5 stocks that have increased dividends for more than 34 years in a row
Raising a dividend once is easy. Raising it every year through recessions, financial crises, a pandemic, and the sharpest interest rate hikes in a decade is something only a handful of companies can do. But such a streak alone doesn't tell you whether the stock is a good investment today. We looked at 5 companies from 5 different sectors that have been increasing shareholder payouts for at least 3 decades, and at what the numbers that ordinary screeners distort reveal about them.
Key points
Five companies have increased dividends for more than 30 years in a row. They have overcome financial crises, recessions, and a pandemic. But does such a history really mean a safe investment?
A dividend yield of almost 10% may look like an extraordinary opportunity. At one of these companies, however, ordinary screeners show a number that can significantly mislead investors.
The longest dividend history does not necessarily mean the fastest payout growth. The differences among these five companies are much larger than they appear at first glance.
A high payout ratio may look like a warning of a dividend cut. In some sectors, however, traditional accounting metrics fail to capture the true financial situation at all. In this analysis, we look for real context.
Even more than 30 years of continuous dividend growth does not guarantee the same story will continue. At one of the companies, a fundamental change is approaching that could overturn an investor's entire dividend strategy.
A dividend streak is one of the strongest signals a company can send to the market. Management that has increased payouts for 30 consecutive years cannot afford short-term experiments with the balance sheet. Every increase is a public commitment, and breaking it is punished by the market far more harshly than the cash saved would warrant. That is why companies with long streaks tend to be conservatively financed, have predictable cash flows, and management that plans in years, not quarters.
But the length of the streak is a measure of history, not the future. Investors should be interested primarily in three things:
what the dividend is paid from,
how much room is left for further increases,
and whether the stock price is getting ahead of fundamentals.
For all five companies in this overview, a first look at the screener leads to wrong conclusions. Once because of an accounting metric that makes no sense for the sector, next because of special payouts, and third because of an ongoing merger.
Do these companies have what it takes to attract investors?