When it comes to investing in dividend stocks, the only thing that matters as much as the dividend yield is the dividend growth rate. The dividend growth rate tells you what the company has been doing with their dividend and gives you an indication of where the stock may be headed in the future. Dividend growth drives yields higher which can often drive stock prices higher. A positive dividend growth also helps put a bottom in a stock price.
Only companies that increase their revenue and net income consistently year over year are able to raise their dividend for 40 or more consecutive years. Dividends4life recently covered the dividend stocks that have been raising dividends for 50 years, so we’ve exclude those from our list here. Where are left with 6 dividend paying stocks that have raised their dividend for 40 to 50 years.
Chubb Corp (CB) is an insurance company that operates in three business units, which include personal insurance (home, auto, possessions), specialty insurance (misc.) and commercial insurance (workers comp, casualty, property).
CB has a dividend yield of 2.3% and a 5 year dividend growth rate of 9.8%. It has raised its dividend for 46 consecutive years and has a payout ratio of just 25%.
Hormel Foods (HRL) is an international food company that produces a wide range of meat and other food products. Their products fall into 5 segments, which include grocery, refrigerated foods, Jennie-O Turkey Store, specialty and miscellaneous products.
HRL has a low dividend yield of 1.7% and a 5 year dividend growth rate of 13%. It has been raising its dividend for 44 years and havs a low payout ratio of 28%. HRL has a 5 year dividend yield average of 2%.
Lowe’s Companies (LOW) is in the home improvement business. Chances are that you either have a Lowe’s or Home Depot somewhere close to your home, or maybe both. Lowe’s has over 1,700 stores, most of which are in the United States. They also have about 20 stores in Canada and 2 stores in Mexico.
Lowe’s has a dividend yield of 2.1% and a 5 year dividend growth rate of 26.9%. It has been raising its dividend for 49 years and currently has a payout ratio of 33%.
Coca-Cola Company (KO) is an International beverage company that owns and licenses over 500 non alcoholic beverage brands. Aside from their soda brands, they also own a number of still water brands that include water, tea and sport drink brands.
The Coca-Cola Company just missed making our mega cap stocks with the highest dividend growth list, but not by much. KO has a dividend yield of 2.7% and a 5 year dividend growth rate of 8.8%. It has been raising its dividend for 48 years and has a low payout ratio of 34%.
Johnson & Johnson (JNJ) develops and sells health care related products through their 250 International companies. They operate in three business segments which include consumer, pharmaceutical and medical devices.
JNJ has a dividend yield of 3.5% and has a dividend growth rate of 9.5%. It has been raising its dividend for 48 years and has a payout ratio of 54%.
Stanley Black & Decker's (SWK) products fall into three categories: Industrial, security and do-it-yourself construction. They manufacture hand tools, power tools, home and garden products for their DIY operations. Their security operation offers security solutions for consumers and commercial customers. The industrial segment of their business manufactures storage systems, professional tools and specialty tools.
SWK has a dividend yield of 2.5% and a 5 year dividend growth rate of 6.2%. It has been raising its dividend for 43 consecutive years and has a payout ratio of 42%. They have been paying dividends since 1877.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.