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Tuesday, December 22, 2020

Dividend Kings List for 2021

A dividend king is a company that has managed to increase dividends to shareholders for at least 50 years in a row.

There are only 30 such companies in the US, and perhaps a couple more in the rest of the world. It is not a small achievement to have been able to reward long-term shareholders with a dividend raise for over half a century.

Over the past 50 years, some calamities experienced include:

- Seven Recessions since 1967
- The Vietnam War
- The oil crisis in the 1970s
- Stagflationary 1970s
- Double digit interest rates in the 1980s
- Fall of the Soviet Union in 1991
- 9/11 in 2001
- The Dot-com bubble bursting in 2000
- The housing bubble bursting in 2007 - 2008
- ZIRP and NIRP since 2009

- The Covid-19 Pandemic


Throughout this calamity each of those businesses managed to grow earnings, and raise the dividend to their long-term shareholders. If you are looking for a long-term shareholder base, the best way to build it is by paying those owners more every single year. This is a simple, but novel idea for corporations to embrace.

We had two new additions to the list in 2020. There were no companies that left the list. These actions brought the number of companies to 30, from 28 at the end of 2019. This is a record since we started tracking the list of dividend kings in 2010.

When I first came up with the idea for the list of dividend kings in 2010, there were only eleven companies on it. While our 2020 list includes 30 companies, 

Last year, I had to remove Target, since its streak of annual dividend increases was only 49 years. I am pretty confident that the retailer will hit 50 years in a row by next year. Other websites show Target as a dividend king, when its press releases and the dividend history on its website show a 49 year track record of annual dividend increases.

The new addition for the current year include:

Black Hills Corp (BKH)
MSA Safety (MSA)

These were consistent with my predictions from last year. It is a testament to the predictable nature of their businesses, not in my forecasting abilities.

I expected to add National Fuel Gas (NFG) for this year's list. However, upon further research, I realized that it has only raised dividends for 49 years in a row. That's because the company failed to raise dividends in 1970.

I did some research on historical changes of the Dividend Kings list, which you may find interesting. I reviewed the evolution of the dividend kings prior to 2007 in the article, which has not been done by anyone else. 

Since 2010, there have been only two companies that have left the list. One, Vectren (VVC) was acquired. The second, Diebold (DBD), kept dividends unchanged, but ultimately ended up cutting them.

The companies in the 2020 dividend kings list include: 

Note: The prices and yields are as of November 30, 2020

Company Name

Symbol

Sector

Years Dividend Increases

10 Year Annualized Dividend Growth

Dividend Yield

Share Price

ABM Industries Inc.

ABM

Industrials

53

3%

1.92%

      38.50

American States Water

AWR

Utilities

66

9%

1.82%

      73.82

Black Hills Corp.

BKH

Utilities

50

4%

3.72%

      60.83

Commerce Bancshares

CBSH

Financials

52

6%

1.64%

      65.96

Cincinnati Financial

CINF

Financials

60

4%

3.14%

      76.35

Colgate-Palmolive Co.

CL

Consumer Staples

57

7%

2.06%

      85.64

California Water Service

CWT

Utilities

53

3%

1.72%

      49.48

Dover Corp.

DOV

Industrials

65

9%

1.62%

    122.03

Emerson Electric

EMR

Industrials

64

4%

2.63%

      76.82

Farmers & Merchants Bancorp

FMCB

Financials

58

3%

2.06%

    726.96

Federal Realty Inv. Trust

FRT

Real Estate

53

5%

4.86%

      87.22

H.B. Fuller Company

FUL

Materials

51

9%

1.24%

      52.33

Genuine Parts Co.

GPC

Consumer Discretionary

64

7%

3.21%

      98.37

Hormel Foods Corp.

HRL

Consumer Staples

54

16%

2.08%

      47.18

Johnson & Johnson

JNJ

Health Care

58

7%

2.79%

    144.68

Coca-Cola Company

KO

Consumer Staples

58

7%

3.18%

      51.60

Lancaster Colony Corp.

