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Introduction

This is the second annual survey of most widely held stocks by dividend growth investors. Interest in the survey was enthusiastic, and individual investors shared a significant amount of information.

The list has grown from 39 stocks last year to 59 this year. Four stocks from last year's list were tossed out, while 24 new stocks were added. This year's list includes REITs, MLPs, and BDCs in addition to ordinary corporations. It also includes a few stocks that are probably not "dividend growth stocks" by most definitions. That's good, as most dividend growth investors are not rigid in their investing strategies.

Based on one reader's excellent suggestion, the results below are divided by sector. I used S&P's GICS (Global Industry Classification Standard) organization system:

Code

GICS Sector

10

Energy

15

Materials

20

Industrials

25

Consumer Discretionary

30

Consumer Staples

35

Healthcare

40

Financials

45

Information Technology

50

Telecommunication Services

55

Utilities

Without further ado, here is 2013's list.

Sector 10 - Energy

Company

Ticker

Industry

Yield %

Chevron

CVX

Integrated Oil & Gas

3.1

ConocoPhillips

COP

Oil & Gas E&P

4.6

ExxonMobil

XOM

Integrated Oil & Gas

2.6

Kinder Morgan

KMI

Oil & Gas Stor. & Trans.

3.8

Kinder Morgan Energy Partners.

KMP

Oil & Gas Stor. & Trans.

