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By Ross Bernstein

This article examines companies which have raised their dividends for more than 25 consecutive years.

Becton Dickinson & Co (NYSE:BDX): The dividend has been raised for 38 consecutive years. The current yield is 2.2% and the annual dividend stands at $1.64. The quarterly payout has been raised by 10.8%, the highest on this list, to $0.41 though the payout ratio is low at 27.56%. The dividend growth rate over last decade is at a healthy 14.9%.

The stock is down about 12% for the year, trading at 13.2 times its trailing twelve months (ttm) earnings, much cheaper than Abbott Laboratories (NYSE:ABT) at 18.5 (ttm).

The company is having a tough time with current market conditions. Third quarter results show that whilst revenue has grown, operating costs have soared and management has indicated 1% to 3% growth for 2012.

Whilst Becton Dickinson is valued cheaper than Abbott Labs, the latter is a better bet on those seeking exposure in the healthcare products industry. Abbott’s dividend is higher at 3.5% and is positioned for better growth in 2012 as detailed in the first article in this series.

Bemis Company (NYSE:BMS): The dividend has been raised for 28 consecutive years. The yield is currently 3.4% and the annual dividend is $0.96. The quarterly dividend is up 4.35% to $0.24 with the payout ratio at 48.2%. The dividend growth rate over last decade is 6.7%.

The stock is down about 14% for the year, trading at a trailing twelve months (ttm) multiple of 14.07. It’s cheap compared to Amcor Ltd (OTCPK:AMCRY) at 24.5 (ttm), whilst pricier than Avery Dennison Corporation (NYSE:AVY) at 9.8 (ttm).

The numbers are not rosy for Bemis as it battles soft consumer demand. Management has slashed its fourth quarter guidance. To counter this, reductions in workforce and plant closings should help in containing costs which will help earnings for 2012.

Investors should wait for 2012 first quarter results to come out before committing funds. You should have a better indication on management’s efforts in boosting earnings.

Black Hills Corp (NYSE:BKH): The dividend has been raised for 41 years consecutive years, the highest on this list. The yield is currently 4.3% and the annual dividend is $1.46. The quarterly dividend is up 1.4% to $0.365 with the payout ratio at 71.2%. The dividend growth rate over last decade is at a paltry 2.9%.

The stock is about 8% up for the year, trading at a pricey 22.07 times its trailing twelve months (ttm) earnings. IdaCorp (NYSE:IDA) and Questar Corporation (NYSE:STR) are cheaper, trading at 11.2 (ttm) and 16.3 (ttm) respectively.

Whilst management believes earnings will be boosted next year on successful completion of major projects, the current valuation is a little pricey considering management has only reaffirmed next year’s earnings.

Investors should wait for a market correction before committing to this stock.

Bowl America Class A (NYSEMKT:BWL.A): The dividend has been raised by 39 consecutive years. The yield is 5.06%, the highest on this list though the annual dividend is lowest on this list at $0.64. The quarterly dividend was hiked 3.23% to $0.16 with the payout ratio at 213.33%. The dividend growth rate over the last decade is 4.2%.

The stock is up 3% for the year, trading at an eye watering 42.7 times its trailing twelve months (ttm) earnings. It has displayed good stability; its 52 week range is $12 to $13.63.

Whilst the yield is attractive, some investors will balk at the hefty valuation. No matter how rosy the future may look, investors should not be paying such a high price for future growth. Buying a stock only for its dividend yield is asking for trouble.

Brady Corp (NYSE:BRC): The dividend has been increased for 26 consecutive years. The yield is 2.4% and the annual dividend is $0.74. The quarterly dividend was hiked 2.8% to $0.185 and the payout ratio is 36.1%. The dividend growth rate over the last decade is 7.4%.

The stock is down about 6% for the year, trading at 14.8 times its trailing twelve months (ttm) earnings, pricier than 3M Corporation (NYSE:MMM) at 13.7 and Avery Dennison Corporation (AVY) at 9.87.

It has been a bit volatile recently. The best time to have bought this stock was its recent downgrade which resulted in it taking about a 10% hit on worries about its 2012 prospects. The stock then jumped nearly 11% when its fiscal 2012 first quarter results beat Wall Street expectations.

The stock is trading at 13.1 times the low end earnings estimate of $2.30 for 2012. There is some upside potential here which largely depends on how well management can handle the setbacks caused by the floods in Thailand and uncertainty in the global economy. The stock is suitable for investors who can stomach a bit of volatility.

Source: 10 Stocks That Have Raised Dividends For 25 Years Or More: Part 1