People seeking stable income prefer companies with a long history of dividend distributions. They choose the highest dividend paying stocks and securities with significant growth potential in cash flow. This is one of the popular strategies among long-term investors – the dividend growth model.
Below are the 10 most reliable payers of the dividends for December 2024. All of them are highly likely to increase their dividend payments to shareholders.
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How do you find the best dividend stocks to buy?
Top dog brokers provide clients with following table lists of the 50 highest dividend yield stocks as well as top dividend ETFs. Such selections are also available on specialized dividend resources (for example, dividend.com).
Investors can find the best dividend stocks themselves using the dividend stock screens from BeatMarket.
Next, it is essential to check the reliability of the selected dividend shares. To do this, they evaluate:
- The period during which the payer of the dividends has raised dividends.
- The dividend payout ratio, with a value above 80% being a negative factor.
- Financial stability (credit rating, debt-to-earnings ratio, etc.).
- Competitive advantages. They determine the prospects for growth in net income. This, in turn, influences the growth of dividend income for shareholders.
Dividend Increases: A Barometer for Economic Growth and Stability
Regular dividend payments indicate a high level of economic stability. They show that even during periods of crisis, the company maintains an effective business model. That is, it generates net income or has sufficient cash reserves to support its cash flow.
However, inclusion in the list of the best long-term dividend stocks is not a 100% guarantee of income preservation. Even trustworthy dividend payers may slash their dividends when facing business challenges.
An example is AT&T. This issuer reduced the dividends paid per share. The company had been paying dividends since 1984 and had raised its dividends annually. But in 2023, shareholder rewards were nearly halved.
Top 10 Highest Yielding Dividend Kings Now
Dividend aristocrats are companies that have increased their dividends for at least 25 consecutive years. To be included in this list, a stock must also be part of the S&P 500 and have sufficient trading volume.
Dividend kings are companies that have paid dividends for 50 consecutive years or more, while consistently rising dividends. As of December 2024, there are 54 stocks referred to as kings. Usually, companies pay a quarterly dividend and increase its amount once a year.
Below is a list of best dividend stocks from various sectors of the economy. They have raised their dividends for more than five decades consecutively. These stocks you can buy on the largest exchanges in the U.S. They are also stocks available on any major exchange companies in the world.
1. Abbott Laboratories (ABT)
Abbott Laboratories is a chemical and pharmaceutical company that has been operating since 1888. Its primary areas of focus are pharmaceuticals and diagnostic equipment. Additionally, ABT manufactures formulas for infant feeding and for patients in serious conditions, as well as products for diabetics.
- Annualized dividend — $2.2.
- Yield — 1.9%.
- Dividend raise over 5 years — 82%.
- Payout Ratio — 48.67%.
- Year of dividend increase — 53 years.
2. PepsiCo (PEP)
PepsiCo is a leader in the global food industry, primarily focusing on non-alcoholic beverages and snacks. The company was founded in 1898 and generates approximately half of its revenue from sales in the United States.
- Annualized dividend — $5.42.
- Yield — 3.43%.
- Dividend raise over 5 years — 38%.
- Payout Ratio — 67.04%.
- Consecutive dividend increase years — 53.
3. Lowe’s Companies, Inc. (LOW)
Lowe’s is the owner of more than 2,000 retail stores specializing in building materials and home improvement products. The majority of its operations are concentrated in the United States, and it also has retail locations in Canada.
- Annualized dividend — $4.6.
- Yield — 1.69%.
- Dividend raise over 5 years — 142%.
- Payout Ratio — 38.07%.
- Сonsecuens increase — 52 years.
Since 2010, the dividend per share has increased more than 10 times. However, these dividend active stocks today are under significant pressure from online trading.
4. Altria Group (MO)
Altria Group was founded in 1860. In addition to tobacco and cigarettes, the company offers products for the treatment of smoking-related diseases. MO shows growth in sales and operating profit. Over the year, the share price has increased by more than a third. However, the stock remains undervalued.
- Annualized dividend — $4.08.
- Yield — 7.12%.
- Dividend raise over 5 years — 28%.
- Payout Ratio — 78.88%.
- Сonsecuens increase — 56 years.
Altria Group has the highest yield of dividends among the presented stocks.
5. Procter & Gamble (PG)
Procter & Gamble offers a wide range of consumer goods. These include personal care products, cosmetics, laundry and cleaning products, and baby care products. The business was established in 1837. The company has been paying shareholders a dividend since 1891. The consecutive dividend hikes have been ongoing since 1955. Half of the revenue comes from the United States and Canada, while about 20% comes from European countries.
- Annualized dividend — $4.03.
- Yield — 2.32%.
- Dividend raise over 5 years — 31%.
- Payout Ratio — 59.22%.
- Сonsecuens increase — 69 years.
Procter & Gamble is the leader of the presented list of reliable dividend companies in terms of the length of its streak of dividend increases.
