Income investors shouldn't fret over who's in the White House
Dividend stocks are on fire right now, and there are plenty of
companies that will continue to kick money back to shareholders
regardless of whether
Barack Obama or Mitt Romney
is in office the next four years.
With certificates of deposit, money-market accounts and U.S.
Treasuries basically worthless thanks to the Federal Reserve's
steadfast insistence on keeping interest rates near zero,
investors are flocking to dividend stocks like never before. And
dividend payers are rewarding the burgeoning masses with more
generous payouts than ever before.
Dividend payouts are up 16% in 2012, according to
The Wall Street Journal
. In fact, the recently completed third quarter set a new record
for dividend payouts. This comes on the heels of 2011, when
companies listed on the S&P 500 paid a combined $240.6
- the highest total since 2008.
Some dividend payers will have a longer shelf life than
others, of course. If Romney wins the election,
Fed chief Ben Bernanke's
days are almost certainly numbered - Romney said so himself. No
Bernanke could mean doing away with near-zero interest rates,
which may convince some income investors to drop their dividend
stocks and dive back into CDs and MMAs.
But some dividend stocks are evergreen. Their payouts have
been growing annually for decades - regardless of election
results, recessions, inflation rates, fiscal cliffs, European
debt problems, Federal Reserve chairmen, the Boogeyman, the Grim
Reaper and other real or imagined market drivers.
To certain companies, all these headline-making events fall
under the category of "just noise" - as my colleague
likes to call it.
Here are four companies able to tune out all the noise
and grow their dividends regardless of which party is in
Johnson & Johnson (
The consumer staple/pharmaceutical company has increased its
dividend every year since 2002. Its recent dividend hike in May
brought the quarterly payout to $0.61 per share - more than
double the payout from eight years ago. With a current yield of
3.6%, Johnson & Johnson is one of the more generous,
reliable dividend payers on the market.
The largest fast-food chain in the world will increase its
dividend a whopping 10% this December. The new
77-cents-per-quarter payout will bring McDonald's yield to
3.3%. Granted, the stock's 6% decline this year makes that
yield look a bit shinier. But this is a company that has upped
its dividend by an average of 20% a year since the 2008
recession. It occupies a space that offers cheap food worldwide
in the midst of a struggling global economy. As long as those
struggles continue, McDonald's should flourish.
Telecommunications is one of the fastest growing industries in
the world. So it's no surprise that telecommunications stocks
are perhaps the most generous dividend payers on the market.
Telecommunications companies offered the highest yield rate of
all S&P 500 stocks in 2011, at 5.9%. And no
telecommunications company is bigger than AT&T. The company
offers its shareholders a yield of nearly 5%, and the dividend
has grown steadily every year since 2004. Other
telecommunications companies may offer higher yields. But
AT&T is an established, blue-chip company that has offered
generous dividends for years.
Procter & Gamble (NYSE:
This is a company designed to profit even if the world were
coming to an end. If the Apocalypse was upon us, people would
no doubt load up on Duracell batteries, Crest toothpaste,
Pampers and Pepto-Bismol. Those are just four of P&G's
dozens of varied brands. People need those products in any
economy - under any president. That's how P&G has managed
to increase its dividend for
56 straight years.
The current yield is 3.3%, with a quarterly payout of $0.56 per
share. If any stock is completely unaffected by the upcoming
election, this is it.
Next month's election is important. Whether
or Obama wins, the outcome will have far-reaching implications
for many investors.
But for those of you who want to limit your exposure to the
whims of the American voter, it's not a bad idea to play it safe
by investing in blue-chip dividend stocks with a long history of
returning money to their shareholders.
These four companies are a good place to start.