Updated on May 7th, 2020 by Bob Ciura
Spreadsheet data updated daily
The Dividend Kings are the best-of-the-best in dividend longevity.
What is a Dividend King? A stock with 50 or more consecutive years of dividend increases.
The downloadable Dividend Kings Spreadsheet List below contains the following for each stock in the index, among other important investing metrics:
- Payout ratio
- Dividend yield
- Price-to-earnings ratio
You can see the full downloadable spreadsheet of all Dividend Kings (along with relevant financial metrics that matter) by clicking on the link below:
There are currently 28 Dividend Kings, including one new addition in 2020, Sysco (SYY). Each Dividend King satisfies the primary requirement to be a Dividend Aristocrat (25 years of consecutive dividend increases) twice over.
Editor’s Note: After review, Illinois Tool Works (ITW) and Target Corporation (TGT) have been removed from our lists, as they do not qualify as Dividend Kings. You can read more about this here.
Not all Dividend Kings are Dividend Aristocrats. This unexpected result is because the ‘only’ requirement to be a Dividend Kings is 50+ years of rising dividends, whereas Dividend Aristocrats must have 25+ years of rising dividends, be a member of the S&P 500 Index, and meet certain minimum size and liquidity requirements.
Table of Contents
- How To Use The Dividend Kings List To Find Dividend Stock Ideas
- The 5 Best Dividend Kings Today
#5: Genuine Parts Company (GPC)
#4: Emerson Electric (EMR)
#3: Federal Realty Investment Trust (FRT)
#2: H.B. Fuller (FUL)
#1: Altria Group (MO)
- Analysis Reports On All 28 Dividend Kings
- Performance Of The Dividend Kings
- Sector & Market Capitalization Overview
- Final Thoughts
How To Use The Dividend Kings List to Find Dividend Stock Ideas
The Dividend Kings list is a great place to find dividend stock ideas. However, not all the stocks in the Dividend Kings list make a great investment at any given time.
Some stocks might be overvalued. Conversely, some might be undervalued – making great long-term holdings for dividend growth investors.
For those unfamiliar with Microsoft Excel, the following walk-through shows how to filter the Dividend Kings list for the stocks with the most attractive valuation based on the price-to-earnings ratio.
Step 2: Follow the steps in the instructional video below. Note that we screen for price-to-earnings ratios of 15 or below in the video. You can choose any threshold that best defines ‘value’ for you.
Alternatively, following the instructions above and filtering for higher dividend yield Dividend Kings (yields of 2% or 3% or higher) will show stocks with 50+ years of rising dividends and above-average dividend yields.
Looking for businesses that have a long history of dividend increases isn’t a perfect way to identify stocks that will increase their dividends every year in the future, but there is considerable consistency in the Dividend Kings.
The 5 Best Dividend Kings Today
The following 5 stocks are our top-ranked Dividend Kings today, based on expected annual returns through 2025. Stocks are ranked in order of lowest to highest expected annual returns.
Total returns include a combination of future earnings-per-share growth, dividends, and any changes in the P/E multiple.
Dividend King #5: Genuine Parts Company (GPC)
- 5-Year Annual Expected Returns: 12%
Genuine Parts is a diversified conglomerate that sells automotive and industrial parts, electrical materials and general business products. Its global span reaches throughout North America, Australia, New Zealand and Europe and is comprised of more than 3,100 locations. The company generates nearly $20 billion in annual revenue, led by the auto parts segment which includes the core NAPA brand.
Source: Investor Presentation
Genuine Parts reported 2020 first-quarter results on May 6th. Net sales of $4.6 billion declined 3.7% from the same quarter year-over-year; however, excluding divestitures sales increased 1.1% for the quarter. Adjusted earnings-per-share declined 28% to $0.92, due to the effects of the coronavirus outbreak. Management estimates the coronavirus wiped off $0.21 from earnings-per-share in the first quarter.
