than 54 times what it owes
in interest – which is the highest of any company in this group of 11. And its operating cash flow is 73% of its
total debt – which is pretty outstanding – and the 2nd highest, by a pretty large margin
of those in this group. Next, we have the $86B home improvement giant,
Lowe’s, coming in with PE ratio of 26. Lowe’s has been growing like crazy recently. And so has its Dow rival, Home Depot. But Home Depot’s dividend increases only
date back to 2010, whereas, Lowe’s has been paying and increasing their dividend since
1961 – take that for what it’s worth. And their last increase at 17% wasn’t too
shabby either. Now, keep in mind, their debt is about 450%
of its equity – so, their growth story needs to continue playing out. Add to that, the fact that their dividend
yield is the lowest of all the companies on this list, it really seems like a lot of that
growth is already being priced in – so if there is some sort of hiccup, that could really
hurt. Now we have the highest yielding dividend-payer
of this group, Coca-cola, with its near $200B market cap and PE of 31. Now, Coke has had a lot of headwinds recently
with some cities even implementing a soda tax. They’ve tried to combat this by expanding
their beverage empire to include waters, juices, teas, sports drinks, and now even coffees,
with their recent acquisition of Costa Limited. It’ll be interesting to see how this all
shakes out for Coke over the long run. Their debt compared to equity is on the high
side and more concerningly, their cash flow is only 17% of their total debt – which is
the lowest of this group of 11 and the only one that is below my minimum threshold of
20%. This next one you may not have ever heard
of until this video. Cincinnati Financial is a $14B property and
casualty insurer with a PE ratio of 49 – the highest of this group. And while it seems to be responsibly managed
– with its debt only being 11% of the company’s equity and its annual operating cash flow
actually being more than its total debt altogether, at about 140% – my biggest concern would be
that the company had to pay out more than its income last year to satisfy its current
dividend commitments – so its payout ratio is currently hovering around pretty concerning
levels and happens to be the worst of the bunch. So you have both sides of the coin there… All things that I hope you’ll keep in mind
as you conduct your research. Let’s keep moving. 3M, the $119B industrial conglomerate has
a PE of 23. Their numbers are all right in the middle
of the pack – nothing too concerning that really stands out. They’ve recently had to lower their guidance
primarily do to concerns with China. But this is a company that has weathered many
storms – no guarantee for the future of course, but note-worthy. They’ve been paying a dividend for more
than 100 years and are one of only a few companies – 5 to be exact – that can boast 6 decades
of consistent increases. Next is the $41B industrial product maker,
Emerson Electric. It has a PE of 19. Emerson has been hurt as of late by the downturn
in the energy sector. So, it might be worth diving deeper into this
one if you think a significant energy recovery is around the corner. This one also comes in right in the middle
of the group – with nothing super concerning standing out – when comparing some of these
important dividend-sustainability metrics. I think it’s also important to note here
that Emerson has also been actively repurchasing shares, bringing the total value returned
to shareholders in 2018 up to $2.2B. Next on the list is Procter & Gamble. This $256B consumer-products behemoth boasts
22 brands that bring in at least $1B in annual revenues. The stock currently has a PE of 25. The company’s EBIT is about 52 times its
annual interest payment – that’s an extremely comfortable level to be at and is the second
highest in this group. Last year’s dividend hike announcement came
in April, so keep an eye out for its 63rd consecutive hike to come any day now! Genuine Parts, is probably better known for
its NAPA brand. It’s a $16B automotive and industrial replacement
parts maker. It has a PE ratio right now of 20. Now, despite a recent acquisition binge as
they dramatically expand their presence in Europe, their metrics are pretty consistent
with the averages for this group of 11. And it was earlier this year that they announced
their most recent dividend payout increase, which (for now) has tied them with the record
holder of most consecutive annual dividend increases. And that record-holder is… the $13B industrial
conglomerate Dover. It has a PE of 24. This company is involved in a lot of different
businesses, from gas pumps, to lifts, to grocery store refrigeration equipment, and more. Their last payout increase wasn’t anything
to write home about, at just 2%. But they do boast profits that are more than
twice what they payout in dividends each year – which ties them for the best payout ratio
among these 11 stocks – so a 64th consecutive increase is likely in the cards for this summer. — So there you have it: some additional color
on each of these impressive dividend payers including a side-by-side comparison of some
of the most important metrics I like to consider. If you want to play around with this spreadsheet,
remember the link is in the description for you. And if you want the Dividend Checklist – well,
there’s a link for that as well! If you appreciate these resources and this
video, don’t forget to hit that like button and let me know in the comments. Remember: none of this is meant as a recommendation
– it’s all to help you learn to research and analyze stocks on your own to help you
invest smarter. If you’d like more of that don’t forget
to subscribe and click the bell. I sincerely hope these resources help! I wish you all the best. Take care.

42 thoughts on “11 Dividend Stocks with 55+ years of Payout Growth! ๐Ÿ“ˆ๐Ÿ’ธ

  1. ๐Ÿ™Œ๐Ÿผ Hey there, Spicer Capital Community! Over on Instagram you asked for this video. I sincerely hope it helps you in your research!

