15 Dow Stocks With Consistent Dividends

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 |  Includes: CVX, IBM, INTC, JNJ, KO, MCD, MMM, MSFT, PG, T, TRV, UTX, VZ, WMT, XOM
by: Insider Monkey

The stocks that have long records of increasing dividend payments can be very appealing for dividend investors because of their consistency. Some of these dividend growth stocks may have gone unnoticed by many investors recently, since these stocks have relatively low dividend yields due to larger increases in their prices over the last few years. We believe defensive stocks that are able to increase dividends are attractive options for conservative investors seeking consistency and some inflation protection.

We compiled a list of 15 Dow stocks that achieved consistent dividend growth over the last five year. The market data are sourced from Fidelity. Since 2006, all Dow companies in this list increased their dividend payments every year and their five year average dividend growth is 11.67% on average. Since the beginning of this year, the average return of these 15 stocks was -0.08% vs. -5.06% for the DJIA. Two stocks in this group– IBM and MCD – provided double digit returns in 2011.

AT&T Inc. (NYSE:T) is a leading telephone and television services provider. T has a high dividend yield of 6.25% but lost -2.20% since the beginning of this year. In the past 5 years, T increased its dividend payments annually by 5.28%. The stock has a market cap of $163.20B and P/E ratio of 8.37. Jim Simons, Cliff Asness, George Soros and D.E. Shaw are also among T investors (see billionaire Simons’ top stock picks).

Verizon Communications (NYSE:VZ) is a large telecommunications company operating worldwide. VZ has a 5.68% dividend yield and returned 2.38% since the beginning of this year. In the past 5 years, VZ increased its dividend payments annually by 4.30%. The stock has a market cap of $99.75B and P/E ratio of 15.73. Phil Gross' Adage Capital holds nearly $150 Million of VZ.

Intel Corp. (NASDAQ:INTC) is a global technology company that manufactures and supplies microprocessor products worldwide. INTC has a 4.26% dividend yield but lost -3.86% since the beginning of this year. In the past 5 years, INTC increased its dividend payments annually by 16.00%. The stock has a market cap of $103.44B and P/E ratio of 8.91. Paul Ruddock’s Lansdowne Partners has the largest INTC holding among the 300-plus funds we are tracking.

Johnson & Johnson (NYSE:JNJ) is a large company that provides consumer healthcare and pharmaceutical products worldwide. JNJ has a 3.58% dividend yield and returned 5.66% since the beginning of this year. In the past 5 years, JNJ increased its dividend payments annually by 8.73%. The stock has a market cap of $174.40B and P/E ratio of 15.22. Warren Buffett is the most prominent JNJ investor with a $2.8 billion worth position (check out Warren Buffett’s other massive holdings).

Travelers Company Inc. (NYSE:TRV) is a U.S. company providing insurance services. TRV has a 3.41% dividend yield and lost -11.72% since the beginning of this year. In the past 5 years, TRV increased its dividend payments annually by 9.54%. The stock has a market cap of $20.16B and P/E ratio of 9.44. Mason Hawkins’ Southeastern Asset Management had more than $800M in TRV at the end of June 2011.

Procter & Gamble (NYSE:PG) is a multinational company providing a wide variety of consumer goods worldwide. PG has a 3.40% dividend yield but lost -1.56% since the beginning of this year. In the past 5 years, PG increased its dividend payments annually by 11.11%. The stock has a market cap of $169.94B and P/E ratio of 15.74. Warren Buffett has the largest position in PG. Jim Simons, Ken Fisher, Bill Miller and D.E. Shaw also have large PG positions in their portfolios.

Chevron Corp. (NYSE:CVX) is a large U.S. energy company operating worldwide. CVX has a 3.28% dividend yield and gained 6.76% since the beginning of this year. In the past 5 years, CVX increased its dividend payments annually by 8.45%. The stock has a market cap of $190.66B and P/E ratio of 8.31. Phill Gross’ Adage Capital holds more than $300M of CVX.

McDonald’s Corp. (NYSE:MCD) is a large fast-food chain operating worldwide. MCD has a 2.87% dividend yield and returned 13.27% since the beginning of this year. In the past 5 years, MCD increased its dividend payments annually by 29.50%. The stock has a market cap of $87.73B and P/E ratio of 17.18. Jim Simons has the largest MCD position among the 300-plus funds we are tracking.

3M Co. (NYSE:MMM) is a large American conglomerate providing a wide range of diversified technology products worldwide. MMM has a 2.87% dividend yield and lost -9.51% since the beginning of this year. In the past 5 years MMM increased its dividend payments annually by 3.64%. The stock has a market cap of $54.39B and P/E ratio of 12.99. Jean-Marie Eveillard had more than $600 Million in MMM at the end of June 2011.

Wal-Mart Stores Inc. (NYSE:WMT) is a global company operating retail store chains worldwide. WMT has a 2.84% dividend yield but lost -2.76% since the beginning of this year. In the past 5 years, WMT increased its dividend payments annually by 16.86%. The stock has a market cap of $177.02B and P/E ratio of 11.59. Warren Buffett holds more than $2 Billion of WMT.

United Technologies Corp. (NYSE:UTX) is a large U.S. conglomerate providing aerospace technology products and related services worldwide. UTX has a 2.72% dividend yield and lost -8.85% since the beginning of this year. In the past 5 years, UTX increased its dividend payments annually by 12.62%. The stock has a market cap of $64.09B and P/E ratio of 13.64. Ken Fisher had more than $500 Million in UTX at the end of June 2011 (see billionaire Ken Fisher’s top stocks).

Coca Cola Co. (NYSE:KO) is one of the largest non-alcoholic beverages providers in the world. KO has a 2.71% dividend yield and returned 7.00% since the beginning of this year. In the past 5 years, KO increased its dividend payments annually by 8.68%. The stock has a market cap of $159.28B and P/E ratio of 12.94. Warren Buffett has the largest holding in KO.

Exxon Mobil Corp. (NYSE:XOM) is a giant U.S. company that manufactures and sells branded motor fuels and related products worldwide. XOM has a 2.65% dividend yield and returned -1.17% since the beginning of this year. In the past 5 years, XOM increased its dividend payments annually by 7.99%. The stock has a market cap of $345.26B and P/E ratio of 9.33. Phill Gross and Ken Fisher are large XOM holders with nearly $600 million worth positions.

Microsoft Corp. (NASDAQ:MSFT) is the largest provider of software products in the world. MSFT has a 2.49% dividend yield and lost -6.02% since the beginning of this year. In the past 5 years, MSFT increased its dividend payments annually by 12.20%. The stock has a market cap of $215.66B and P/E ratio of 9.57. Ken Fisher, Boykin Curry and Jean-Marie Eveillard are the most prominent MSFT investors.

IBM Corp. (NYSE:IBM) is a large technology and consulting company operating worldwide. IBM has a low dividend yield of 1.86% and gained 11.37% since the beginning of this year. In the past 5 years, IBM increased its dividend payments annually by 20.11%. The stock has a market cap of $192.72B and P/E ratio of 13.11. Bill Miller had $174 Million invested in IBM at the end of June (check out Bill Miller’s top stock picks).

Disclosure: I am long MSFT, T.