Consolidated Edison (ED): Safe Retirement Income With a 4% Dividend Yield
Utility companies are far from exciting businesses, but their dependable cash flow, defensive characteristics, and typically reliable dividend payments can make them compelling stocks for investors living off dividends in retirement. Consolidated Edison (ED) possesses many characteristics that make it appealing to conservative dividend investors. The company has served the New York marketplace for more than 180 years and has grown its dividend for over 40 consecutive years. In fact, ED is the only utility company in the S&P 500 with 30 or more years of consecutive dividend increases While no stock is perfect, we hold Consolidated Edison (ED) in our Top 20 Dividend Stocks portfolio and our dividend portfolio for Conservative Retirees. Business Overview ED provides [...]
Praxair (PX): Strong Moat, 20+ Years of Dividend Growth, But Macro Headwinds Persist
Praxair (PX) has increased its dividend for 22 consecutive years and offers one of the highest quality cash flow streams an investor can find. With the stock down over 20% in 2015 and offering a 2.8% yield, it might be time for investors to consider taking a nibble in this blue chip dividend growth stock. Business Overview PX was founded in 1907 and is one of the largest producers of industrial gases (e.g. oxygen, hydrogen, argon, helium, nitrogen, carbon dioxide) in the world. Customers use PX’s gases in their operations and manufacturing processes and receive the gases via pipeline, truckload, or in packaged containers. PX operates a very capital intensive business that is well diversified by gas distribution method, [...]
United Technologies (UTX): 10%+ Annual Total Return Potential…If Management Can Execute
United Technologies (UTX) is a diversified industrial business with a strong presence in the aerospace and building systems markets. While this blue chip dividend stock has numerous well-known brands and entrenched market positions dating back more than 80 years, it seems to have lost its way a bit in recent years. Like many other large cap companies (e.g. GE, Procter & Gamble, IBM), UTX is facing growth challenges as some of its businesses have become very large, perhaps a little less focused, and more difficult to manage. Generating tons of cash flow isn’t the problem – it’s whether or not the company should be viewed as an industrial “chugger” with strong long-term earnings growth potential or a mature [...]
Medtronic (MDT): Double-Digit Dividend Growth for this Dividend Aristocrat
Medtronic (MDT) hiked its dividend by 25% earlier this year and has now increased its dividend for nearly 40 consecutive years. While MDT’s 2.0% dividend yield isn’t enough for investors living off dividends in retirement, the stock’s double-digit annual total return potential is attractive in today’s market environment, and we expect continued double-digit dividend growth in each of the next several years. We like the diversity of MDT’s sales mix, the recession-resistant nature of its medical devices, and the company’s dominant positions in many of its key markets. With that said, we believe dividend growth investors need to have a positive view on MDT’s $50 billion acquisition of Covidien and future regulatory changes impacting the U.S. healthcare landscape before [...]
Dividend Growth: What Should You Expect in 2016?
The tallest tree in the world towers over the Earth at nearly 370 feet in height. The tree is part of Redwood National Park in California and is estimated to be 700 to 800 years old. If you are aware of any dividend stocks with an equally impressive growth streak, please let us know 🙂 At it's current pace of growth (about 50 feet every 100 years), the tree would reach the sky in roughly 3.3 million years. Of course, we know that trees can't grow forever - at some point the tree doesn't have enough internal pressure to pull water up from its roots all the way to the top of the tree, limiting growth. All things have natural boundaries, and [...]
Illinois Tool Works (ITW): A Dividend Aristocrat With Double-Digit Dividend Growth
Illinois Tool Works (ITW) is one of the strongest, most diversified industrial conglomerates a dividend growth investor can find. While the stock only yields 2.4% today, the company raised its dividend by 13% last quarter and continued double-digit dividend growth isn’t out of the question. ITW possesses many of the characteristics we look for when accumulating stocks in our Top 20 Dividend Stocks portfolio. Let’s take a closer look at the business. Business Overview ITW was founded over 100 years ago and has grown into an extremely diversified manufacturer of specialized industrial and consumer equipment and consumables with a presence in many different end markets – automotive, construction, manufacturing, food & beverage, and more. The company estimates that [...]
Abbott Laboratories (ABT): A High Quality Dividend Aristocrat With Strong Dividend Growth Potential
Abbott (ABT) is a dividend aristocrat with excellent long-term growth potential. The company maintains a diversified mix of healthcare products that are sold around the world. Many of these products are recession-resistant and will enjoy more demand as consumer wealth increases in emerging markets, where ABT generates about half of its total sales. The company’s dividend is extremely safe and appears to offer upper single-digit growth potential going forward. These are the types of companies we love to own in our Top 20 Dividend Stocks portfolio when they trade at a fair price. Let’s take a closer look at the business. Business Overview ABT has been in business for more than 125 years. The company spun off its [...]
Target (TGT): A Dividend Aristocrat Yielding 3% With 20% Dividend Growth
It’s not too often that you find a dividend aristocrat with a 3% dividend yield and 20% annual dividend growth over the past decade. Target (TGT) just so happens to be one of these stocks. The company has been in business for more than 100 years and will likely be around for the next 100 as well. Despite the company’s durability, it has faced a number of challenges in recent years – the 2013 data breach, an unsuccessful expansion into Canada, and rising pressure from e-commerce competitors. Let’s take a closer look at the business and see if these challenges make TGT a worthwhile investment for our Top 20 Dividend Stocks portfolio today. Business Overview TGT [...]
Colgate (CL): 120 Years of Uninterrupted Dividends
Colgate (CL) has been one of the most successful dividend growth stocks over the last few decades and is one we are watching closely for our Top 20 Dividend Stocks portfolio. Like many other consumer staples businesses, CL benefits from strong brands, dominant market share positions, and financial strength to invest heavily in new product innovation and marketing. The company appears to be very well positioned for long-term earnings growth, and its dividend is one of the best that income investors can find – very few companies can claim uninterrupted dividends since the late 1890s! With that said, the company is facing some macro headwinds today, and the stock’s multiple is relatively high. Let’s take a closer look. [...]
10 Dividend Aristocrats With Dividend Yields Greater Than 3%
Dividend aristocrats are companies in the S&P 500 Index that have managed to raise their dividend payments for at least the last 25 consecutive years. We identified 10 of these high quality companies that offer investors a starting dividend yield of 3%. Some have paid dividends for more than 100 years! Not surprisingly, dividend aristocrats are mostly large cap, blue chip stocks that have proven to be some of the most durable businesses that money can buy. That's one reason why we own some of them in our Top 20 Dividend Stocks portfolio. Consistent dividend increases are often signs of a strong business that is enjoying steady earnings growth. Paying out dividends to shareholders also signals management's confidence in [...]