12 High Quality Stocks Raising Dividends For 20 Years Or More

|
 |  Includes: CB, CINF, CL, CLC, CLX, CMI, CNA, CTAS, DCI, GK, PG, PGR, TRV
by: Stock Croc

Let’s take a look at another the few companies that have been raising their dividends for more than 20 years. In this analysis I evaluate the most sustainable dividend payers and determine whether investors should buy them right now.

Chubb Corp. (NYSE:CB): The dividend has been increased for 46 consecutive years. The yield is 2.33% and the annual payout is $1.56. The quarterly payout was increased by 5.41% to $0.18 with the payout ratio at 25.16%. The growth rate over the last decade is 11.7%.

The stock is up about 9% for the year, trading at 10.4 times its trailing twelve months (ttm) earnings. It’s cheaper than The Travelers Companies (NYSE:TRV) at 13.8 and pricier than CNA Financial Corporation (NYSE:CNA) at 9.3 (ttm).

Earnings have taken a hit on large catastrophe claims. However, this company has solid franchises, prudent underwriting practices and a high quality balance sheet which should see it weather the storm in a better fashion than some of its peers. A good buy at the current valuation.

Cincinnati Financial (NASDAQ:CINF): The dividend has been increased for 51 consecutive years. The yield is 5.56% and the annual payout is $1.61. The quarterly payout was increased by 0.63% to $0.4025 with the payout ratio at 88.95%. The growth rate over the last decade is 9.0%.

The stock is down about 11% for the year, trading at a hefty 28.2 times its trailing twelve months (ttm) earnings, selling at a premium when compared to Progressive Corp (NYSE:PGR) at 11.06 (ttm).

As with Chubb Corp, Cincinnati Financial earnings also took a hit on weather related claims. Whilst the dividend yield is attractive, investors should note that there is high degree of risk attached to the execution of the company’s expansion efforts. The attractive dividend yield doesn’t justify the premium valuation. Investors should wait for Mr. Market to be depressed about this stock before buying.

Cintas Corp. (NASDAQ:CTAS): The dividend has been increased for 29 consecutive years. The yield is 1.81% and the dividend is paid annually at $0.54. The payout was increased by 10.2% with the payout ratio at 30.17%. The growth rate over the last decade is 9.9%.

The stock is up about 2.5% for the year, trading at 15.9 times its trailing twelve months (ttm) earnings, on par with G&K Services Inc. (GKSR).

The company has been performing well despite the soft economy. Earnings have beaten analyst estimates for the three reporting periods this year. Cost saving measures is one of the main catalysts for faster revenue growth in 2012. This should support a higher valuation multiple and a dividend hike. This is a good buy at the moment.

Clarcor Inc. (NYSE:CLC): The dividend has been increased for 47 consecutive years. The yield hovers around 1% and the annual payout is $0.48. The quarterly payout was increased by 14.3% to $0.12 with the payout ratio at 21.24%. The growth rate over the last decade is 5.6%. DRIP fees are not payable.

The stock is up about 6% for the year, trading at 20.08 times its trailing twelve months (ttm) earnings, selling at a hefty premium to Cummins (NYSE:CMI) at 10.5 (ttm) and roughly on par with Donaldson Company (NYSE:DCI) at 20.9 (ttm).

The earnings trend for fiscal 2011 has been solid, reflecting strong demand for the company’s products. Management is being realistic in their downward revision of fiscal 2012 earnings due to uncertainty in many global economies. The company is in good financial shape, which should support further dividend hikes and stock buybacks. A good buy at the current price.

Clorox Company (NYSE:CLX): The dividend has been increased for 34 consecutive years. The yield is 3.6% and the annual payout is $2.4. The quarterly payout was increased by 9.09% to $0.60 with the payout ratio at 59.5%. The growth rate over the last decade is 9.9%.

The stock is up about 2% for the year, trading at 18.5 times trailing twelve months (ttm) earnings, selling at a premium to Colgate-Palmolive (NYSE:CL) at 17.7 (ttm) and Procter & Gamble (NYSE:PG) at 15.6 (ttm).

Truth be told, it’s a good idea to consider in buying all three companies at the moment. They are fairly valued, offer solid dividend yields coupled with good earnings growth and will continue to raise their dividends at a higher rate than inflation. If you are lucky, Mr. Market should dish these stocks at better price in the coming weeks, snap them up if you can.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.