The U. S. Dividend Champions document—produced by frequent SA contributor David Fish—is rightly taking its place as the best compilation of stocks with long-term dividend-increase streaks. Its advantages over the better-known Dividend Aristocrats list from S&P are numerous: Its methodology is more thorough, its information is more comprehensive, it is not restricted to stocks on the S&P 500 index, it includes ADRs, and its rules are well explained and observed religiously. David’s “CCC” document—updated monthly—is a gift to all dividend investors. I thank him for graciously allowing me to produce occasional articles based on his work that provide snapshots from different angles.
The phrase “high yield” always seems to attract attention. Last July, I wrote an article on the 14 highest-yielding Dividend Champions—those with current yields of 5% or more. I believe that article has attracted more page views than any other I have published on SA. It’s time to update and improve the information. This time, I have extended the list to include Dividend Challengers and Contenders—companies with increase streaks of 10+ and 5+ years, respectively. The total universe of candidates numbers 447 according to the February 28 update of David’s document. Of those, 59 companies make the cut.
This list is ordered by yield (rounded to 1/10 of 1%), then by length of streak. It shows each company, its ticker, current yield, and years of consecutive increased payouts.
Yields > 7% (5 companies)
Vector Group (VGR) 9.5%, 13 years
PennantPark Investment (PNNT) 8.5, 5
StoneMor Partners (STON) 8.0, 7
Investors Real Estate (IRET) 7.4, 39
CenturyLink (CTL) 7.0, 37
Yields > 6.5% (5 companies)
Telefonica (TEF) 6.9, 8
Inergy (NRGY) 6.8, 10
Teekay LNG Partners (TGP) 6.6, 7
Getty Realty (GTY) 6.5, 11
National Presto Industries (NPK) 6.5, 8
Yields > 6.0% (15 companies)
Exterran Partners (EXLP) 6.4, 5
Targa Resources Partners (NGLS) 6.4, 5
Boardwalk Pipeline Partners (BWP) 6.3, 6
Omega Healthcare Investors (OHI) 6.2, 8
Reynolds American (RAI) 6.2, 7
AT&T (T) 6.1, 27
Universal Health Realty (UHT) 6.1, 22
Buckeye Partners (BPL) 6.1, 16
Kinder Morgan Energy Partners (KMP) 6.1, 15
NuStar Energy (NS) 6.1, 10
Natural Resource Partners (NRP) 6.1, 8
Transmontaigne Partners (TLP) 6.1, 7
Altria (MO) 6.0, 42
W.P. Carey (WPC) 6.0, 14
Senior Housing Properties (SNH) 6.0, 7
Yields > 5.5% (18 companies)
Pitney Bowes (PBI) 5.9, 29
National Retail Properties (NNN) 5.9, 21
Suburban Propane Partners (SPH) 5.9, 13
Plains All-American Pipelines (PAA) 5.9, 11
United Community Bancorp (UCBA) 5.9, 5
Mercury General (MCY) 5.8, 24
AmeriGas Partners (APU) 5.8, 6
DCP Midstream Partners (DPM) 5.8, 6
Cheviot Financial (CHEV) 5.7, 8
Holly Energy Partners (HEP) 5.7, 7
Crestwood Midstream Partners (CMLP) 5.7, 5
Washington REIT (WRE) 5.6, 39
Old Republic (ORI) 5.6, 30
TC Pipelines (TCLP) 5.5, 11
PPL (PPL) 5.5, 9
Duke Energy (DUK) 5.5, 6
ONEOK Partners (OKS) 5.5, 6
Spectra Energy (SEP) 5.5, 5
Yields > 5.0% (16 companies)
Enterprise Products Partners (EPD) 5.4, 14
Williams Partners (WPZ) 5.4, 7
Energy Transfer Equity (ETE) 5.4, 5
Sunoco Logistics Partners (SXL) 5.3, 10
Verizon Communications (VZ) 5.3, 6
TransAlta (TAC) 5.3, 5
Vectren (VVC) 5.2, 51
Hudson City Bancorp (HCBK) 5.2, 12
National Health Investors (NHI) 5.2, 10
NuStar GP Holdings (NSH) 5.2, 5
HCP (HCP) 5.1, 26
Urstadt Biddle Properties (UBA) 5.1, 17
DPL (DPL) 5.1, 6
Harleysville Savings (HARL) 5.0, 22
Magellan Midstream Partners (MMP) 5.0, 11
CenterPoint Energy (CNP) 5.0, 6
Do high yields and streaks of 5+ years make these the best dividend stocks out there? Not necessarily.
- 20 of the companies have increase streaks of 10 years or less. Some investors might feel that’s not long enough to establish that a company really has made increasing dividends a reliable part of its policy and culture.
- High-yielding stocks often have low dividend growth rates. Investors Real Estate Trust, for example, has a 7.4% current yield, but a 5-year dividend growth rate of only 1% annually. Old Republic’s last increase was just a little over 1%. Depending on your age and other factors, low or declining growth rates may diminish the desirability of such stocks in your eyes.
- A few stocks may have high yields because they are in declining industries with unlikely future growth. Some believe that Pitney Bowes, for example, is doomed.
- Many of these stocks are Master Limited Partnerships (MLPs). Most investors want industry diversification in their portfolios. Loading up on MLPs does not provide that.
The bottom line is to select stocks according to your goals, strategies, and individual standards for stock selection. As always, do your own due diligence before investing in anything.