4 Stocks with 40+ Years of Dividend Gains

10/27/2014 10:00 am EST


A long track record of dividend increases may be particularly welcome to investors concerned about recent market volatility. Here, Carolyn Bigda, of Kiplinger's Personal Finance magazine, highlights four lesser-known stocks that have boosted dividends for 40 or more years.

Steven Halpern: Our guest today is Carolyn Bigda of Kiplinger's Personal Finance. How are you doing today, Carolyn?

Carolyn Bigda: I am great, thanks.

Steven Halpern: Your latest article focuses on dividend aristocrats, or stocks that have increased their payout every year for a quarter century.  Given the recent market environment, I would guess this stability should be even more important than ever.

Carolyn Bigda: Yes, if you have a company that can consistently grow its dividends, that will certainly provide a list to his stock when the overall market isn't doing so well.

Steven Halpern: You focused on stocks with 25 years of rising payouts and, in fact, today, we are going to look at a handful of those on your list that have actually boosted dividends for 40 or more years.  Could we start with Becton Dickenson?

Carolyn Bigda: Sure, and, sort of, the premise behind this piece was that these are stocks of companies that a lot of investors may not be as familiar with. A lot of people know McDonald's (MCD).  

They know Coca-Cola (KO), Johnson and Johnson (JNJ), those are, sort of, the usual suspects of regular dividend increasers, but these are companies that maybe don't—quite as often—get on investors’ radars.  

It is really just because their products aren't as well known.  Becton Dickenson (BD) is a good example of this.  It kind of makes run of the mill medical supplies like syringes, IV catheters, that kind of thing, but the company has increased its dividend for 42 consecutive years.  

Today, it has a yield of about 1.7%, which is a little bit below what the S&P 500 pays out but when you have that consistent dividend growth, that is something that is very attractive.

And analysts are looking ahead to 2015 and 2016 and they are expecting earnings to rise 9% in both years.  That should give investors confidence that the company can continue to increase those dividends going forward too.

Steven Halpern: Another company on your list, that, as you say, doesn't have a household name, is Dover (DOV) and that firm has increased its dividend for 59 consecutive years.  Could you tell us a little about that?

Carolyn Bigda: Yes, almost six decades of dividend increases.  It is impressive. It is an industrial company.  It makes components and parts such as oil and gas drilling equipment, plastic tube connectors, things that the everyday consumer isn't really paying attention to.  

The company is having a good year despite some uneven global economic growth.  It reported that orders in the first half of 2014 increased an average of 8% across the four main segments of business.  It is doing well despite any sort of economic problems going on in the world.  

Over the past five years, it has been increasing its payout at an annualized rate of 9% so it is doing quite well.  The yield now is currently about 2.2%. Again, another just, sort of, steady dividend grower.

Steven Halpern: Just behind that in terms of longevity there is another company that has had consecutive dividend increases for 58 years and that is Genuine Parts (GPC). What is the attraction there?

Carolyn Bigda: Well, here the dividend yield is even higher.  It is 2.7% so that alone is very appealing.  Genuine Parts has a good business model as well.  It held up fairly well even during the financial crisis.  

Its main business is wholesale distribution of car replacement parts through the Napa Auto Chains and so, during the recession, a lot of people decided not to buy new cars.  They wanted to repair their old cars and so the business did quite well, but even since then, Genuine Parts’ sales have been steadily improving.  

It has good growth potential and also has been raising its dividend, as you said, for 58 years.  The way this was 7% this year—the dividend increase was—so it is a pretty reliable business, but also a reliable dividend grower.

Steven Halpern: Finally, we are going to look at another company that may not be a household name, but you know that a lot of people are probably familiar with its products. That is VF Corp. (VFC). Can you tell us about that?

Carolyn Bigda:  Yes, this is an apparel manufacturer and they own more than 30 brands.  A lot of them are very popular brands, The NorthFace, Timberland, Wrangler and this company has been doing very well recently because of the, sort of, growing increase by consumers in active wear.  

The NTD Group reported that sales in active wear, industry wide, were up 9% last year compared with just 2% for overall apparel.  Active wear is really popular and VF Corporation is benefiting from that.  

They have been raising their dividend now for 41 consecutive years.  It has a yield today of 1.6% so not especially big in terms of the yield, but its increases are really impressive.  It lifted dividend last year by 21% so you are getting big dividend increases and it is a very solid company.

Steven Halpern: Well, we really appreciate you taking the time to talk with us.  Thank you.

Carolyn Bigda: My pleasure.

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