Unfortunately, I cannot predict the future. I do know however, that investors become successful only after they find a niche that gives them an edge in their quest for long term wealth accumulation. My niche is dividend growth stocks. These companies have managed to boost earnings and dividends for many decades, through recessions, wars, oil embargoes and double digit inflationary periods. The companies I invest in typically provide consumers in every continent with products or services they use on a daily basis. No matter what happens with the economy, people will still do grocery shopping, and spend on basic needs. This makes the business model for most of the stocks I focus on very defensive in its core.
Some of the best companies to own in 2012, make great acquisitions that I plan to hold for several decades. I mostly sell only when one of these three events occurs. The one prediction I will make is that the following companies will boost their dividends in 2012, as they have previously done for years before.
Johnson & Johnson (JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company has raised distributions for 49 years in a row. The 10 year annual dividend growth rate is 13%/year. The last dividend increase was 5.60% to 57 cents/share. Analysts are expecting that Johnson & Johnson will earn $5.24/share in 2012. I expect that the quarterly dividend will exceed 61 cents/share in 2012. Yield: 3.50% (analysis)
The Procter & Gamble Company (PG) provides consumer packaged goods in the United States and internationally. The company has raised distributions for 55 years in a row. The 10 year annual dividend growth rate is 10.90%/year. The last dividend increase was 9% to 52.50 cents/share. Analysts are expecting that Procter & Gamble will earn $4.20/share in 2012. I expect that the quarterly dividend will be increased to 57 cents/share in 2012. Yield: 3.20% (analysis)
McDonald’s Corporation (MCD), together with its subsidiaries, operates as a foodservice retailer worldwide. The company has raised distributions for 35 years in a row. The 10 year annual dividend growth rate is 26.50%/year. The last dividend increase was 14.75% to 70 cents/share. Analysts are expecting that McDonald's will earn $5.73/share in 2012. I expect that the quarterly dividend will reach 77 cents/share in 2012. Yield: 2.80% (analysis)
PepsiCo, Inc. (PEP) engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. The company has raised distributions for 39 years in a row. The 10 year annual dividend growth rate is 13%/year. The last dividend increase was 7.30% to 51.50 cents/share. Analysts are expecting that PepsiCo will earn $4.65/share in 2012. I expect that the quarterly dividend will reach 55 cents/share in 2012. Yield: 3.20% (analysis)
Colgate-Palmolive Company (CL), together with its subsidiaries, manufactures and markets consumer products worldwide. The company has raised distributions for 48 years in a row. The 10 year annual dividend growth rate is 12.40%/year. The last dividend increase was 9.40% to 58 cents/share. Analysts are expecting that Colgate Palmolive will earn $5.52/share in 2012. I expect that the quarterly dividend will be raised to 64 cents/share in 2012. Yield: 2.60%(analysis)
Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of health care products worldwide. The company has raised distributions for 39 years in a row. The 10 year annual dividend growth rate is 8.80%/year. The last dividend increase was 9.10% to 48 cents/share. Analysts are expecting that Abbott will earn $5.03/share in 2012. I expect that the quarterly dividend will be raised to 52 cents/share sometime in 2012. Yield: 3.40% (analysis)
Kimberly-Clark Corporation (KMB), together with its subsidiaries, engages in the manufacture and marketing of health care products worldwide. The company has raised distributions for 39 years in a row. The 10 year annual dividend growth rate is 9.20%/year. The last dividend increase was 6.10% to 70 cents/share. Analysts are expecting that Kimberly-Clark will earn $5.25/share in 2012. I expect that the quarterly dividend will be raised to 74 cents/share sometime in 2012. Yield: 3.90% (analysis)
3M Company (MMM), together with subsidiaries, operates as a diversified technology company worldwide. The company has raised distributions for 53 years in a row. The 10 year annual dividend growth rate is 6.10%/year. The last dividend increase was 4.80% to 55 cents/share. Analysts are expecting that 3M will earn $6.33/share in 2012. I expect that the quarterly dividend will be raised to 57.50 cents/share sometime in 2012. Yield: 2.60% (analysis)
Kinder Morgan Energy Partners, L.P. (KMP) owns and manages energy transportation and storage assets. This MLP has raised distributions for years in a row. The 10 year annual distribution growth rate is 10.90%/year. Kinder Morgan raised its quarterly distributions by 4.50% to $1.16/unit in 2011. I expect that the distribution will grow to $1.21/unit by the end of 2012. Yield: 5.60% (analysis)
Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has raised distributions since the spin-off from Altria Group in 2008. The last dividend increase was 20.30% to 77 cents/share. Analysts are expecting that Philip Morris International will earn $5.22/share in 2012. I expect that the quarterly distribution will reach 85 cents/share in 2012. Yield: 3.90% (analysis)
Wal-Mart Stores, Inc. (WMT) operates retail stores in various formats worldwide. The company has raised distributions for 37 years in a row. The 10 year annual dividend growth rate is 17.80%/year. The last dividend increase was 20.70% to 36.50 cents/share. Analysts are expecting that Wal-Mart will earn $4.93/share in 2012. I expect that the company will hike the quarterly distribution to 41 cents/share by the end of 2012. Yield: 2.50% (analysis)
The following companies should do well no matter what happens with the global economy in 2012. While they are defensive, they also have a growth kick that would enable them to generate the rising earnings stream to pay for the dividend increases in 2012 and beyond. Their diversified income streams, spread out globally, as well as the recurring nature of their products or services make them great long term holdings for any serious dividend investor. With an average yield of % ,and strong expected dividend growth, these stocks are a good list to add to a dividend portfolio.
Full Disclosure: Long all stocks listed above
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