5.6

LinnCo

LNCO

Oil & Gas E&P

6.8

Phillips 66

PSX

Oil & Gas Refining & Marketing

2.0

Royal Dutch Shell

RDS.B

Integrated Oil & Gas

5.1

Sector 15 - Materials

Company

Ticker

Industry

Yield %

BHP Billiton

BBL

Diversified Metals & Mining

3.5

Sector 20 - Industrials

Company

Ticker

Industry

Yield %

3M

MMM

Industrial Conglomerates

2.4

Air Products & Chemicals

APD

Industrial Gases

3.3

Caterpillar

CAT

Construction & Farm Machinery & Heavy Trucks

2.5

CSX

CSX

Railroads

2.5

Emerson Electric

EMR

Electrical Components & Equipment

3.0

General Electric

GE

industrial Conglomerates

3.5

Leggett & Platt

LEG

Home Furnishings

3.5

Lockheed Martin

LMT

Aerospace & Defense

4.7

Norfolk Southern

NSC

Railroads

2.6

Raytheon

RTN

Aerospace & Defense

3.8

Sysco

SYY

Food Distributors

3.2

United Technologies

UTX

Aerospace & Defense

2.3

Waste Management

WM

Environmental & Facilities Services

3.8

Sector 25 - Consumer Discretionary

Company

Ticker

Industry

Yield %

Darden

DRI

Restaurants

4.0

Hasbro

HAS

Leisure products

3.4

McDonald's

MCD

Restaurants

3.1

Sector 30 - Consumer Staples

Company

Ticker

Industry

Yield %

Altria

MO

Tobacco

5.0

Clorox

CLX

Household Products

2.9

Coca-Cola

KO

Soft Drinks

2.6

Colgate-Palmolive

CL

Household Products

2.2

General Mills

GIS

Packaged Foods & Meats

3.0

Kimberly-Clark

KMB

Household Products

3.1

Kraft

KRFT

Packaged Foods & Meats

3.9

Lorillard

LO

Tobacco

5.3

PepsiCo

PEP

Soft Drinks

2.6

Phillip Morris

PM

Tobacco

3.6

Procter & Gamble

PG

Household Products

2.9

Walgreen

WAG

Drug Retail

2.2

Wal-Mart

WMT

Hypermarkets & Supercenters

2.4

Sector 35 - Healthcare

Company

Ticker

Industry

Yield %

Abbott Labs

ABT

Healthcare Equipment

1.5

AbbVie

ABBV

Pharmaceuticals

3.5

Becton Dickinson

BDX

Healthcare Equipment

2.1

Johnson & Johnson

JNJ

Pharmaceuticals

2.9

Medtronic

MDT

Healthcare Equipment

2.2

Pfizer

PFE

Pharmaceuticals

3.1

Sector 40 - Financials

Company

Ticker

Industry

Yield %

Aflac

AFL

Life & Health Insurance

2.8

American Capital Agency

AGNC

Mortgage REITs

15.3

Omega Healthcare investors

OHI

Specialized REITs

5.6

Realty Income

O

Retail REITs

4.4

Wells Fargo

WFC

Diversified Banks

2.7

Sector 45 - Information Technology

Company

Ticker

Industry

Yield %

Apple

AAPL

Computer Hardware

2.6

Automatic Data Processing

ADP

Data Processing & Outsourced Services

2.6

Intel

INTC

Semiconductors

3.9

Microsoft

MSFT

Systems Software

3.0

Paychex

PAYX

Data Processing & Outsourced Services

3.7

Sector 50 - Telecommunications Services

Company

Ticker

Industry

Yield %

AT&T

T

Integrated Telecomm. Services

4.6

BCE

BCE

Integrated Telecomm. Services

4.9

Verizon

VZ

Integrated Telecomm. Services

3.9

Vodafone

VOD

Wireless Telecomm. Services

5.0

Sector 55 - Utilities

Company

Ticker

Industry

Yield %

Southern

SO

Electric Utilities

4.2

Carryovers from Last Year

There were 39 stocks on last year's list. Thirty-five of them made it to this year's list. Most of them had a mixture of positive and negative responses this year, but a few stood out for receiving overwhelmingly positive responses:

  • AT&T
  • Coca-Cola
  • Intel
  • Johnson & Johnson
  • McDonald's

Removed from Last Year

Four stocks were removed due to overwhelming negative responses this year:

  • Chubb (CB)
  • Cincinnati Financial (CINF)
  • Exelon (EXC)
  • Target (TGT)

Additions This Year

In interpreting the mentions of new stocks this year, I focused on whether respondents made it clear that they actually owned them, as opposed to simply suggesting that they ought to be on this kind of a list. (I learned the necessity of doing that last year.)

A few of the new stocks stood out for receiving overwhelming positive responses:

  • ConocoPhillips
  • General Electric
  • Darden Restaurants
  • Norfolk Southern
  • General Mills
  • Omega Healthcare Investors
  • Realty Income

Last Ones Out

In tallying the results, I chose a cutoff such that no stock was just one mention short of making the list. However, a few were 2-3 mentions short, and so I thought that I would display them here, as these are clearly owned by many dividend growth investors.

  • Cisco (CSCO)
  • Enterprise Products Partners (EPD)
  • Genuine Parts (GPC)
  • Illinois Tool Works (ITW)
  • National Retail Properties (NNN)
  • Harris (HRS)
  • Avista (AVA)
  • Dynex Capital (DX)

The Fine Print

1. This is an unscientific survey. While I presented a starting list (from last year) for people to consider, the survey was deliberately open-ended:

  • Do you consider yourself a dividend growth investor?
  • If so, what stocks do you own?

Thus, participants selected themselves, and then they decided what to tell me.

Some investors probably censored themselves, in the sense that they did not report stocks that they did not think fit the definition of "dividend growth stocks." Nevertheless, a few stocks that might not meet most investor's definition still made it onto the list. Is Apple a dividend growth stock? Not by my precepts, but it just raised its dividend 15% yesterday, and I bought it recently for a "fun money" portion of my portfolio.

There is no official definition of what a "dividend growth stock" is, and obviously many people that consider themselves dividend growth investors (or primarily so) hold other stocks too. Many flavors of dividend growth investing exist. It is a big tent.

Bottom line, I believe that this is a very representative list, given the inherent vagueness of "dividend growth stock," dividend growth investor," and the self-selected nature of both respondents and what they told me. I think it is a better compilation than last year's of the stocks most commonly held by dividend growth investors.

2. Sources: Survey; F.A.S.T. Graphs (for yields and sub-industry classifications).

3. Appearance in this article does not mean that any stock is a great dividend growth investment. Dividend stocks-like any investment-should be matched to your own situation and goals. They are all subject to market risk, individual company risks, your own behavioral biases, possible management incompetence, failing business models, and other risks too numerous and scary to mention here. Past performance does not guarantee anything. Please do your own due diligence before investing in anything.

Source: Survey Says... These Are Dividend Growth Investors' Most Widely Held Stocks