There are no "sure things" in stock investing. Even companies
that have been in business for decades can find themselves going
under beaten by new competitors, changes in technology or just
But there are ways to reduce the risk. Instead of buying a company
with high growth and a triple digit P/E, you could buy a more
One factor that can make a company a more conservative pick is if
it pays a dividend. There's a reason some investors thought the
world had ended when Apple started to pay a dividend. Some think
the paying of a dividend means the end of a company's growth phase.
Basically, a dividend equals "boring."
A Dividend Is A Clue
But the dividend can be an important clue when looking for stocks.
The thinking goes that if a company pays a dividend, that is real
cash that has to be sent out to shareholders. A company can't fake
that. Either it has the money or it doesn't.
It's not that easy to pay a dividend every quarter, year after
year, for decades. Things happen. There are recessions, bad product
decisions, cycles in an industry, black swan financial events and
management hi jinks.
When a company is able to do it, then, it becomes even more
impressive. Take chemical giant DuPont. It has paid a dividend
every single quarter since 1904. That's 434 consecutive quarters.
Apparently the only sure things in life are death, taxes and
The Dividend Aristocrats
But there's an even higher standard than just consistent dividends.
Some companies keep raising them year after year.
Standard & Poor's runs an index called the "Dividend
Aristocrats." These are companies in the S&P 500 that have not
only paid a dividend every year for the past 25 years but have also
increased that dividend every year during that time.
Yes, that includes the Great Recession years.
In 2009 and 2010, many companies couldn't handle the pressures of
the economic downturn. They might have kept their dividends, but
they were slashing them or keeping them where they were at. Fewer
were raising them for obvious reasons.
The number of companies in the Aristocrats fell to 42 in 2010 from
52 in 2008. That was the lowest number in the last 5 years.
But by 2012, the number had moved higher and was again at 52
3 Companies That Raised Their Dividends Again In
Just because a company has raised its dividend 25 years in a row,
doesn't mean it will keep doing so. But these 3 companies have
already announced their 2013 increases, extending their recent
The Coca-Cola Company
Archer Daniels Midland
Forget about raising the dividend for 25 years in a row. What about
On Feb 21, the world's largest beverage maker announced it was
raising its dividend 10% to 28 cents a quarter. The dividend is
payable on Apr 1 to shareholders of record as of March 15.
Coke has raised its dividend every year since 1963. It currently
Coca-Cola is a Zacks Rank #3 (Hold). Earnings are expected to grow
6.6% in 2013.
The Sherwin Williams Company
Sherwin-Williams was founded in 1866, just after the Civil War. It
paid its first dividend to shareholders in 1885 and it has
continued to reward shareholders ever since.
On Feb 13, Sherwin-Williams announced its 35th consecutive dividend
increase. Jimmy Carter was President when that streak began.
It increased it 28% to 50 cents per share. It is payable on Mar 8
to shareholders of record as of Feb 25. It currently yields 1.3%.
Sherwin-Williams is also a Zacks Rank #3 (Hold). Earnings are
expected to grow 19.2% in 2013.
Archer Daniels Midland Company
Archer Daniels Midland was founded in its current incarnation in
1923. The "supermarket to the world" has paid a dividend every
quarter since 1932. Even the struggles of the 1930s and World War
II didn't stop it from rewarding shareholders.
It has raised it every year over the last 25 years. On Feb 6, ADM
announced a 8.6% increase to 19 cents per share. This is a yield of
Archer Daniels Midland is yet another Zacks Rank #3 (Hold) stock.
But it also is expected to see double digit earnings growth of 15%
in 2013. Not too shabby for a century old company.
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ARCHER DANIELS (ADM): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
SHERWIN WILLIAM (SHW): Free Stock Analysis
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