LANC

Consumer Staples

58

9%

1.77%

    169.33

Lowe's Companies

LOW

Consumer Discretionary

58

19%

1.54%

    155.82

3M Company

MMM

Industrials

62

11%

3.40%

    172.73

Altria Group Inc.

MO

Consumer Staples

51

10%

8.64%

      39.83

MSA Safety Inc.

MSA

Industrials

50

6%

1.15%

    149.44

Nordson Corp.

NDSN

Industrials

57

15%

0.77%

    203.81

Northwest Natural Gas

NWN

Utilities

65

2%

4.01%

      47.92

Procter & Gamble Co.

PG

Consumer Staples

64

6%

2.28%

    138.87

Parker-Hannifin Corp.

PH

Industrials

63

13%

1.32%

    267.26

Stepan Company

SCL

Materials

53

9%

1.05%

    116.16

SJW Corp.

SJW

Utilities

53

6%

1.95%

      65.60

Stanley Black & Decker

SWK

Industrials

53

8%

1.52%

    184.31

Tootsie Roll Industries

TR

Consumer Staples

52

4%

1.16%

     30.97



There are eight companies which are set to potentially join the elite list of dividend kings by the end of 2020. These companies have a 49 year record of annual dividend increases:

National Fuel Gas (NFG)
Illinois Tool Works (ITW)
Target (TGT)
Universal Corp (UVV)
Becton Dickinson (BDX)
W.W. Grainger (GWW)
PPG Industries (PPG)
Tennant (TNC)

A few companies like Target and Illinois Tool Works will be ready to join in 2021. Same goes for Universal Corp.

This track record is a testament to the stability of the underlying businesses that generated the earnings growth necessary to grow the dividend for half a century (and longer). This track record is an indication of a business that is relatively immune to outside shocks. This resilience throughout the period manifests itself into the long stretch of dividend increases, spanning over half a century.

While these companies are not investment recommendations, I post them as examples for further study by serious dividend investors. Studying the businesses, their industries, could give you clues as to the type of business that can flourish over a half of a century.

The chart below shows the historical performance of the Dividend Kings list since 2007. I will update the data by the end of 2020.

If you had invested an equal amount in the dividend kings list starting at the end of 2007, and made updates along the way, along with re-balancing annually to an equal weighted position, you would have done well. The dividend kings list did better than S&P 500 over time, although it did not best it every single year.






As I mentioned above, I have been compiling the list of dividend kings since 2010. To view the historical changes in the list, please follow the links below:

Dividend Kings List For 2019








Thank you for reading!

PS Note that Parker-Hannifin's track record is based upon dividend payments for its Fiscal Year rather than the Calendar Year. The fiscal year runs from July 1 to June 30.

Therefore, the FY 2015 dividend was $2.37/share ( one dividend payment of 48 cents/share plus three dividend payments of 63 cents/share).
The FY 2016 dividend was $2.52/share ( four dividend payments of 63 cents/share)
The FY 2017 dividend was $2.58/share ( two dividend payments of 66 cents/share plus two dividend payments of 63 cents/share)

Because of the use of Fiscal Years, rather than Calendar Years, I excluded Parker - Hannifin from the first list of dividend kings that I compiled in 2010.

Update: 06/17/2018

In early 2018 I listed Target as a dividend king incorrectly with a 50 year history of annual dividend increases. Upon reviewing the dividend history for Target on the company’s investor relations website, I agree that it has only managed to boost distributions for 49 years in a row ( which is not a small achievement either). Therefore, I am downgrading it back to dividend champion status. Hopefully in three years it can become a dividend king. The lesson for this paragraph is to trust, but always verify the numbers you see. In addition, you should always do your own research and only invest in what makes sense for you. Blindly following others is frequently a mistake

Note 01/14/2021 - I had originally listed Sysco as dividend king. Upon further review of their dividend history, I realized they only have 44 years of consecutive annual dividend increases under their belt. They would be eligible for inclusion in 2026. They kept dividends unchanged in 1975 and 1976.
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