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10 Stocks Raising Dividends for 50 Years in a Row

Neither bear markets nor recessions have dethroned the Dividend Kings

Dividend Stocks labeled financial chart paper print out is paper clipped to a manila file folder

Alamy Stock Photo

En español | Nothing's for certain in these days of the coronavirus, but 10 stalwart companies have hiked their dividends every year for half a century or more. That kind of consistency, a boon to retirees who rely on steady dividend income to pay bills, is rare on Wall Street — and it can come with risk, too.

50 years of raises

The 10 so-called Dividend Kings, members of the Standard & Poor's 500 stock index that have raised dividends annually for at least 50 straight years, aren't flashy: 3M, Dover, Emerson Electric and Stanley Black and Decker are industrial companies that make everything from tools to Post-it notes. Coca-Cola, Colgate-Palmolive, Procter & Gamble and Hormel make consumer staples: soft drinks, toothpaste, laundry detergent and Spam, respectively. Johnson and Johnson is in the health care business, turning out everything from vaccines to Band-Aids. Genuine Parts makes, well, genuine parts for cars and trucks.

What they lack in flashiness they make up for with a commitment to rewarding loyal shareholders, in the form of annual dividend increases. Companies have many choices in what to do with their earnings, after they have paid their workers and their bills. They can build new plants and buy more equipment, hire more employees (or give them raises), buy back stock or pay dividends. Most companies do a combination of all these, but those that send investors a check on a regular basis, typically every three months, often have extremely loyal shareholders.

Although these 10 Dividend Kings have long records of increasing payouts, others have formidable records, too. Currently, 66 companies in the S&P 500 (including these 10) are called Dividend Aristocrats: They have increased their dividends every year for at least 25 years. Even a decade's worth of hikes is admirable. “If you've increased every year for 10 years, then increasing dividends is part of your corporate culture,” says Howard Silverblatt, senior index analyst for Standard & Poor's.

Even some technology companies, long noted for retaining earnings to fund research and development, are building track records of doling out dividends. Microsoft, for example, paid its first dividend in 2003. Apple, which resumed paying dividends in 2012 after a long hiatus, ranks third in the S&P 500 for sheer dollar volume of dividends paid out, just behind number one AT&T and ExxonMobil, number two.

Still, raising dividends over a long period is something to crow about. S&P doesn't require large annual increases to be a Dividend Aristocrat. In fact, low and steady increases tend to ensure that companies are able to keep raising dividends in the future. Dover's most recent dividend increase, for example, was 1 cent, to 49 cents per share per quarter. At its current share price, that's a dividend yield of 2.07 percent. (Yield is the total amount of a company's dividend payout in a year — so in Dover's case, $1.96 — divided by its current share price.)


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No guarantees

From a retiree's point of view, dividends have three important advantages:

  1. Yield. Currently, the average dividend yield of the stocks in the S&P 500 index is 1.95 percent, compared with 0.12 percent for money market funds and 0.55 percent for bank savings accounts.
  2. Taxes. Dividends are taxed by the IRS at a maximum 20 percent. If you're a single filer and have taxable income of up to $40,000, your federal tax rate on dividends is zero. For those filing jointly, the zero bound is $80,000 in taxable income. To get to the 20 percent federal tax rate on dividends, single taxpayers must have $441,450 or more in taxable income, and those filing jointly must earn $496,600 or more. Everything in between is taxed at 15 percent.
  3. Hikes. When you buy a bond, you get regular, fixed payments. Over time, those payments can get overwhelmed by inflation. A $1 interest payment will be worth just 68 cents after 20 years of 2 percent inflation. But a stock dividend has the potential to rise each year and keep up with inflation.

One drawback: Companies hate to cut dividends, let alone eliminate them entirely, because it's a sign of financial weakness. Wall Street feels the same way about financial weakness that Superman feels about kryptonite. When General Electric, once a dividend stalwart, announced it was slashing its dividend to a penny a share in December 2018, the stock fell 4.6 percent the day of the announcement. It had already fallen 60 percent that year, thanks to an earlier cut. More recently, Ross Stores, which had increased its dividend for 25 years, suspended it in May. The fashion retailer is down 16.7 percent this year.

The coronavirus pandemic is taking a toll on dividend payers. In January, ahead of the outbreak, no companies decreased or suspended their dividends. In May, 19 stocks in the S&P 500 decreased their dividends and 41 suspended them. The average dividend payout fell by 6 percent, as companies seek to conserve cash to weather the uncertainty.

And, dividend or no dividend, stocks are stocks, and when share prices fall, they can fall hard. The stock market has yet to recover fully from its sudden, deep decline from February through March. So far this year, the Dividend Aristocrats have fallen 8.59 percent, compared with a 2.57 percent loss for the S&P 500 index. (Both figures include reinvested dividends.)

The Kings of Dividends

Dividends typically make up about a third of the total return — share-price appreciation plus dividends — from the S&P 500. These 10 companies have managed to raise their dividends every year for at least 50 straight years, counting down from 64 years running:

dover - logo of a corporation that has long paid shareholders annual dividends

64 Years   

Dover


gpc - logo of a corporation that has long paid shareholders annual dividends

64 Years 

Genuine Parts Company 


emerson - logo of a corporation that has long paid shareholders annual dividends

63 Years   

Emerson Electric Co.


procter and gamble - logo of a corporation that has long paid shareholders annual dividends

63 Years

Procter & Gamble


3m - logo of a corporation that has long paid shareholders annual dividends

62 Years

3M 


johnson and johnson - logo of a corporation that has long paid shareholders annual dividends

58 Years

Johnson & Johnson 


coca cola - logo of a corporation that has long paid shareholders annual dividends

58 Years

Coca-Cola


colgate palmolive - logo of a corporation that has long paid shareholders annual dividends

57 Years

Colgate-Palmolive


stanley black and decker - logo of a corporation that has long paid shareholders annual dividends

52 Years

Stanley Black & Decker, Inc


hormel - logo of a corporation that has long paid shareholders annual dividends

51 Years

Hormel Foods

Data: S&P Dow Jones Indexes, Photos: Alamy Stock

Dividend investing

It's up to you to decide whether you want to invest in dividend-paying stocks, even those with long records of increasing their dividends. Research them carefully, and don't hesitate to ask an adviser for guidance. Investing in a single stock can be far riskier than investing in a portfolio of stocks. When you have dozens of stocks, a big fall in one stock can be buffered by your other holdings. When you have just one, it's entirely possible to lose most or all of the money you invest.

You can, however, invest in mutual funds or exchange-traded funds, which can own hundreds of securities. About 76 percent of the companies in the S&P 500 pay dividends, so you could invest in a fund that tracks the top S&P 500 dividend payers. ProShares S&P 500 Dividend Aristocrats and Vanguard Dividend Appreciation are two such funds to consider.

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