From offering long-term and regular predictable income to helping you make the most of capital appreciation over time, there certainly is an appeal to dividend stocks. And while many have outperformed the stock market at one point or another, not all dividend stocks are made equal.
Widely known as the cream of the dividend stock crop, these companies have not only generated strong profits and grown their earnings year after year, but they have a rich history of uninterrupted dividend payouts that stretch back several decades.
Dubbed Dividend Aristocrats, Kings and Zombies, these are rock-solid investments you can bank on.
The Dividend Aristocrats
Launched by Standard and Poor’s (S&P) in May 2005, Dividend Aristocrats are a select group of S&P 500 stocks that have paid and increased their base dividend every year for at least 25 consecutive years. As of January 22, 2021, there are 65 Dividend Aristocrats.
Boasting a long history of outperforming the market, these companies are considered quality businesses based on their long dividend histories, as well as their strong and competitive advantage, making them one of the most attractive stocks to own.
How are Dividend Aristocrats selected?
In order for a company to join the dividend aristocrat club they must:
Form part of the S&P 500
Have 25+ consecutive years of dividend increases.
Have a minimum float-adjusted market cap of at least $3 billion.
An average of at least $5 million in daily share trading value for the previous three months.
The S&P Dow Jones Indices, which owns the S&P 500 index, reviews the list of qualifying companies annually and updates it accordingly. In addition, at the beginning of every quarter, the index is reweighted, in other words, the size of each company on the list is reset so that they all make up an equal percentage of the index.
Below is a table of the top 10 Aristocrats by dividend yield:
| COMPANY | TICKER | PRICE | DIVIDEND YIELD | LAST DIVIDEND | SECTOR |
| AT&T Inc | T | $32.02 | 6.50% | $0.52 | Public Utilities |
| Exxon Mobil Corporation | XOM | $59.19 | 5.88% | $0.87 | Energy |
| Chevron Corporation | CVX | $106.11 | 4.91% | $1.34 | Energy |
| AbbVie Inc | ABBV | $113.90 | 4.35% | $1.3 | Health Care |
| Consolidated Edison Inc | ED | $78.12 | 3.94% | $0.775 | Public Utilities |
| People’s United Financials Inc | PBCT | $18.5 | 3.91% | $0.183 | Finance |
| Federal Realty Investment Trust | FRT | $112.57 | 3.76% | $1.06 | Consumer Services |
| Walgreens Boots Alliance Inc | WBA | $54.12 | 3.46% | $0.468 | Health Care |
| Fanklin Resources Inc | BEN | $32.04 | 3.43% | $0.28 | Finance |
| Kimberly-Clark Corporation | KMB | $134.72 | 3.28% | $1.14 | Consumer Durables |
What has the performance of Dividend Aristocrats been like so far?
According to the ProShares Dividend Aristocrats ETF (NOBL), in March 2021 the Dividend Aristocrats registered a positive total return of 7.6%, while their full year 2020 performance has been that of 8.68%. And if we look at their long-term performance, the Dividend Aristocrats index has generated over 330% since the end of 2009, over 14% in annualised returns.
Other Popular Dividend Aristocrats
Johnson & Johnson (JNJ)
A global healthcare giant which manufactures and sells healthcare products through its three segments, namely pharmaceuticals, medical devices and consumer health products, Johnson & Johnson has a diversified business model and strong performance. In 2020, revenue was higher by 0.6% to $82.6 billion from the previous year, while adjusted EPS was at $8.03. At the same time, the company expects revenue of $90.5 billion to $91.7 billion and adjusted EPS of $9.40 to $9.60 for 2021.
Impressively, Johnson & Johnson has increased its dividend for 58 consecutive years, with its stock yield currently at 2.5%.
Add JNJ to your portfolio.
Walmart Inc (WMT)
A heavyweight in the retail space, Walmart is well-known for being both a strong brand and maintaining industry dominance, however, it has also been praised for its long dividend history. Its first dividend back in 1974 was that of $0.05 per share. Marking its 48th consecutive year of dividend increases in February 2021, the company announced that it will raise this to $2.20 per share.
