Income investors know that dividend stocks are one of the best sources of cash from an investment portfolio. The best dividend stocks don't just make regular payments to their shareholders, though. They also grow those payment amounts over time, rewarding longtime shareholders with rising income that helps them keep up with the cost of living.
One sign of a healthy dividend stock is that it's able to sustain a history of dividend increases year in and year out, regardless of financial conditions. Procter & Gamble (NYSE: PG), 3M (NYSE: MMM), and Coca-Cola (NYSE: KO) all have long histories of annual dividend increases that exceed half a century, and when you add up their track records, dividend investors will be ecstatic to see more than 180 years' worth of payout hikes every year among the three of them.
Clean up with this dividend stock
Consumer-products giant Procter & Gamble is a household staple around the globe, with billions of customers taking advantage of well-known products like Pampers diapers and Tide laundry detergent. P&G has many different brands that each bring in $1 billion or more of annual revenue, and for 63 years, Procter & Gamble has been able to reward its shareholders with dividend increases. With a current quarterly payout of $0.7459 per share, P&G's current yield of about 2.5% is above the overall market average.
Growth has been hard to come by for P&G, especially given tepid economic conditions in much of the world. Despite making acquisitions and divestitures to try to optimize its business, Procter & Gamble hasn't found the perfect recipe for success. Yet even as would-be disruptors try to eat into its proven business model, the Cincinnati-based consumer products giant has the expertise to shift with the times and adapt to changing conditions quickly. P&G's prospects for growth are only extra incentive to consider the dividend-paying giant for your portfolio.
A sticky stock for income investors
3M's track record of dividend excellence is almost as long as Procter & Gamble's. For 61 straight years, the Minnesota-based 3M has delivered rising dividend payments to its shareholders. That includes the 6% hike that 3M made early this year, which pushed the quarterly payout up to $1.44 per share and gives the stock a current yield of about 3.5%.
The industrial sector has gone through challenging times in 2019, and 3M hasn't been immune from cyclical pressures. The conglomerate has seen organic revenue shrink in the first and second quarter of this year, and some fear further disappointments in its coming earnings report. Yet 3M has been able to bounce back from past struggles. With a well-known reputation for innovation and good prospects in areas like healthcare and consumer goods, 3M should be able to keep its business moving forward to generate more cash for shareholders.
This dividend stock's the real thing
Coca-Cola finishes in third place in this list, with a consecutive dividend increase streak that spans "only" 57 years. Moreover, the soft drink giant's dividend growth hasn't been the strongest lately, with its most recent increase earlier this year amounting to just a single penny to $0.40 per share. Nevertheless, that's still good for a 3% yield for income investors.
Coca-Cola has had to deal with many different challenges in recent years, including competitive threats from its chief rival, criticism of its sugary soft drink product lines, and the complexities of restructuring its operations. Yet by focusing on new types of drinks -- ranging from still and sparkling water to juice, tea, and energy drinks -- Coca-Cola is still finding ways to grow. That should help support its dividend safe for the foreseeable future.
Get the full dividend experience
Just because these stocks have decades of positive dividend moves doesn't mean that they're entirely free of risk. Yet having weathered so many past storms, you can have more confidence with Coca-Cola, 3M, and Procter & Gamble in your portfolio that you'll have a better chance of seeing those dividends continue to grow in the years to come.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool is short shares of Procter & Gamble. The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.