Despite the difficult conditions that are likely to remain challenged in the short-term, we expect long-term growth for Genuine Parts. It has taken actions to concentrate its business model on automotive parts, which will benefit from a major growth trend. Consumers are keeping their cars on the road for much longer, rather than buying new cars more frequently. This is a potential gold mine for Genuine Parts, as older cars require more frequent repairs, and these repairs get more expensive as a vehicle ages.
According to Genuine Parts, the average repair cost per year of a vehicle aged 1-5 years is $555. But this increases to $829 for a vehicle aged 6-12 years, and declines somewhat to an average annual repair cost of $797 for vehicles older than 12 years. As a result, the prime years for aftermarket repairs start at year 6. Fortunately for Genuine Parts, vehicles aged 6 years or older now represent over 70% of the total U.S. vehicle fleet.
The company has a long and proven track record of successfully taking advantage of growth opportunities. Sales and profit have increased in 87 and 75 out of its 92-year history, respectively. Over the past decade, the company has grown its sales by 7% and earnings-per-share by 9% compounded annually. As a Dividend King, Genuine Parts has proven its ability to withstand recessions.
The stock has a current yield of 4.2%, and we expect EPS growth of 3% per year over the next five years. In addition, positive returns from an expanding P/E multiple lead to total expected returns of 12% per year through 2025.
Dividend King #4: Emerson Electric (EMR)
- 5-Year Annual Expected Returns: 12%
Emerson Electric was founded in Missouri in 1890 and since that time, it has evolved through organic growth, as well as strategic acquisitions and divestitures, from a regional manufacturer of electric motors and fans into a $46 billion diversified global leader in technology and engineering. Its global customer base and diverse product and service offerings afford it $18+ billion in annual revenue. The company’s very impressive 62-year dividend increase streak lands it on the prestigious Dividend Kings list.
The company reported second-quarter financial results on April 21st. Revenue of $4.2 billion fell 9% year-over-year, while underlying sales declined 7% due to the coronavirus impact on the global economy. By operating segment, Automation Solutions revenue declined 10%, while Commercial & Residential Solutions declined 7%.
Source: Investor Presentation
Earnings-per-share of $0.84 was flat year-over-year. Emerson lowered its full-year outlook, and now expects adjusted EPS of $3.00-$3.20, versus previous guidance of $3.55-$3.80. Fortunately, the company intends to maintain the dividend.
Emerson’s competitive advantage is in its many decades of experience in building customer relationships and engineering excellence. It has a global customer base that is seeing strong economic growth and that underlying sales tailwind should power results going forward. It is very susceptible to recessions however, meaning 2020 is likely to be a challenging year.
We have modest growth expectations for Emerson, projecting 5% annual EPS growth through 2024. Shares trade for a P/E ratio of 15.2, which is slightly below our fair value P/E of 18. The combination of EPS growth, valuation changes, and the 3.6% dividend yield results in total expected returns of 12% per year through 2025.
Dividend King #3: Federal Realty Investment Trust (FRT)
- 5-Year Annual Expected Returns: 15.6%
Federal Realty is a Real Estate Investment Trust, or REIT. It concentrates in high-income, densely-populated coastal markets in the US, allowing it to charge more per square foot than its competition. Federal Realty trades with a market capitalization above $5 billion today on $950 million in annual revenue.
Federal Realty’s business model is to own real estate properties that it rents to various tenants in the retail industry. This is a difficult time for retailers, as competition is heating up from e-commerce players such as Amazon (AMZN) and many others. Mall traffic is declining, which has put pressure on many brick-and-mortar retailers. Conditions for retail real estate have become even more challenging due to the coronavirus, which has forced many stores to close.
Federal Realty’s competitive advantages include its superior development pipeline, its focus on high-income, high-density areas and its decades of experience in running a world-class REIT. These qualities allow it to perform admirably, and continue growing even in a recession.
The company reported first-quarter financial results on May 7th. Revenue of $232 million declined fractionally, while adjusted FFO-per-share of $1.50 declined 3.9% from the same quarter last year. The company collected 53% of April rent, and reported that about 47% of its commercial tenants are open and operating based on annualized base rent.
