The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend. Often it can be boiled down to a simple question: "How committed is the company to paying its dividend?"
Sure most CEOs give lip-service to their commitment to shareholders, but what happens when times are hard? When the economy turns down and the future looks bleak, will the company hoard cash and stop its dividend or put action behind its words?
Question: What do all these have in common?
- Women gaining the right to vote in 1920
- The U.S. Depression in the 1930s
- World War I
- Charles Lindbergh’s transatlantic flight in 1927
- World War II
- Dropping the atomic bomb in 1945
- The Nazi Holocaust
- The Korean War in the 1950s
- The Russian Sputnik satellites in the 1950s
- The Vietnam War in the 1960s/1970s
- President Kennedy's assassination in 1963
- Civil Rights protests in the 1960s
- Landing a man on the moon in 1969
- The Watergate scandal in the 1970s
- The fall of the Berlin Wall in 1989
- The breakup of the Soviet Union in the 1990s
- The Persian Gulf War in 1991
- The impeachment of President Bill Clinton in 1998
Answer: They all occurred while several companies continued to pay their dividend, uninterrupted, year after year.
This week, I screened my Dividend Growth Stocks database for companies that have paid uninterrupted dividends for more than 100 years with a yield above 2.0%. The results are presented below:
Caterpillar Inc. (NYSE:CAT)
Yield: 2.8% | Dividend Paid Since: 1914
Caterpillar Inc. is the world's largest producer of earthmoving equipment, and a big maker of electric power generators and engines used in petroleum markets, and mining equipment.
Chevron Corporation (CVX)
Yield: 3.4% | Dividend Paid Since: 1912
Chevron Corporation is a global integrated oil company (formerly ChevronTexaco) has interests in exploration, production, refining and marketing and petrochemicals.
Norfolk Southern Corp. (NYSE:NSC)
Yield: 2.4% | Dividend Paid Since: 1901
Norfolk Southern Corp. operates 20,000 route miles serving 22 eastern states, the District of Columbia, and Ontario, Canada.
General Mills Inc. (NYSE:GIS)
Yield: 3.1% | Dividend Paid Since: 1898
General Mills Inc. is a major producer of packaged consumer food products, including cereal, yogurt and Betty Crocker desserts/baking mixes.
Colgate-Palmolive Company (NYSE:CL)
Yield: 2.2% | Dividend Paid Since: 1895
Colgate-Palmolive Company is a major consumer products company that markets oral, personal and household care and pet nutrition products in more than 200 countries and territories.
Coca-Cola Company (NYSE:KO)
Yield: 2.9% | Dividend Paid Since: 1893
The Coca-Cola Company is the world's largest soft drink company, KO also has a sizable fruit juice business.
Procter & Gamble (NYSE:PG)
Yield: 3.0% | Dividend Paid Since: 1891
The Procter & Gamble Company is a leading consumer products company markets household and personal care products in more than 180 countries.
Consolidated Edison Inc. (NYSE:ED)
Yield: 4.7% | Dividend Paid Since: 1885
Consolidated Edison Inc. is an electric and gas utility holding company serves parts of New York, New Jersey and Pennsylvania.
Exxon Mobil Corporation (NYSE:XOM)
Yield: 2.7% | Dividend Paid Since: 1882
Exxon Mobil Corp., formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company.
The York Water Co. (NASDAQ:YORW)
Yield: 2.8% | Dividend Paid Since: 1852
The York Water Co. impounds, purifies and distributes water in York County and Adams County, Pennsylvania.
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However, some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the more than 230 companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long NSC, KO, PG, ED, XOM in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.
- 7 Dividend Growth Stocks That Could Make You Wealthy
- 12 High-Yield Managed Distribution Policy Funds
- The 2013 Elite Dividend Stocks List
- 6 High-Yield Dividend Achievers With 25 Years of Increases
- Investments That Pay Monthly Dividends
- High Yield Dividend Stocks in Gurus' Portfolio
- Top dividend stocks of Warren Buffett
- Top dividend stocks of George Soros
About the author: