In good times and bad, dividend aristocrats deliver.
Dividend investing is almost always a long-term strategy. After all, many companies only pay their shareholders once per quarter and yields are calculated on an annualized basis. That means if you don’t stick around for at least a year, you’re not realizing the full advertised income potential of a typical stock. What’s more, many attractive dividend stocks have committed to consistently growing dividends over the long term to share success with their stockholders. A “dividend aristocrat” is an elite class of dividend stock that has increased its payout at least once a year for the last 25 years or more, and represents the gold standard for growing dividends. Here are nine such dividend aristocrats to consider.
3M Co. (ticker: MMM)
With uninterrupted dividends paid to shareholders for more than a century, including 64 consecutive years of dividend growth, 3M is a case study in how income-oriented investors can benefit by prioritizing long-term reliability over short-term swings in prices. The diversified chemical company serves all manner of end-users including pharmaceutical firms, food service companies, automakers, construction firms, electronics companies and everything in between. This adds up to a very broad business that provides reasonably reliable revenue that doesn’t depend on a certain segment of the economy. Coupled with a large scale, 3M has the entrenched operations to support significant income growth over the last few decades — and likely for many more to come.
Current yield: 2.9%
AbbVie Inc. (ABBV)
AbbVie is a pharmaceutical company behind a number of blockbuster drugs, including the popular autoimmune treatment Humira that is prescribed for everything from psoriasis to arthritis. While ABBV has only existed as a stand-alone brand for about a decade or so, its long history of generous dividends dates back to its roots in Abbott Laboratories (ABT) before a 2013 spinoff. The higher-margin branded pharmaceutical segment of AbbVie makes it an attractive play for any investors interested in both exposure to the health care sector as well as a steady income stream.
Current yield: 4.4%
Cardinal Health Inc. (CAH)
Another interesting health care play, Cardinal is a mid-sized stock that doesn’t quite have the same name recognition as some mega-cap names in the sector. That doesn’t mean it’s not a powerful income investment, however, with 34 consecutive years of dividend increases. This history is built on the fact that it is in the rather mundane but important business of supplying standard services and products to hospitals, pharmacies and medical offices including gloves, IV tubing, bandages and other supplies. There’s not a ton of growth here and often not very high margins. But these items remain in constant demand, which has provided the steady cash flow CAH needed to support dividends to shareholders.
Current yield: 3.8%
Chevron Corp. (CVX)
Despite the very real pressures of global warming and related regulations, Chevron recently committed to making 2021 its 34th consecutive year of increasing dividends. That’s impressive alone, but made even more so when you consider that its yield is roughly four times that of the standard S&P 500 stock. The icing on the cake is that thanks to rising materials prices over the last year or two, particularly for crude oil, CVX stock has managed to tack on more than 30% gains in the last 12 months on top of its generous and growing dividend.
Current yield: 5.3%
Consolidated Edison Inc. (ED)
New York City-area utility Consolidated Edison is one of those businesses that may not get a lot of attention, but continues to quietly deliver for its shareholders. The company offers electric services to approximately 3.5 million customers in New York City and Westchester County as well as gas to about 1.1 million more customers in the greater Manhattan area. With constant demand and continued growth for this key urban area, ED is all but guaranteed to see continued operating success. And its 47 years of consecutive dividend increases prove ConEd is committed to sharing that success with shareholders, too.
Current yield: 3.9%
Federal Realty Investment Trust Inc. (FRT)
Many investors may not have heard of Federal Realty, but this real estate investment trust (REIT) is a leader in high-quality retail properties with more than 100 locations with 2,800 tenants nationwide. What’s most interesting about FRT is that even though it took a big hit during the worst of the COVID-19 pandemic like many retail-related plays, it not only kept paying its dividend but actually kept increasing distributions. This has given it an enviable track record of more than 50 years of consecutive dividend increases. In the last 12 months, as the U.S. economy has recovered, shares have skyrocketed more than 41% on top of its generous dividend, too.
Current yield: 3.6%
International Business Machines Corp. (IBM)
Though Big Blue is more than a century old, it’s actually one of the more recent additions to the list of dividend aristocrats after approving its 26th consecutive annual dividend increase this year. The enterprise technology company isn’t quite on the same level as it once was, thanks in part to the rise of cloud computing giants like Amazon.com Inc.’s (AMZN) Amazon Web Services that have pushed some of IBM’s legacy hardware operations to the side. However, its IT infrastructure services are still among the best in the world and the company’s stable $75 billion revenue stream is plenty large to support continued payouts for years to come.
Current yield: 4.6%
Kimberly-Clark Corp. (KMB)
Paper products giant Kimberly-Clark makes everything from Huggies diapers to Kleenex tissues and Cottonelle toilet paper. These consumer staples are in constant demand regardless of the broader economic environment, and that means KMB shareholders can rely on this company’s scale and stability no matter what happens on Wall Street. With more than 45 consecutive years of increasing dividend payments, this stock is among the most reliable income investments you’ll find out there right now. And for skeptics inclined to believe this stock isn’t exciting enough, the company’s nearly 150-year corporate history — Kimberly-Clark was founded in 1872 — should help underline the fact that, sometimes, boring is good.
Current yield: 3.3%
Walgreens Boots Alliance Inc. (WBA)
Walgreens is a pharmacy giant that operates more than 9,000 retail stores under the Walgreens and Duane Reade brands in the United States and another 5,000 stores under Boots and other brands worldwide. Shares have cooled off a bit since July on fears that a recent boom in sales driven by COVID-19 vaccines could dry up in the future, but long-term dividend investors should still see a lot of promise in this entrenched drugstore chain as it builds on more than 40 years of consecutive dividend payments.
Current yield: 3.9%
9 best dividend aristocrats to buy now:
— 3M Co. (ticker: MMM)
— AbbVie Inc. (ABBV)
— Cardinal Health Inc. (CAH)
— Chevron Corp. (CVX)
— Consolidated Edison Inc. (ED)
— Federal Realty Investment Trust Inc. (FRT)
— International Business Machines Corp. (IBM)
— Kimberly-Clark Corp. (KMB)
— Walgreens Boots Alliance Inc. (WBA)