Despite the constantly changing environment of the retail industry, Walmart has excelled at adapting itself, by investing heavily in its eCommerce platform. As a result, for the fourth quarter, the company’s revenue increased by 7.3%, whereas for fiscal year 2020, revenue was up 6.7%.
Have a look at why Walmart is a retail powerhouse and head over to Moneybase Invest to buy WMT stock.
The Procter & Gamble Company (PG)
A consumer products behemoth that sells its products in more than 180 countries, Procter & Gamble’s portfolio include core brands like Gillette, Tide, Crest, Pampers, Head & Shoulders, Bounty and Oral-B, to name a few. A time-tested dividend growth company with strong qualities, following a complete overhaul of its product portfolio back in 2018, the company saw renewed growth potential.
For fiscal year 2020 net sales amounted to $71 billion, an increase of 5% when compared to the previous year. On the other hand, core earnings per share were $5.12, an increase of 13% versus the previous year, driven by an increase in net sales, as well as in core operating profit margin. In addition, the company has been paying dividends for 130 years, while it has consistently increased its dividend for 64 consecutive years.
Add PG to your portfolio today.
The Coca-Cola Company (KO)
It has been quenching peoples’ thirst for decades, while its brands account for about 2 billion servings of beverages worldwide every day. The Coca-Cola Company is an iconic brand and the world’s largest beverage company with more than 500 unique names under its wing. But as consumers’ tastes have shifted to healthier alternatives, the conglomerate has made great strides to reposition its portfolio by expanding into juices and teas to cater to a more health-conscious consumer base. And doing so appears to have paid off. The company reported an increase of 5% in first-quarter net revenues for 2021 to $9 billion and organic revenues (non-GAAP) grew 6%, which was driven by 5% growth in concentrate sales. Adjusted earnings-per-shares also increased 8% for the quarter.
With a market cap of $232.831 billion, the Coca-Cola Company is a so-called mega-cap stock and one of the steadiest and most reliable dividend payers among blue-chip stocks. Its dividend yield stands at 3.08%, while its annual dividend is that of $1.68 per share.
Have a look at why Coca-Cola is the greatest beverage company of all time and click here to make KO stock yours.
The Dividend Kings
A stock with 50 or more consecutive years of dividend increases, Dividend Kings are companies that have shown resilience and have survived several events ranging from inflation and rising interest rates to economic recessions and market crashes, technological booms and busts, as well as changes to consumer tastes and much more. Persevering through the good and the bad while maintaining regular dividend increases shows that these are outstanding companies that have demonstrated durability, consistent free cash flow generation, stable returns on capital and as expected, predictable dividend growth.
In 2020, just 27 stocks were crowned Dividend Kings.
How are Dividend Kings selected?
Unlike Dividend Aristocrats who are required to be part of the S&P 500 and must have demonstrated 25 years or more of consecutive dividend hikes, to become Dividend Kings companies must have increased their dividends consecutively for 50 or more years.
Below is a table of the top 10 Kings by dividend yield:
| COMPANY | TICKER | PRICE | DIVIDEND YIIELD | LAST DIVIDEND | SECTOR |
| Altria Group Inc | MO | $47.85 | 7.15% | $0.86 | Consumer Non-Durables |
| Federal Realty Investment Trust | FRT | $112.57 | 3.76% | $1.06 | Consumer Services |
| Northwest Natural Holding Company | NWN | $54.04 | 3.55% | $0.48 | Public Utilities |
| The Coca-Cola Company | KO | $54.14 | 3.07% | $0.42 | Consumer Non-Durables |
| 3M Company | MMM | $199.38 | 2.95% | $1.48 | Health Care |
| Genuine Parts Company | GPC | $130.26 | 2.46% | $0.815 | Capital Goods |
| Johnson & Johnson | JNJ | $167.77 | 2.44% | $1.06 | Health Care |
| The Procter & Gamble Company | PG | $134.54 | 2.41% | $0.87 | Basic Industries |
| Emerson Electric Co | EMR | $91.11 | 2.21% | $0.505 | Energy |
| Colgate-Palmolive Company | CL | $81.09 | 2.18% | $0.45 | Consumer Non-Durables |
What has the performance of Dividend Kings been like so far?