6. Johnson & Johnson (JNJ)
Johnson & Johnson is a leading manufacturer of medical devices. Its interests also include over-the-counter products, bandages, sanitary products, and personal care items. The company has a history dating back to 1886.
- Annualized dividend — $4.96.
- Yield — 3.32%.
- Dividend raise over 5 years — 33%.
- Payout Ratio — 47.95%.
- Сonsecuens increases — 63 years.
In our list, Johnson & Johnson ranks second in terms of the duration of its consecutive dividend increases.
Additionally, JNJ is one of the • dogs of the Dow stocks for fiscal 2024. This term refers to a group of dividend shares. The stocks • Dogs include the 10 highest yielding components of the Dow Jones Industrial Average. They represent the highest dividend paying mega-cap stocks.
7. RPM International (RPM)
RPM International is a manufacturer of chemical products for repairs. This includes adhesives, paints, sealants, and various protective coatings. The company also offers roofing materials. It was founded in 1947.
- Annualized dividend — $2.04.
- Yield — 1.49%.
- Dividend raise over 5 years — 31%.
- Payout Ratio — 36.77%.
- Сonsecuens increase — 51 years.
8. Target (TGT)
Target operates a network of retail stores. It offers customers beauty and hygiene products, household chemicals, clothing, footwear, and accessories, as well as kitchen items, food, and beverages. The company has been in existence since 1902. Target has approximately 2,000 locations, all of which are located in the USA.
- Annual dividend — $4.48.
- Yield — 2.87%.
- Dividend raise over 5 years — 73%.
- Payout Ratio — 47.08%.
- Сonsecuens increase — 54 years.
9. W.W. Grainger (GWW)
Grainger offers engines and equipment for lifting operations. Its product range also includes fasteners, plumbing supplies, various tools, natural gas hoses, and more. The company was founded in 1927.
- Annual dividend — $8.2.
- Yield — 0.69%.
- Dividend raise over 5 years — 36%.
- Payout Ratio — 21.31%.
- Сonsecuens increase — 54 years.
GWW is a leader in terms of Payout Ratio. The ratio is slightly above 20%. This indicates a high potential for dividend increases in the future, as well as the fact that the company has free cash available for growth.
10. Kimberly-Clark (KMB)
Kimberly-Clark is one of the global leaders in the hygiene products industry. The company offers both consumer goods and professional protective products and antiseptics. KMB has been in existence since 1872.
- Annual dividend — $4.88.
- Yield — 3.62%.
- Dividend raise over 5 years — 18%.
- Payout Ratio — 66.76%.
- Сonsecuens increase — 53 years.
Risks of Investing In Dividend Stocks Long Term
Long-term investments in common stocks that pay dividends are associated with three main types of risks:
- Reduction of cash flow or its complete cessation. This may occur due to a decline in the company’s profits due to individual issues, an industry downturn, or a recession in the overall economy. Inclusion in the S&P 500 Dividend Aristocrats Index does not guarantee that the payment of dividends would continue.
- Slow accumulation of capital. Growth companies do not pay out dividends or offer extremely low recent dividend yields. However, during bullish market periods, they can provide investors with significant returns through share price appreciation.
- Rising interest rates. During periods of high rates, deposits and bonds yield higher returns than most dividend stocks.
FAQ
What companies paid dividends for 100 consecutive years?
There are 15 companies in the American market that have paid uninterrupted dividends for over 100 years in a row. Among them are The York Water Company (YORW), which started making payments in 1816, and ExxonMobil (XOM), which has paid a dividend every year since 1882.
What stocks pay more than 6% dividend?
In December 2024, among the kings, only Altria Group, Inc. (MO) has a current dividend yield above 6%. Investors looking for the best dividends in may want to consider Verizon Communications (VZ) and Enterprise Products Partners L.P. (EPD).
What is the best historical dividend stock?
According to dividend.com, historically, the best stocks appear to be those of American States Water Co (AWR). The company has increased its dividend payments for 71 years in consequence. The 5 YR DIV CAGR is 9.08%, and the payout ratio is 56.77%. However, AWR does not have a record of dividend highs. The high dividend yield as of mid-December 2024 is 2.28%.
What companies are consistently paying dividends?
Sustainable dividends are paid by large companies that have completed the phase of active business expansion. These are financially stable issuers capable of withstanding economic crises.
Are dividend paying stocks a good investment?
Investing in dividend stocks is suitable for several strategies. The most popular one is the formation of a steadily growing cash flow. Conservative investors also tend to hold shares of dividend kings.
Can I Buy a Dividend ETF?
Dividends of best ETFs today are used for quick diversification of a portfolio. They are popular among people who do not want to spend time selecting companies. They are also suitable for beginners, as they help reduce investment risks.
Do Dividend Stocks Beat the Market?
The total return of a portfolio of highest dividend paying large-cap stocks is higher than the market average during crises. The stock price of dividend stocks is usually less volatile than growth stocks. An example is the “lost decade” (2001-2010). The S&P 500 showed negative returns, while the dividend stocks based in it yielded a profit of 1.8%.
