Our safe dividend stock list has 43 stocks that have raised their dividend for 29 consecutive years or more. Long-term investors are always on the hunt for stocks with solid growth and sustainable dividends. Companies that have a long track record of raising their dividend and increasing their income can be great core holdings for any retirement portfolio.
Of these 43 dependable dividend payers, only 7 have strong buy ratings from analysts. All but one of these stocks has a dividend yield over 2%.
Mcdonald's Corp (MCD)
MCD has a dividend yield of 2.5% and has increased their dividend for 35 consecutive years. Their payout ratio is just 50% and their 5 year dividend growth rate is 21.3%. McDonald's has 20 buy ratings, 5 hold ratings and 1 sell rating. They were downgraded by Oppenheimer on January 25th, however, they reported better than expected same store sales for January, citing improving breakfast sales and chicken McBites performance. Europe was also a strong performer for McDonald's. Jim Skinner has been driving great growth for this company.
Johnson & Johnson (JNJ)
JNJ has a dividend yield of 3.4% and has been increasing their dividend for 49 consecutive years. Their 5 year dividend growth rate is 9.1% and their payout ratio is a sustainable 55%. Johnson & Johnson has 15 buy ratings, 11 hold ratings and no sell ratings. Barclays and Morgan Keegan both initiated coverage of JNJ on 2011 with buy and neutral ratings respectively.
Ecolab, Inc (ECL)
Ecolab has the lowest yield of the bunch at 1.2%. We exclude dividend stocks with yields under 1%, and this stock may have too small of a yield for many income investors. They are committed to raising their dividend, with steady dividend growth rates of 11% annually and 26 years of consecutive dividend increases. Ecolab has 12 buy ratings, 6 hold ratings and no sell ratings. Most recently, ECL was upgraded by Deutsche Bank in August of 2011.
Coca-Cola Company (KO)
KO has a dividend yield of 2.7% and has increased their dividend for 49 years. They have a low payout ratio of 35%, and a 5 year dividend growth rate of 8.69%. Although Coke was recently downgraded by UBS to hold, it still has 7 strong buy and 7 buy ratings compared to 4 hold and no sell ratings. Coke's stock is up 9% in the last 12 months compared to Pepsi, which is up only 3.7%.
Air Products & Chemicals (APD)
APD has a dividend yield of 2.5% and has increased their dividend for 29 years. Their payout ratio is 40% and their 5 year dividend growth rate is 10.5%. APD has 16 buy ratings, 4 hold ratings and no sell ratings. Most recently, Deutsche Bank upgraded them in 2011 from a hold to buy.
Target Corp (TGT)
Target has increased their dividend for 40 consecutive years and has a dividend yield of 2.1%. Their dividend growth has been strong, with 3 and 5 year growth rates over 20%. Target's payout ratio is a low 26%. Analysts have 14 buy ratings, 9 hold and no sell ratings for Target. Most recently UBS initiated coverage with a buy rating in December of 2011.
Stanley Black & Decker (SWK)
SWK has increased their dividend for 44 consecutive years and currently has a dividend yield of 2.2%. Their 5 year dividend growth rate is 7.1% and their payout ratio is 42%. Stanley Black and Decker has 12 buy ratings, 3 hold ratings and no sell ratings. Most recently Argus initiated coverage in November of 2011 with a buy rating.
Disclosure: I am long (JNJ).