Source: Investor Presentation
In response to the coronavirus-related shutdowns, the company is boosting its liquidity to help it get through the coronavirus crisis. Federal Realty drew $990 million of its $1 billion revolving credit facility in March. Occupancy now stands at 93.6%.
Federal Realty’s FFO did not decline on a year-over-year basis at any point in the past decade, a tremendously impressive feat given that the U.S. economy dealt with the Great Recession. And it should also be noted that the company operates in the highly cyclical real estate sector. The simple fact that it has such a consistent track record of steady FFO growth makes it one of the most desirable REITs in the market. We are forecasting 5.5% annualized FFO growth for the next five years.
Based on expected 2020 FFO-per-share of $6.49, Federal Realty stock trades for a price-to-FFO ratio of 11.9. Our fair value estimate for Federal Realty is a price-to-FFO ratio (P/FFO) of 15. We view Federal Realty stock as undervalued. An expanding P/FFO multiple could boost shareholder returns by approximately 4.7% per year over the next 5 years.
In addition, we expect annual FFO-per-share growth of 5.5%, while the stock has a 5.4% dividend yield. Overall, we expect total annual returns of 15.6% per year over the next five years.
Dividend King #2: H.B. Fuller (FUL)
- 5-Year Annual Expected Returns: 15.8%
H.B. Fuller is a leading global manufacturer of adhesives, sealants, and other specialty chemical products. The category of industrial adhesives is the core product offering of the company. H.B. Fuller grew to its current size largely thanks to the $1.6 billion acquisition of Royal Adhesives & Sealants. The company now has a market capitalization of $1.8 billion.
Source: Investor Presentation
Acquisitions have paved the way for much of H.B. Fuller’s growth in recent years. The Royal Adhesives & Sealants deal was the largest in the history of the company. The acquisition boosted its annual sales by $735 million (32% growth) and enhanced its reach to more highly specialized adhesive segments.
H.B. Fuller also acquired Adecol in late 2017 to improve its growth prospects in Brazil. Thanks to these acquisitions, H.B. Fuller expects to grow its EBITDA by approximately 50%, from about $300 million in 2017 to $440-$460 million in 2020.
In late March, H.B. Fuller reported (3/25/20) first-quarter results for fiscal 2020. Organic revenue declined 1.3% for the quarter, but would have been up 1% after stripping out currency and divestitures. Adjusted earnings-per-share of $0.34 was flat from the same quarter last year.
On a positive note, on April 2nd the company increased its dividend by 1.6%, representing the 51st consecutive year of rising dividends paid to shareholders.
One negative aspect of its various acquisitions is a higher level of debt. Due to the acquisition of Royal Adhesives & Sealants, interest coverage has plunged to an almost decade low of 2.2x. However, management has repeatedly confirmed that it will be using a major portion of free cash flows to reduce debt. The company reduced its debt by $268 million last year and expects to reduce it by another $200 million this year. As a result, its interest coverage is likely to revert towards its historical values in the upcoming years.
Investors should note that the company is fairly vulnerable to recessions. As the customers of H.B. Fuller are manufacturers of a wide range of products, the performance of H.B. Fuller is closely tied to underlying economic conditions. During the Great Recession, its earnings-per-share plunged -79%, from $1.68 in 2007 to $0.36 in 2008, and the stock lost two-thirds of its market cap in less than six months. As a recession has not occurred for a whole decade, investors should account for this risk factor, especially given the company’s increased leverage.
Still, the company continues to grow its profits and dividends. We expect 6.5% annual EPS growth through 2025, and shares have a current dividend yield of 1.9%. Fuller shares trade for a P/E of 10.5, compared with our fair value estimate of 15. Along with a positive return of 7.4% from an expanding P/E multiple, Fuller stock has total expected returns of 15.8% per year over the next five years.
Dividend King #1: Altria Group (MO)
- 5-Year Annual Expected Returns: 18.6%
Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and a number of other non-smokeable brands, including Skoal, Copenhagen, and the Ste. Michelle brand of wine. Altria also has a 10% ownership stake in global beer giant Anheuser Busch InBev (BUD).
