Sherwin-Williams (SHW): A Dividend Aristocrat Painting High Returns
Sherwin-Williams (SHW) has annually increased dividends since 1979 and outperformed the market by nearly 14% per year over the last decade. Watching paint dry has been quite rewarding with coatings producer SHW, but past performance is not necessarily indicative of future results. As we review SHW for potential inclusion in our Top 20 Dividend Stocks portfolio, we will be paying close attention to the factors that have contributed to the company’s historical success and assess the likelihood of these factors persisting far into the future. Business Overview SHW has been in business since 1866 and is the largest producer of paints and coatings in the United States (80% of its revenue) and third-largest worldwide. The company primarily [...]
PPG Industries (PPG): A Free Cash Flow Machine With 44 Straight Dividend Increases
PPG Industries (PPG) has rewarded its investors with higher dividend payments for 44 consecutive years. The company’s dividend appears to be one of the safest in the market with high growth potential as well. What makes this blue chip dividend stock so special? Let’s take a closer look. Business Overview PPG’s roots can be traced back to 1883. Today, the company is a leading supplier of paints, coatings, and specialty materials to customers in construction (45% of sales), automotive (33%), industrial (14%), and aerospace and marine (8%) markets. Coatings provide protection, performance, and decoration for a wide range of products, improving their durability and marketability. Approximately 60% of PPG’s 2014 sales were special-purpose coatings (aerospace, automotive OEM, [...]
ConocoPhillips (COP) Cuts its Dividend: How to Avoid These Riskier Stocks
ConocoPhillips (COP) is one of the biggest oil producers in the world and the newest case study regarding the dangers of chasing yield (the stock had a dividend yield of 7.7% as of yesterday evening). Despite its $45 billion market cap, $2.4 billion in cash on hand, and single-A credit rating, COP slashed its quarterly dividend from $0.74 per share to $0.25 per share, representing a 66% reduction. The stock's yield just fell from 7.7% to 2.6% (using yesterday's closing stock price of $38.63 per share), and a theoretical $10,000 investment in COP will see its annual income generation drop from about $770 to $260. Even worse, income investors that chased COP are sitting on another 2% capital loss [...]
Leggett & Platt (LEG): 44 Consecutive Years of Dividend Increases and a 3.1% Yield
Leggett & Platt (LEG) is a blue chip dividend stock that has rewarded investors with 44 consecutive dividend increases. With operations dating back to the 19th century and a 3.1% dividend yield, LEG is an interesting company for dividend investors to analyze. Business Overview LEG was founded in 1883 and patented the first steel coil bedspring. Over 130 years later, the company has grown into a diversified manufacturer of a broad variety of engineered components and products (e.g. innersprings, recliner mechanisms, adjustable beds, steel wire, seat frames, carpet cushion, armrests, etc.) used in bedding, furniture, carpet, cars, planes, and more around the world. By end market, 21% of LEG’s 2014 revenue was bedding, 16% fabric / carpet [...]
Cintas (CTAS): 32 Consecutive Years of Dividend Growth
Cintas (CTAS) is one of the highest scoring dividend stocks in our database for Dividend Safety (98) and Dividend Growth (99). The company has proven to be an extremely durable business with roots dating back nearly 90 years, and it has rewarded its shareholders with higher dividend payments for 32 consecutive years. This is really one of the most consistent sales and earnings growers around, and it operates in a very slow-changing industry where it maintains leading market share. At the right price, we would certainly considering owning CTAS in our Top 20 Dividend Stocks portfolio. Business Overview CTAS started out as a laundry service for businesses during the Great Depression and has grown to become the largest [...]
McCormick & Company (MKC): Uninterrupted Dividends Since 1925 and a 30 Year Growth Streak
McCormick & Company (MKC) has increased its dividend for 30 consecutive years and paid uninterrupted dividends since 1925. While the stock’s current dividend yield is just 2%, it has recorded a double-digit total return over each of the last 1-, 5-, 10- and 20-year periods. Very few companies have managed to create such consistent value for shareholders. We are evaluating this excellent business for potential inclusion in our Top 20 Dividend Stocks portfolio. Business Overview MCK manufactures and distributes spices, seasoning mixes, condiments, and other flavorful products to the entire food industry – retail outlets, food manufacturers, and foodservice businesses. The company was established in 1889 and incorporated in 1915. Some of MCK’s leading brands include McCormick, [...]
Cincinnati Financial (CINF): Over 50 Consecutive Years of Dividend Growth and a 3.4% Yield
Cincinnati Financial (CINF) has increased its dividend for 54 consecutive years, an impressive streak that only eight U.S. public companies can match. With a 3.4% dividend yield, a large base of recurring revenue, and excellent free cash flow generation, CINF is the type of stock we like to own in our Top 20 Dividend Stocks portfolio. Business Overview CINF was formed in 1950 and is among the top 25 U.S. property casualty insurers today, offering business, home, and auto insurance. Insurance companies make money by writing and selling insurance policies (which typically breaks even or loses money for most insurers), and investing policy proceeds for income until claims need to be paid out (this is where the money [...]
Hormel (HRL): The Newest Dividend King
Hormel (HRL) is the most recent dividend king to be crowned. The company recently raised its dividend by 16%, marking its 50th consecutive dividend increase. Any company that manages such an accomplishment is worth becoming familiar with, and HRL is no exception. The company has one of the safest dividends around and has grown its dividend by 18% per year over the last five years. While we don’t yet own HRL in our Top 20 Dividend Stocks portfolio, dividend investors might want to keep an eye on the company for several reasons. Business Overview HRL has been in operation for 125 years and is a multinational manufacturer and marketer of consumer-branded food and meat products. Some of the [...]
Nordson (NDSN): Dispensing Higher Dividends for 52 Straight Years
Nordson (NDSN) has the 14th longest dividend growth streak among U.S. public companies with 52 consecutive years of increases, but many investors have never heard of this dividend king. The company has sticky customer relationships, a large base of recurring revenue, extremely diversified end markets, low payout ratios, and even trades at about 15 times forward earnings. These are the types of businesses we like to own in our Top 20 Dividend Stocks portfolio. Business Overview NDSN was founded in 1954 and manufactures products used for dispensing adhesives, coatings, sealants, biomaterials, and other materials; for fluid management; for test and inspection; and for UV curing and plasma surface treatment. The company serves virtually every end market including packaging, [...]
Stanley Black & Decker (SWK): 139 Consecutive Years of Dividend Payments and Powerful Brands
Stanley Black & Decker (SWK) has paid its dividend for 139 consecutive years and increased it for the past 48 consecutive years. In two years, SWK will join the exclusive dividend kings list, which consists of companies that have raised their dividend for at least 50 straight years. These businesses are rare and typically possess numerous competitive advantages. In the case of SWK, the stock has also sold off by 15% since mid-December 2015 and trades at about 15x forward earnings, making the investment case even timelier for consideration in our Top 20 Dividend Stocks portfolio. Business Overview SWK was founded in 1843 and has grown into a diversified global provider of power and hand tools, products and [...]