Seeking Alpha
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

Defensive investors love high dividend yielding stocks and consider them as viable options in especially loose monetary environments. We expect high dividend stocks to outperform the 10-year treasuries over the next 10 years.

On the other hand, high dividend yields are not the only important criteria to be sought in defensive stocks. Investors also look for long records of dividend payments in each high dividend yielding stock. We think the stocks that were able to increase dividends are attractive options for conservative investors that demand consistency and some inflation protection.

We compiled a list of U.S. services stocks that achieved consistent dividend growth and paid high current dividend yield. The market data are sourced from Fidelity. All companies in this list increased their dividend payments every year since 2005. These stocks have market capitalization above $1 billion and 12-month dividend yield of at least 3%.

Dividend Yield

5-Year Average Div. Growth

52-Week Return

Teekay LNG Partners

TGP

7.15%

10,06%

31,06%

Shaw Communications

SJR

4.37%

27,79%

17,14%

Healthcare Services Group

HCSG

3.90%

26,36%

22,04%

Watsco Inc.

WSO

3.63%

17,92%

8,66%

Genuine Parts Co.

GPC

3.48%

5,92%

32,45%

Meredith Corp.

MDP

3.41%

9,77%

-10,96%

Sysco Corporation

SYY

3.34%

8,87%

6,83%

Mc Donalds Corp.

MCD

3.03%

29,50%

22,42%

AVERAGE

17,02%

16,21%

Since 2005, these 8 U.S. Services stocks have increased their cash dividends every year and their 5 year average dividend growth is 17.02% on average. In the last 52-week period, the average return of these 8 stocks was 16.21%. Only MDP in this group had a loss in the past 12 months, whereas 6 stocks – TGP, SJR, HCSG, GPC, MCD - provided double digit returns in the same period.

8 Services stocks with consistent dividend growth are as follows:

1. Teekay LNG Partners: Teekay LNG Partners is a U.S. company providing energy transportation services worldwide. TGP has a high dividend yield of 7.15% and returned 31.06% during the past 12 months. In the past 5 years, TGP increased its dividend payments annually by 10.06%. The stock has a market cap of $2.07B and P/E ratio of 23.80.

2. Shaw Communications: Shaw Communications is a telecommunications company providing TV, internet and telephone services in the United States and Canada. SJR has a 4.37% dividend yield and returned 17.14% during the past 12 months. In the past 5 years, SJR increased its dividend payments 27.79% on average. The stock has a market cap of $8.26B and P/E ratio of 19.73.

3. Healthcare Services Group: Healthcare Services Group is a U.S. company providing housekeeping, laundry and facility maintenance services to the Healthcare industry. HCSG has a 3.90% dividend yield and returned 22.04% during the past 12 months. In the past 5 years, HCSG increased its dividend payments 26.36% on average. The stock has a market cap of $1.07B and P/E ratio of 30.32. Chuck Royce, Ken Griffin, Jim Simons, and Israel Englander had HCSG positions in their portfolios at the end of March.

4. Watsco Inc.: Watsco Inc. is a U.S. company distributing heating, air-conditioning and refrigeration equipments. WSO has a 3.63% dividend yield and returned 8.66% during the past 12 months. In the past 5 years, WSO increased its dividend payments 17.92% on average. The stock has a market cap of $1.77B and P/E ratio of 24.42. Jason Capello’s Merchants’ Gate Capital and Chuck Royce’s Royce & Associates hold the largest positions of WSO.

5. Genuine Parts Co.: Genuine Parts Co. is a U.S. company providing automotive and industrial replacement parts in U.S., Canada and Mexico. GPC has a 3.48% dividend yield and returned 32.45% during the past 12 months. In the past 5 years, GPC increased its dividend payments 5.92% on average. The stock has a market cap of $8.13B and P/E ratio of 16.35. Phill Gross’ Adage Capital and Ray Dalio’s Bridgewater Associates are among GPC investors.

6. Meredith Corp.: Meredith Corp. is a media conglomerate operating in publishing, TV broadcasting and interactive media businesses. MDP has a 3.41% dividend yield but lost 10.96% during the past 12 months. In the past 5 years, MDP increased its dividend payments 9.77% on average. The stock has a market cap of $1.10B and P/E ratio of 10.52. Both John W. Rogers’ Ariel Investments and Robert Joseph Caruso’s Select Equity had more than $70 Million in MDP.

7. Sysco Corporation: Sysco Corporation is a U.S. company operating in food services industry in the United States. SYY has a 3.34% dividend yield and returned 6.83% during the past 12 months. In the past 5 years, SYY increased its dividend payments 6.83% on average. The stock has a market cap of $18.16B and P/E ratio of 15.88. Jean-Marie Eveillard’s First Eagle holds more than $400M of SYY. Ric Dillon’s Diamond Hill and Generation Investment Management are also among SYY investors.

8. McDonalds Corp.: McDonalds Corp. is a large fast-food restaurant chain operating worldwide. MCD has a 3.03% dividend yield and returned 22.42% during the past 12 months. In the past 5 years, MCD increased its dividend payments 29.50% on average. The stock has a market cap of $83.57B and P/E ratio of 17.03. Peter J. Eichler, James Crichton, Ric Dillon and Jim Simons hold the largest MCD positions among 300+ hedge funds we track.

Source: 8 Dividend Monsters With Consistent Dividend Growth