Through recessions and economic booms, over decades of market volatility, only eight companies in the S & P 500 have hiked their annual dividends year-in and year-out for at least 60 years. Given the recent turmoil across the banking sector and increased fears of a broader economic downturn, investors seeking to pocket steady income can turn to these companies, which are the most reliable of a group known as “dividend aristocrats.” Many of these companies are well known household names like 3M , Coca-Cola , Colgate-Palmolive , Johnson & Johnson and Procter & Gamble . But the group also includes industrial conglomerate Dover , manufacturing giant Emerson Electric and auto parts maker Genuine Parts . “These companies have had management that have been able to change with the times and adapt to new competition, new technology,” said Howard Silverblatt, senior index analyst at S & P Global Dow Jones Indices. “Companies who have increased for so many years — and this goes for not just 60, but also 10 years — it becomes part of their cultures and they increase even when they can’t.” Take Coca-Cola. It pays an annual dividend of $1.84 per share, and currently has a dividend yield of 3.07%, while the S & P 500’s average dividend yield is 1.65%. The Atlanta-based beverage giant has been using a two-pronged strategy to boost sales by raising prices, while still marketing more affordable products to lower-income customers. The company has also rolled out new drink flavors in recent years and various low-sugar products , such as Coke Zero and Diet Coke, for consumers that have begun to seek out healthier options. Last year, Coca-Cola’s revenue rose 11% to $43 billion , driven by 11% growth from product mix and pricing. In February, Citi analyst Filippo Falorni named Coke one of his top buy-rated picks, saying the company emerged from the pandemic in a much stronger position . Meanwhile, Dover has increased its dividend for 67 years — nearly every year since its inception in 1955. The Illinois-based company offers has a dividend yield of 1.48%. Over the years, it has completed numerous acquisitions into highly consolidated end markets , including in retail refrigeration equipment, industrial printing and clean energy. As of Friday’s close, Dover’s stock is up nearly 1% this year. Mizuho Securities reiterated its buy rating on the stock earlier this month after Dover’s investor day, touting the company’s opportunities to grow its sales. “DOV has an underappreciated portfolio,” analyst Brett Linzey wrote, as he set a $165 price target on the stock. DOV 5Y mountain Shares of the industrial giant have lost more than 9% this month. While this group forms an exclusive club, it’s worth recognizing other long-time dividend payers. Manufacturing company Stanley Black & Decker and food and beverage giant PepsiCo have raised their annual dividends for more than 50 years. ExxonMobil and Chevron have hiked their annual dividends for 40 and 36 years, respectively. Companies in the S & P 500 paid out $564 billion in dividends in 2022, a 10% increase from 2021 and a record payout by far, according to S & P Global. Disappointed by the price declines in equities, investors last year piled into ETFs that specialized in paying dividends — a trend that is likely to continue this year. Silverblatt said he expects U.S. cash dividends to again reach a new all-time high in 2023, but that growth will see a definitive slowdown, likely at half of its rate last year. “As far as the cash dividends, we will have a record, even if companies fail to increase. They actually have to pull back in order to not have a record this year,” said Silverblatt. Based on the current dividend rate, with no additional increases or decreases, Silverblatt expects cash payments for 2023 to increase 3.9% over 2022. There were 73 dividend increases and 4 decreases last month, compared with February 2022’s 71 increases and 2 decreases, he said.
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