With no entity regulating and monitoring Dividend Kings, tracking their historical performance as a whole can be difficult, while performance tracking may also introduce a number of survivorship bias. Regardless, the dividend yields offered tend to be higher than the average dividend yield of S&P 500 members and this coupled with their consistency in both paying and increasing dividend payouts, make Dividend Kings worth considering adding to your portfolio.
Other popular Dividend Kings
Nordson Corporation (NDSN)
A premium dividend king with a track record that few can rival, Nordson Corporation has increased its dividend for 57 consecutive years, making it an appealing stock for long-term dividend growth investors. A high-growth company for several years, Nordson Corporation engineers, manufactures and markets unique products used to dispense, apply and control adhesives, sealants, polymers, coatings and other fluids. With its products serving as a solution to its customers’ engineering problems, the company has managed to build a solid reputation for offering both quality and value.
Its revenue mix is highly diversified, with parts and consumables generating 54% of its sales, while 23% of sales come from its standard products, whereas the remaining 23% from its engineered systems. The company’s average annual sales growth between 2016 and 2020 was 5%, while its EBITDA margin over the same period was that of 17%.
Interested to invest? Buy NDSN stock here.
Sysco Corporation (SYY)
A distribution giant of food, beverages, cookware, utensils and tableware, as well as restaurant and kitchen equipment amongst other things, serving various institutions like schools, hospitals and restaurants, Sysco is a market leader in the U.S. As expected, 2020 has been a tough year on the company due to the pandemic’s impact on restaurants and bars. But as its customers are back to business, it’s not all doom and gloom. Indeed, shares have roughly doubled off their lows last year and are right back to where they were pre-pandemic.
Sysco has a long history of steady dividends, as well as regular dividend increases. In fact, it has paid a dividend every quarter since it went public in 1970, while its most recent dividend increase was a 15% raise that took place in November 2019. Currently, its dividend yield is 2.17%. With several attractive qualities such as the fact that it is one of the largest companies in the industry with a durable competitive advantage over its competition, once diners begin flocking to restaurants, Sysco is poised to return to dominance.
Add SYY stock to your portfolio.
Stanley Black & Decker (SWK)
A favourite of DIY fans and a solution to several industries across the board, chances are you own one of its popular hand or power tools. A mash-up of some of the biggest power tool manufacturers across the globe – Stanley Works and Black & Decker – the company sells a number of tools and related accessories, while it also produces electronic security solutions, healthcare solutions and engineering fastening systems.
With 144 years of uninterrupted dividends and 53 consecutive annual dividend increases, Stanley Black & Decker is one of the most impressive Dividend Kings, making it a relatively safe dividend investment. Its growth prospects are also very promising, with the company maintaining a buoyant growth rate throughout 2020. For the fourth quarter, revenue increased 19% to $4.4 billion, whereas adjusted earnings-per-share grew 51% to $3.29. On the other hand, full-year revenues grew 1% to $14.5 billion. The company has stated that organic growth in 2021 is expected at a range of 4% to 8%, whilst total revenue should be in the double-digits.
Make SWK stock yours by heading over to Moneybase Invest.
Target Corp (TGT)
A discount retailer from across the pond with a market capitalisation of $105.689 billion as of May 6, 2021, Target operates close to 1,909 stores in the U.S., in addition to an eCommerce business. The retailer giant did well in 2020, performing better than in previous years as it benefitted from the pandemic which drove consumers to stockpile on goods and shift most of their shopping online. So much so, that the company added $15 billion in sales growth last year, more than in the previous 11 years combined and all thanks to its growth initiatives like boosting its eCommerce platform, rolling out its same-day fulfilment service and redeveloping its stores.
