Some say that Dividend Investing is boring, claiming that dividend stocks are low growth and offer near-flat capital appreciation compared to the latest investment trends.
But when all things fail, these boring stocks prevail. Examples of boring stocks include those on the Dividend Kings list: resilient companies with shareholder-friendly management that have raised their dividends for at least 50 consecutive years. However, aside from stability, what most people overlook is their ability to generate significant income in retirement that increases - and to me, that’s anything but boring.
So, let’s take a look at three quality names: three Dividend Kings that are well-suited to own, literally forever.
How I Came Up With The Following Stocks
Using Barchart’s Stock Screener, I selected the following filters to get my list:
- Overall Buy/Sell/Hold Signal: Buy.
- 5-Yr Dividend Growth (%): Set at 40% - Very High.
- Number of Analysts: 16 analysts. The more, the better, as it builds a stronger consensus.
- Current Analyst Rating: Moderate to strong buy.
- Watchlist: Dividend Kings.
I also added filters for overall opinion strength and direction to avoid any red flags.
With the filters in place, I got exactly three Dividend Kings:
Let’s discuss each, starting with the Dividend King with the highest 5-year dividend growth rate.
Parker-Hannifin Corp (PH)
Parker-Hannifin Corp is the leader in motion and control technologies, operating in 104 countries. Its products are found in, on, and around nearly everything that moves. The company solves the most significant engineering challenges that make the world cleaner, smarter, and safer.
Parker-Hannifin’s latest quarterly financials reported sales of $4.96 billion, down 2.2% year-over-year. Despite this, net income was $961 million, up 32% compared to the previous same quarter, last year.
Parker is a Dividend King, having increased its dividends for 69 consecutive years. The company pays a forward annual dividend of $7.20, which translates to a yield of approximately 1.1%. That said, Parker-Hannifin’s 5-year dividend growth rate is 92.09%, and the stock has an average rating of 4.55, or a strong buy, from 20 analysts.
Abbott Laboratories (ABT)
The second company on this list is Abbott Laboratories - a company I covered a fair bit, so I’ll keep the introductions short. Abbott operates as one of the most diversified healthcare companies in the world, providing a range of healthcare products tailored to various health needs.
Abbott’s latest quarterly financials reported sales of $10.4 billion, up 4% year-over-year. Further, reported net income was $1.3 billion, up 8.2% compared to same quarter last year.
Abbott is proud of their 53-year streak of increasing their dividend. As of this writing, the company pays a forward annual dividend of $2.36, which translates to a yield of approximately 1.76% and features a 5-year dividend growth of 71.88%.
ABT stock has an average rating of 4.52, or a strong buy, from 25 analysts.
Abbvie Inc (ABBV)
The last company on my list of Dividend Kings to own forever is Abbvie Inc. Like Abbott, Abbvie also operates in the medical sector. Specifically, Abbvie is a pharmaceutical company with a global presence in 175 countries, recognized for its innovative cancer treatments. The company is actively expanding and has established a significant market presence following the acquisition of Allergan, a leader in eye care, neurosciences, and medical aesthetics.
Abbvie’s latest quarterly financials reported sales of $13.3 billion, up 8.4% year-over-year. Its net income was $1.3 billion, a decrease of 6% compared to the same quarter last year.
Despite that, Abbvie is a newly minted Dividend King, having increased its dividends for over 50 years. The company pays a forward annual dividend of $6.56, translating to a yield of approximately 3.44%. Its 5-year dividend growth is 44.86%.
The stock has an average rating of 4.11, or a moderate buy, from 27 analysts.
Final Thoughts
So, there you have it: three companies with shareholder-friendly management that have significantly increased their dividends over the past five years. It's about as close to proof as you can get that long-term investing can beat market noise and still make significant returns for shareholders. The key is to know which companies to invest in - and these three Dividend Kings are an excellent start.
