5 Companies Raising Their Dividend Yields For Over 30 Years

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 |  Includes: CBSH, CL, CTBI, CTWS, KO
by: Stock Croc

In today’s low interest environment, savers are losers. If you have cash stashed somewhere, consider putting your money to work in the companies below. Their dividend yields are much higher than the major banks, which as an industry yield under 2%, and what the bankrupt federal government can offer through treasuries, at 2%.

All companies in this value analysis have been raising their dividends for over 30 years.

Coca-Cola Company (NYSE:KO): The dividend has been increased for 49 consecutive years. The yield is 2.8% and the annual payout is $1.88. The quarterly payout was increased by 6.82% to $0.47 with the payout ratio at 34.56%. The growth rate over the last decade is 10%.

The stock is almost even for the year, trading at trailing price/earnings multiple of 11.9. It’s selling at a discount when compared to rivals PepsiCo (NYSE:PEP) at 15.6 (ttm) and Dr Pepper Snapple Group (NYSE:DPS) at 14.1 (ttm).

At the current valuation, this giant is a definite buy. Despite the weak global economy, thirst for its brands won’t stop, particularly on the international front. The company should post at least a 30% rise in full year earnings due in part to international growth as shown by recent results. Its strong free cash flow should support further dividend hikes and stock buybacks.

Colgate-Palmolive Company (NYSE:CL): The dividend has been increased for 48 consecutive years. The yield is 2.57% and the annual payout is $2.32. The quarterly payout was increased by 9.43% to $0.58 with the payout ratio at 88.95%. The growth rate over the last decade is 12.4%.

The stock is up about 8% for the year, trading at 17.3 times its trailing twelve months (ttm) earnings. It’s selling at a slight premium to Procter & Gamble (NYSE:PG) at 15.5 and at a discount to The Clorox Company (NYSE:CLX) at 18.3 (ttm).

As mentioned in a previous article on Clorox, all three companies are worthy of consideration in a portfolio right now. Snap them up as the market turmoil continues to deliver bargain opportunities.

Commerce Bancshares (NASDAQ:CBSH): The dividend has been increased for 43 consecutive years. The yield is 2.37% and the annual payout is $0.92. The quarterly payout was increased by 2.27% to $0.23 with the payout ratio at 31.2%. The growth rate over the last decade is 9.5%.

The stock is down about 8% for the year, trading at 12.4 times its trailing twelve months (ttm) earnings. It’s trading at a slight discount to UMB Financial Corporation (NASDAQ:UMBF) at 13.1 (ttm) and at a premium to U.S. Bancorp (NYSE:USB) at 10.53 (ttm).

Third quarter results showed plenty of positive signs in the fundamentals, hugely satisfying considering the economic backdrop at the moment. Investors looking for exposure to banks should consider the smaller, regional banks like Commerce Bancshares. The bank is in better financial shape than its bigger counterparts.

Community Trust Bancorp (NASDAQ:CTBI): The dividend has been increased for 31 consecutive years. The yield is a healthy 4.4% and the annual payout is $1.24. The quarterly payout was increased by 1.64% to $0.31 with the payout ratio at 49.8%. The growth rate over the last decade is 8%. DRIP fees are not payable.

The stock has fallen about 3% for the year and trades at a trailing price/earnings multiple of 11.23, on par with U.S. Bancorp (USB) at 11.37 (trailing).

The fundamentals look sound. The net interest income margin grew by 13 basis points with net interest income rising 12% from the prior year. On the balance sheet side, total assets increased 8% from December 2010. Loans outstanding decreased 1.6% from December 2010 and non performing loans fell 37% from June last year.

The stock is worth considering at the current valuation on its sound financial standing and given that it’s trailing and forward price/earnings multiples are near their 5 year lows.

Conn. Water Service (NASDAQ:CTWS): The dividend has been increased for 42 consecutive years. The yield is 3.55% and the annual payout is $0.95. The quarterly payout was increased by 2.15% to $0.2375 with the payout ratio at 67.86%. The growth rate over the last decade is a paltry 1%.

The stock is down about 2% for the year and trades at a trailing price/earnings multiple of 21.3, a premium valuation when compared to American Water Works Company (NYSE:AWK) at 17.9 (trailing).

Investors should wait for a pull back in the price before committing funds. If you are still eager to hold water utility stocks, the cheaper (and higher payout) option is American States Water (NYSE:AWR) which was mentioned in the second article in this series.



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