A dividend champion to say the least, Target has paid a dividend since 1967 and increased it for 53 consecutive years. And last April, it announced that it is boosting its September per-share quarterly payment from $0.66 to $0.68, offering investors a 1.28% dividend yield, which falls roughly in line with other S&P 500 stocks.
The Dividend Zombies
If you thought that the Dividend Aristocrats and Kings mentioned above were a safe bet, imagine what stocks with over 100 years of consecutive dividend growth can offer in terms of return. Providing higher yields and dividend safety when compared with your average dividend stocks, these are considered extremely reliable payers.
How are Dividend Zombies selected?
To become Dividend Zombies companies must have increased their dividends for 100 or more years with no interruptions. Just 8 companies have managed to make the list.
Below is a table of all the Dividend Zombies, rearranged by dividend yield:
| COMPANY | TICKER | PRICE | DIVIDEND YIELD | LAST DIVIDEND | SECTOR |
| Exxon Mobile Corporation | XOM | $59.19 | 5.88% | $0.87 | Energy |
| Edison Consolidated Inc | ED | $78.12 | 3.94% | $0.775 | Public Utilities |
| General Mills Inc | GIS | $61.8 | 3.27% | $0.51 | Consumer Non-Durables |
| The Coca-Cola Company | KO | $54.14 | 3.07% | $0.42 | Consumer Non-Durables |
| Procter & Gamble | PG | $134.54 | 2.41% | $0.87 | Basic Industries |
| Colgate-Palmolive Company | CL | $81.09 | 2.18% | $0.45 | Consumer Non-Durables |
| Stanley Black & Decker Inc | SWK | $210.72 | 1.33% | $0.7 | Capital Goods |
| PPG Industries Inc | PPG | $178.75 | 1.21% | $0.54 | Basic Industries |
Spotlight on two Dividend Zombies
Exxon Mobil Corporation (XOM)
The largest oil company in the U.S., Exxon Mobil traces its roots to Standard Oil which was founded by business magnate John D. Rockefeller back in 1870. Since then, the company has transformed from a regional refiner and distributor of kerosene to the largest publicly traded petroleum and petrochemical enterprise in the world. However, the oil and gas industry is highly cyclical and this often prevents companies from raising their dividends, most especially on a yearly basis and with no interruption. Yet, Exxon Mobil has been the exception to this rule. With a 5.9% dividend yield and a quarterly dividend at $0.87, it is considered a high-yield stock.
With its promising growth pipeline, Exxon Mobil expects to grow its production to 3.7 million barrels per day by 2025. In addition, it has allocated billions of dollars in the past few years to capital expenditures to support future growth. But apart from its growth opportunities, the company also has several competitive advantages. It has tremendous scale, an industry-leading balance sheet, while it has a credit rating of AA+.
Interested to invest? Buy XOM stock on Moneybase Invest.
Colgate-Palmolive Company (CL)
Specialised in the production, distribution and provision of household, health care, personal care and veterinary products, Colgate-Palmolive was established in 1806, making it one of the oldest companies in the US stock market. Founded by William Colgate originally as a starch, soap and candle business in New York City, today the multinational consumer products company has become a global giant with a product portfolio that includes major brands such as Colgate, Palmolive, Hill’s Science Diet and many more.
In the end of January 2021, the company reported fourth quarter and full-year earnings, with results coming in ahead of expectations on the top and bottom lines. Total revenue was up 7.5% year–over–year during Q4 to $4.3 billion, as organic sales growth was strong. Indeed, the company reported organic sales growth of 8.5% in Q4, far exceeding the consensus of +5.4%. With a long history of dividend increases thanks to its strong brands and dominant position across multiple product categories, Impressively, Colgate-Palmolive has managed to pay uninterrupted dividends since 1895.
As emerging markets and its high-growth pet business continue to be two key growth catalysts, the company is set to maintain its title of being a Dividend Zombie for many more years to come.
Add CL stock to your portfolio.
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Looking for other investment ideas? Have a look at this list of top stocks worth considering for your portfolio.
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