    ๐Ÿ‘‰๐Ÿผ Of these 11, which one is your favorite? Letโ€™s talk about it in the COMMENTS! ๐Ÿ‘‡๐Ÿผ๐Ÿ‘‡๐Ÿผ๐Ÿ‘‡๐Ÿผ

  2. Good stuff Stephen… For better or worse, I only own two on the list. Those being JNJ and LOW, both of which I've owned for over a decade now. Both are oversized positions in my portfolio, so they've been trimmed a bit over the past couple years, JNJ by about 20% and LOW by about 50%. Will likely trim LOW further this year as it's my single largest holding (again) and its getting a bit rich IMO. While I like LOW, I have a hard time justifying it as my single largest stock holding, but cost basis in the mid-teens makes it hard to cut bait (love that YoC). I do consider both core positions at this point and expect to have positions in both for the long term. I've owned MMM and PG in the past, but currently no position in either.

    BTW… I never invest in a company based on their dividend alone. I focus on things like strong profitability metrics, balance sheet, positive trending moat and if a dividend payer, one that's sustainable with a consistent history of increases (like those you mentioned). Additionally, I couldn't care less about current dividend, just focused on where I think the company, stock and dividend will be a decade or more from now. Cheers my friend…

  3. You can write books on these companies.

    First of all put on some lights in the video.

    Of all these companies I only own KO, and I'm on the fence to, either keep them or sell them. Too high of a PE and also a lot of headwinds. Taking a profit or keep riding the dividend train.

    Think you might be the second channel I follow that talks about ITW. Really like the company. One of the few companies I might actually have a blind spot for. Another one is Dover. In the Aristocrat field Roper and Archer Daniels Midland. Don't own any of these yet.

    The channel Sure Dividends do a standard analyses of all the aristocrats on their channel. They check some other numbers like dividend to EPS, dividend to free cashflow, EPS in the recession and dividend in the debt matrix (They use free cashflow and an interest rate to see how much an interest rate needs to rise before free cashflow doesn't cover the dividend anymore). I have asked them to share more information on these video's and they will look into them. The seemed positive about that.

    These kind of companies need a lot more spotlight. So I will be a big fan of these types of video's. You might actually get all the way back to dividend achievers if you like (10+ years of dividend growth). Some of the achievers might become dividend kings. Wouldn't it be awesome if you picked these up when the were an achiever?

  4. Very good overview. I own 3 out of the 11 and there are 2 more I'd love to pick up whenever their prices come into a reasonable range. Unfortunately these dont go on "sale" very often.

  5. Great research Stephen, I never knew there were 11 dividend kings. Always learning something new from your channel. Thank you

  6. very complete information! I'm not really into dividends, because as a foreign investor, USA cuts the 30% of my dividend earnings, but still, great video! ๐Ÿ˜„

  7. I'd love to buy PG but it's run up too much. I missed buying it Q4 2018, but I'm watching and will snap some up if there is another correction

  8. Berkshire Hathaway doesnt pay a dividend because it believes it can compound the retained earnings better. Also it avoids taxes. Thats a winning formula

  9. What about the dividend champions that arenโ€™t aristocrats like America States Water who arenโ€™t in the S&P 500 but have raised their dividends every year for 64 years. Why exclude these types of companies just because they arenโ€™t in the S&P 500. I personally actually almost prefer them since they arenโ€™t being swayed by VOO.

  10. I would find it helpful if you also discuss the competitive advantage of dividend growers in your videos. As a dividend growth investor my investment time horizon is longer so I like to target companies that have a competitive advantage. To give you an example I recently bought a stock that is a natural monopoly. Its business model is to collect revenue from charging tariffs to end users for the transportation of electricity. As a natural monopoly It is able to increase its prices every year without competition issues.

    In summary I would like to know why the business has been able to defy typical business cycles for so long. Your "Protecting your portfolio during market crash" and "dividend" videos are my favourite topics you have uploaded. Keep it up!

  11. Here is a question that ive asks a bunch of channels. Which has the best potential for the largest number growth dividend portfolio fairly conservative vs a VTSAX portfolio. What does the history tell us.

  12. If there are just 11 companies why not to buy simply all of them. And you do not have to think about them much.

  13. it's a shame this video only has ~4k views and your channel ~9.5k subscribers. We have a real problem with financial literacy. A significant percentage of issues (and subsequent complaints) stemming from income inequality could be mitigated by investing in ways described in this video and others. Even a few dollars a week would make a difference over time.

  14. Really awesome video. I have all these companies on my cash flow challenge portfolio watch list. I will be checking out the spreadsheet

  15. I'm just starting out with this and trying to understand. When people say "57 consecutive years of growth", are you guys saying the company's shares have been growing each year with the same dividend yield, or has the dividends they pay to their investors increase each year? I'm not quite clear if the growth means the yield increases for the investors or if the yield remains stagnant and the company's net worth increases.

Leave a Reply

Your email address will not be published. Required fields are marked *