Seeking Alpha
Profile| Send Message|
( followers)  

The companies on this list have been raising their dividends for at least 30 years. Let's take a look at what investors should consider. Please use this analysis as a starting point for your own due diligence.

Federal Realty Investment Trust (NYSE:FRT): The dividend has been increased for 44 consecutive years. The yield is 3.1% and the annual payout is $2.76. The quarterly payout was increased by 2.9% to $0.69 with the payout ratio at 133.98%. The growth rate over the last decade is 3.8%.

The stock has had a sharp run-up from August and trades at a trailing price/earnings multiple of 38.3, much higher than Acadia Realty Trust (NYSE:AKR) at 15.5 (trailing). It has gained over 15% for the year.

Federal Realty's advantage comes in the form of the real estate mantra, "location, location and location." It owns retail spaces in areas where retailers want to be. This strategy of owning shopping centers in affluent areas will see earnings and dividends growing at a healthy pace. Investors should wait for the stock to take breather as the current valuation is a bit rich right now.

Franklin Resources (NYSE:BEN): The dividend has been increased for 30 consecutive years. The yield is 0.94% and the annual payout is $1. The quarterly payout was increased by 13.64% to $0.25 with the payout ratio at 11.6%. The growth rate over the last decade is 13.9%.

The stock has fallen steadily since July and is down over 15% for the year, trading at a trailing price/earnings multiple of 10.7. A healthy balance sheet with ample cash on hand doesn't compensate enough for a low dividend yield.

Earnings and asset inflows are likely to be volatile for the near future due to there not being any resolution to the European debt crises. Investors should give this stock a miss for now.

Genuine Parts Company (NYSE:GPC): The dividend has been increased for 55 consecutive years. The yield is 3.13% and the annual payout is $1.80. The quarterly payout was increased by 9.76% to $0.45 with the payout ratio at 51.87%. The growth rate over the last decade is 4.2%.

The stock is up about 14% for the year and trades at a trailing price/earnings multiple of 16.7, slightly higher than Advance Auto Parts (NYSE:AAP) at 14.4 (trailing) and AutoZone (NYSE:AZO) at 15.9.

The company's solid finances which are highlighted by low debt and strong cash flow will enable Genuine Parts to grow earnings at a solid pace over the long stretch and reward shareholders accordingly through stock repurchases and dividend hikes. The current valuation coupled with an above average dividend yield makes a strong case for buying this stock

Gorman-Rupp Company (NYSEMKT:GRC): The dividend has been increased for 39 consecutive years. The yield is 1.34% and the annual payout is $0.36. The quarterly payout was increased by 7.14% to $0.09 with the payout ratio at 23.68%. The growth rate over the last decade is 5.2%.

The stock has gained about 5% for the year and trades at a trailing price/earnings multiple of 16.9 which is much cheaper than Colfax Corporation (NYSE:CFX)at 43.6 (trailing) and slightly expensive than Flowserve Corporation (NYSE:FLS) at 13.2 (trailing).

Whilst the recent results were solid and point to a solid showing for the first quarter of 2012, the current yield is too low. There are better options on this list.

H.B. Fuller Company (NYSE:FUL): The dividend has been increased for 42 consecutive years. The yield is 1.4% and the annual payout is $0.30. The quarterly payout was increased by 7.14% to $0.075 with the payout ratio at 17.65%. The growth rate over the last decade is 2.9%.

The stock has risen about 10% for the year and trades at a trailing price/earnings multiple of 13.2, on par with rival 3M Company (NYSE:MMM) at 13.4 (trailing).

Operating results are solid with the company's planned price increases having been accepted in the market which bodes well for 2012 revenues. Nonetheless, 3M is a better dividend play as detailed in the first 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.

Source: 5 Safe Stocks Paying Dividend For 30 Years Or More