Altria reported surprisingly strong first-quarter results. Revenue of $5.1 billion increased 15% from the same quarter a year ago, while adjusted earnings-per-share of $1.09 increased 18.5%. Revenue and adjusted earnings-per-share both beat analyst estimates. Altria benefited from 6.1% growth in smokeable products shipment volume, or 3.5% adjusting for industry trade movements, calendar differences, and other factors.
The company has taken precautions to shore up its financial positions, including drawing $3 billion on its revolving credit facility, suspended its share repurchases, and it withdrew its full-year guidance due to coronavirus uncertainty. That said, the company maintained its target dividend payout ratio of 80%, in terms of adjusted EPS. If the first quarter is any indication, Altria may get through the coronavirus relatively well.
The long-term future is cloudy for cigarette manufacturers such as Altria, which is why the company has invested heavily in adjacent categories to fuel its future growth.
Source: Investor Presentation
The company purchased a 55% equity stake in Canadian marijuana producer Cronos Group, invested nearly $13 billion for a 35% equity stake in e-vapor manufacturer Juul Labs, and recently acquired an 80% ownership stake in Switzerland-based Burger Söhne Group, for its on! oral nicotine pouch brand. These investments could provide Altria much-needed growth as the cigarette market steadily declines.
In the meantime, Altria has a very high dividend yield above 9%. The payout appears secure, as Altria generates huge cash flow, even during recessions. The company has increased its dividend for 50 consecutive years. Altria ranks very highly in terms of safety because the company has tremendous competitive advantages.
It operates in a highly regulated industry, which virtually eliminates the threat of new competition in the tobacco industry. Altria enjoys strong brands across its product portfolio, including the No. 1 cigarette brand. As a result, it has pricing power and brand loyalty. In addition, tobacco companies enjoy low manufacturing and distribution costs, thanks to economies of scale.
We expect Altria to grow adjusted EPS by approximately 3.3% per year over the next five years. In addition to the 9.4% dividend yield as well as positive returns from an expanding P/E multiple, total returns are expected at 18.6% per year over the next five years.
Analysis Reports On All 28 Dividend Kings
All 28 Dividend Kings are listed below by sector. You can access detailed coverage of each by clicking on the name of each Dividend King. Additionally, you can download our newest Sure Analysis Research Database report for each Dividend King as well.
- Genuine Parts Company (GPC) – [2/26/20 Sure Analysis report]
- Lowe’s Companies (LOW) – [3/25/20 Sure Analysis report]
- The Colgate-Palmolive Company (CL) – [2/9/20 Sure Analysis report]
- Hormel Foods Corporation (HRL) – [3/1/20 Sure Analysis report]
- The Coca-Cola Company (KO) – [2/19/20 Sure Analysis report]
- Lancaster Colony (LANC) – [2/11/20 Sure Analysis report]
- Altria Group (MO) – [3/31/20 Sure Analysis report]
- Procter & Gamble (PG) – [4/29/20 Sure Analysis report]
- Sysco Corporation (SYY) – [3/20/20 Sure Analysis report]
- Tootsie Roll Industries (TR) – [3/30/20 Sure Analysis report]
- Cincinnati Financial (CINF) – [2/22/20 Sure Analysis report]
- Farmers & Merchants Bancorp (FMCB) – [4/29/20 Sure Analysis report]
- Commerce Bancshares (CBSH) – [5/4/20 Sure Analysis report]
- ABM Industries (ABM) – [3/17/20 Sure Analysis report]
- Dover Corporation (DOV) – [4/24/20 Sure Analysis report]
- Emerson Electric (EMR) – [2/13/20 Sure Analysis report]
- 3M Company (MMM) – [4/28/20 Sure Analysis report]
- Nordson (NDSN) – [2/23/20 Sure Analysis report]
- Parker Hannifin (PH) – [1/31/20 Sure Analysis report]
- Stanley Black & Decker (SWK) – [4/30/20 Sure Analysis report]
- American States Water (AWR) – [3/25/20 Sure Analysis report]
- California Water Service (CWT) – [3/5/20 Sure Analysis report]
- Northwest Natural Gas (NWN) – [4/16/20 Sure Analysis report]
- SJW Group (SJW) – [2/28/20 Sure Analysis report]
Additionally, you can see the Dividend Kings analyzed in the video below.
