These are impressive companies to research, because they have been able to overcome several wars, several recessions, high inflation, oil price shocks, and multiple booms and busts. This is a testament to the business models which continued to chug along, uninterrupted by outside competitive forces, delivering goods and services to customers that valued them. Against all odds, these companies managed to grow earnings, and then reward their patient long-term shareholders with a dividend raise for over half a century.
The common denominator behind each of those companies is a participant in an industry that is characterized by slow change. The list of dividend kings has increased from ten companies in 2010 to twenty this year.
The newest addition was ABM Industries (ABM), which raised its dividend last week. ABM Industries has managed to increase dividends for 50 years in a row. Another new addition in 2016 was Tootsie Roll (TR). The company with the longest streak of annual dividend increases is water utility American States Water (AWR), which has managed to raise dividends to shareholders for 62 years in a row.
I would expect the list to expand by six more companies in 2017 if everything goes according to plan with dividend increases. The companies to watch for potential inclusion include California Water Service (CWT), Federal Realty Investment Trust (FRT), SJW Corp (SJW), Stanley Black & Decker (SWK), Stepan Company (SCL) and Target (TGT).
The companies include:
Name
|
Symbol
|
Industry
|
Consecutive Years of Annual Dividend Increases
|
Dividend Yield
|
10-yr Dividend Growth
|
Forward P/E
|
3M Company
|
(MMM)
|
Conglomerate
|
58
|
2.50%
|
9.33%
|
21.7
|
American States Water
|
(AWR
|
Utility-Water
|
62
|
2.16%
|
6.86%
|
27.7
|
Cincinnati Financial
|
(CINF
|
Insurance
|
56
|
2.54%
|
4.59%
|
23.6
|
Coca-Cola Company
|
(KO
|
Beverages-Non-alcoholic
|
54
|
3.35%
|
8.95%
|
21.8
|
Colgate-Palmolive Co.
|
(CL
|
Personal Products
|
53
|
2.35%
|
10.45%
|
23.6
|
Dover Corp.
|
(DOV
|
Machinery
|
61
|
2.30%
|
11.52%
|
24.9
|
Emerson Electric
|
(EMR
|
Industrial Equipment
|
60
|
3.40%
|
8.35%
|
23.1
|
Farmers & Merchants Bancorp
|
(FMCB
|
Banking
|
52
|
2.05%
|
5.35%
|
18.4
|
Genuine Parts Co.
|
(GPC
|
Auto Parts
|
60
|
2.68%
|
6.94%
|
21.4
|
Hormel Foods Corp.
|
(HRL
|
Food Processing
|
51
|
1.99%
|
14.42%
|
20.4
|
Johnson & Johnson
|
(JNJ
|
Drugs/Consumer Prod.
|
54
|
2.88%
|
8.75%
|
17.2
|
Lancaster Colony Corp.
|
(LANC
|
Food/Consumer Prod.
|
54
|
1.60%
|
6.41%
|
28.5
|
Lowe's Companies
|
(LOW
|
Retail-Home Improv.
|
54
|
1.91%
|
26.14%
|
18.6
|
Nordson Corp.
|
(NDSN)
|
Machinery
|
53
|
1.01%
|
10.81%
|
22.7
|
Northwest Natural Gas
|
(NWN)
|
Utility-Gas
|
61
|
3.28%
|
3.46%
|
27.6
|
Parker-Hannifin Corp.
|
(PH
|
Industrial Equipment
|
60
|
1.76%
|
15.96%
|
20.9
|
Procter & Gamble Co.
|
(PG
|
Consumer Products
|
60
|
3.16%
|
9.22%
|
21.9
|
Tootsie Roll Industries
|
(TR
|
Confectioner
|
50
|
0.95%
|
3.79%
|
36.7
|
Vectren Corp.
|
(VVC
|
Utility-Electric/Gas
|
57
|
3.20%
|
2.61%
|
20.9
|
ABM Industries Inc.
|
(ABM
|
Business Services
|
50
|
1.50%
|
4.30%
|
21.8
|
These companies are not automatic buys however. In order to consider a company for further research, I would require:
1) At least a ten year streak of annual dividend increases
2) A P/E below 20
3) A dividend payout ratio below 60%
4) An annual earnings per share growth over the past decade
5) A consistent rate of annual dividend growth over the past decade
Based on this information, the companies for further research include Johnson & Johnson (JNJ), Hormel (HRL) and Lowe’s (LOW).
Most of the other dividend kings appear overvalued today.
You can find a historical compilation of dividend kings by following the links below:
Dividend Kings for 2016
Dividend Kings List for 2015
The Dividend Kings List for 2014
The Dividend Kings List Keeps Expanding in 2013
Eleven Dividend Kings, Raising dividends for 50+ years
Ten Dividend Kings raising dividends for over 50 years
Full Disclosure: Long JNJ, LOW, MMM, KO,CL, EMR, GPC, PG