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The S&P 500 (NYSEARCA:SPY) Dividend Aristocrats is an excellent source of ideas when looking for high yielding stocks. Only 8% have increased dividends annually for a minimum of 25 consecutive years to qualify for this group. Dividend Aristocrats are more impressive than in the past because each company has continued increasing dividends through the worst economic recession in decades. Of the 8 with yields above 3½%, 5 are industrial companies with good prospects. But each has problems requiring higher yields demanded by investors.

Pitney Bowes (NYSE:PBI), with a 5.7% yield, has one of the highest yields on the NYSE. High yields are rewards for a higher level or risk. I have a small position in PBI and watched it drift sideways for the last decade because of concerns that the mail business will not last over the long term. But PBI is a leader in supplying computer services to companies, expanding globally and offering new mail services. For example, PBI brought out pbSmartPostage in April to print shipping labels directly from a PC with an internet connection, eliminating the need to go to the post office for mailing materials (such as tax returns). Volly is a new secure digital delivery service (cloud-based digital mail communications platform) for consumers to receive and manage mail. The annual dividend was just raised 2¢ to $1.48, the 29th consecutive annual increase.

Leggett & Platt (NYSE:LEG) produces a wide range of engineered components and products found in homes, offices, automobiles and retail stores. In 2010 it completed the sale of the seventh divestiture. All 7 have generated $433 million in the last 3 years. LEG anticipates sales improvement from continued economic recovery. 2011 sales are projected at $3.4-3.6 billion and each $100 million of incremental sales could add at least 10¢ to EPS. Management uses 4 drivers of TSR (total shareholder return) to measure success: sales growth, margin improvement, dividends and stock buybacks. In recent times, dividends and stock buybacks have been the major drivers. The $1.08 dividend provides a 4.7% yield and will likely be raised 4¢ in early August.

Kimberley-Clark (NYSE:KMB) is a well known paper company organized into 4 divisions: Personal Care, Consumer Tissue, K-C Professional and Health Care. KMB guidance is for sales increase of 3-4% (2-3% organic sales) in 2011 but higher costs will hurt. Inflation for softwood pulp and oil-based materials is expected to raise costs $200-250 million. Expansion continues, capital spending should total $1 billion (in line with the long-term target of 4½-5½% of net sales). International business accounted for 47% of sales last year and that will grow in 2011. Adjusted EPS is guided at $4.90-5.05, 5-8% above $4.68 in 2010. The annual dividend was just raised to $2.80, providing a 4.3% yield.

Johnson & Johnson (NYSE:JNJ) has been going through a very rough period. Since 2007, sales have been flat, near $61 billion, held back by slipping and sliding US consumer business. Over the last 16 months the US consumer division has suffered from numerous product recalls. Last week, I saw the number was 22 and JNJ has estimated these have cost $1 billion in lost sales, not to mention confidence in the credibility of management. However this unusually strong company celebrated its 125th anniversary in 2010. Dividends have been increased annually for almost half a century and JNJ retains its coveted AAA credit rating. Last year sales in BRIC markets (Brazil, Russia, India and China) grew 14%, JNJ is investing to develop products for local consumption. 2010 sales in Latin America and Asia-Africa rose 10% to $16½ billion, but lower sales in the US and Europe caused total sales to slip 1%. In Q1 2011, total sales increased over $500 million from higher international sales. JNJ just raised 2011 EPS guidance to $4.90 - $5.00, the dividend increase for 2011 should be declared shortly. The stock currently yields 3.5%.

Abbott (NYSE:ABT) overcame challenges last year and reported a double digit sales increase (helped by acquisitions). Much of future growth will come from business in emerging markets. Emerging-market health care growth is expected to increase at 3 times the rate of developed markets. Nearly 25% of sales are in emerging markets and that will grow to more than one-third (of a larger volume) by 2015. International sales at ABT rose from $4.7 billion to $20 billion in the last 10 years. Last year, ABT acquired Solvay Pharmaceuticals, adding $2 billion in branded generic sales, and Piramal’s Healthcare Solutions, the largest pharmaceutical company in India. The annual dividend was just increased 16¢ to $1.92, offering a yield of 3.5%. After reporting 12% earnings growth in Q1 yesterday, ABT confirmed EPS guidance for 2011, reflecting double digit growth at the midpoint of the range.

Investments offering 3½% yields (or more) are a good way to start earning a targeted rate of return. Track records of raising dividends over the years (while other blue chip companies could not) show a commitment to bring rewards to shareholders. These 5 companies are investing overseas to provide greater earnings to extend dividend streaks. Higher yields bring added risks, smart investors can choose what is most appropriate for their own portfolios.

Disclosure: I am long PBI.