Performance Of The Dividend Kings
The Dividend Kings matched the performance of the S&P 500 ETF (SPY) in April 2020. Return data for the month is shown below:
- Dividend Kings April 2020 total return: 9.7%
- SPY April 2020 total return: 12.7%
In 2019, the Dividend Kings as a basket underperformed the S&P 500 ETF SPY by a fairly wide margin. Stable dividend growers like the Dividend Kings tend to underperform in bull markets, and outperform on a relative basis during bear markets.
The Dividend Kings are not officially regulated and monitored by any one company. There’s no Dividend King ETF. This means that tracking the historical performance of the Dividend Kings can be difficult. More specifically, performance tracking of the Dividend Kings often introduces significant survivorship bias.
Survivorship bias occurs when one looks at only the companies that ‘survived’ the time period in question. In the case of Dividend Kings, this means that the performance study does not include ex-Kings that reduced their dividend, were acquired, etc.
But with that said, there is something to be gained from investigating the historical performance of the Dividend Kings. Specifically, the performance of the Dividend Kings shows that ‘boring’ established blue-chip stocks that increase their dividend year-after-year can significantly outperform over long periods of time.
Notes: S&P 500 performance is measured using the S&P 500 ETF (SPY). The Dividend Kings performance is calculated using an equal weighted portfolio of today’s Dividend Kings, rebalanced annually. Due to insufficient data, Farmers & Merchants Bancorp (FMCB) returns are from 2000 onwards. Performance excludes previous Dividend Kings that ended their streak of dividend increases which creates notable lookback/survivorship bias. The data for this study is from Ycharts.
Sector & Market Capitalization Overview
The sector and market capitalization characteristics of the Dividend Kings are very different from the characteristics of the broader stock market. The following bullet points show the number of Dividend Kings in each sector of the stock market.
- Industrial: 7
- Consumer Defensive: 8
- Utilities: 4
- Consumer Cyclical: 2
- Financial Services: 3
- Basic Materials: 2
- Real Estate: 1
- Healthcare: 1
The Dividend Kings are overweight in the Industrials, Consumer Defensive, and Utilities sectors. Interestingly, The Dividend Kings have no exposure to the Technology sector, which is the largest component of the S&P 500 index.
The Dividend Kings also have some interesting characteristics with respect to market capitalization. These trends are illustrated below.
- 2 Mega caps ($200 billion+ market cap; JNJ and PG)
- 12 Large caps ($10 billion to $200 billion market cap)
- 7 Midcaps ($2 billion to $10 billion)
- 7 Small caps ($300 million to $2 billion)
Interestingly, 17 out of the 28 Dividend Kings have market capitalizations below $20 billion. This shows that corporate longevity doesn’t have to be accompanied by massive corporate size.
Screening to find the best Dividend Kings is not the only way to find high quality dividend growth stock ideas.
Sure Dividend maintains similar databases on the following useful universes of stocks:
- The Dividend Aristocrats: S&P 500 stocks with 25+ years of consecutive dividend increases.
- The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
- The Complete List of High Dividend Stocks: Stocks with 5%+ dividend yields.
- The Complete List of Monthly Dividend Stocks: our database currently contains more than 30 stocks that pay dividends every month.
- The Sure Dividend Blue Chip Stocks List: our list of “blue chip stocks” is a combination of our Dividend Kings, Dividend Aristocrats, and Dividend Achievers lists.
There is nothing magical about investing in the Dividend Kings. They are simply a group of high-quality businesses with shareholder-friendly management teams that have strong competitive advantages.
Purchasing businesses with these characteristics at fair or better prices and holding them for long periods of time will likely result in strong long-term investment performance.
The most appealing part of investing is that you have unlimited choice. You can buy into mediocre businesses, or just the excellent companies. As Warren Buffett says:
“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
– Warren Buffett