Updated on June 4th, 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: ABM Industries (ABM)
#4: Federal Realty Investment Trust (FRT)
#3: H.B. Fuller (FUL)
#2: Farmers & Merchants Bancorp (FMCB)
#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: ABM Industries (ABM)
- 5-Year Annual Expected Returns: 8.5%
ABM Industries is a leading provider of facility solutions, which includes janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, and parking. It has increased its dividend for 52 consecutive years. ABM Industries has a diverse portfolio of customers across multiple industries.
Source: Investor Presentation
ABM Industries reported its first-quarter earnings results on March 4th. Revenue of $1.6 billion increased by 0.3% from the prior year quarter, and slightly exceeded analyst estimates. Revenue growth was primarily driven by higher revenues from the Technical Solutions business, which grew by 22% year-over-year.
Earnings-per-share grew 26% for the quarter, to $0.39, and significantly exceeded analyst estimates by $0.10 per share. The company withdrew its full-year guidance For fiscal 2020, having previously anticipated earnings-per-share would be in a range of $1.90 to $2.10. But the company felt it was prudent to withdraw its full-year outlook due to the uncertainty presented by coronavirus.
Despite the difficult business conditions for 2020, the company has positive long-term growth potential. ABM Industries’ earnings-per-share have compounded at 5% over the last decade, a solid growth rate. Profits have risen in every year of the last decade. Because of its consistent profitability in the past decade and strong performance during the Great Recession, we believe ABM Industries should be able to do well during future economic downturns.
There are multiple growth catalysts for ABM Industries. The GCA Services acquisition has allowed the company to expand its foothold both within the United States and internationally, which comes with scale advantages for ABM Industries. It also plans to capture a meaningful amount of cost synergies over the years, which could be a positive for the company’s long-term earnings-per-share growth. Overall, we expect 5% annual EPS growth through 2025.
Based on expected earnings-per-share of $2.00, ABM stock trades for a price-to-earnings ratio of 16.7, compared with our fair value estimate of 17.5. An expanding P/E multiple to the fair value estimate could boost annual returns by 1.2% per year over the next five years. Combined with expected EPS growth and the 2.3% dividend yield, total returns are expected to reach 8.5% per year through 2025.
Dividend King #4: Federal Realty Investment Trust (FRT)
- 5-Year Annual Expected Returns: 9.8%
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 of $7 billion today, with $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.
The company later updated investors that it collected 54% of rent in May, with 54% of its tenants open and operating as of June 1st.
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 completed a $400 million term loan issue on May 6th, and a separate $400 million note issuance on May 9th. The company has approximately $2 billion in available liquidity consisting of cash on hand and its undrawn credit facility.
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 $5.73, Federal Realty stock trades for a price-to-FFO ratio of 16.3. Our fair value estimate for Federal Realty is a price-to-FFO ratio (P/FFO) of 15. We view Federal Realty stock as slightly overvalued. A declining P/FFO multiple could reduce shareholder returns by approximately 1.6% per year over the next 5 years.
However, expected annual FFO-per-share growth of 6.9%, plus the 4.5% dividend yield, lead to expected total annual returns of 9.8% per year over the next five years.
Dividend King #3: H.B. Fuller (FUL)
- 5-Year Annual Expected Returns: 10.3%
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 $2.1 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 12% annual EPS growth through 2025, and shares have a current dividend yield of 1.6%. Fuller shares trade for a P/E of 17.7, compared with our fair value estimate of 15. Negative returns from a declining P/E multiple could reduce annual returns by 3.3% per year over the next five years.
However, expected EPS growth and dividends can offset over-valuation. Fuller stock has total expected returns of 10.3% per year over the next five years.
Dividend King #2: Farmers & Merchants Bancorp (FMCB)
- 5-Year Annual Expected Returns: 10.7%
Founded in 1916, Farmers & Merchants Bancorp is a locally owned and operated community bank with 32 locations in California. Due to its small market cap ($563 million) and its low liquidity, it passes under the radar of most investors. Nevertheless, F&M Bank has paid uninterrupted dividends for 85 consecutive years and has raised its dividend for 55 consecutive years, including a 2.8% increase in May 2020.
The company is conservatively managed and, until four years ago,had not made an acquisition since 1985. However, in the last four years, it has begun to pursue growth more aggressively. It acquired Delta National Bancorp in 2016 and increased its locations by 4. Moreover, in October-2018, it completed its acquisition of Bank of Rio Vista, which has helped F&M Bank to further expand in the San Francisco East Bay Area.
In late April, F&M Bank reported (4/27/20) financial results for the first quarter of fiscal 2020. Despite the outbreak of the coronavirus, the bank grew its earnings-per-share by 4.2% over the prior year’s quarter. Net interest margin shrank from 4.4% to 4.2% due to suppressed interest rates but net interest income grew 3.6% thanks to 9.6% growth in interest-earning assets.
Unlike most banks, which recorded significant loan loss provisions due to the pandemic, F&M Bank did not book any losses for the pandemic thanks to its conservative portfolio. F&M Bank is a prudently managed bank, which has always targeted a conservative capital ratio. The bank currently has a tier 1 capital ratio of 10.2%, which results in the highest regulatory classification of “well capitalized”.
Moreover, its credit quality remains exceptionally strong, as there are no non-performing loans and leases in its portfolio. The prudent management results in lower leverage and thus slower growth than leveraged banks during boom times but protects the company from recessions.
The merits of this strategy were on display during the Great Recession. While most banks saw their earnings collapse, F&M Bank incurred a modest -9% decrease in its earnings-per-share, from $28.69 in 2008 to $25.57 in 2009, and kept raising its dividend.
Shares trade for a 2020 P/E ratio of 10.0, compared with our fair value estimate of 12.0. An expanding valuation multiple could increase annual returns by 3.7% per year. Plus expected EPS growth of 5% and the 2% dividend yield, total returns are expected to reach 10.7% per year through 2025.
Dividend King #1: Altria Group (MO)
- 5-Year Annual Expected Returns: 14.8%
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 8%. 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 8.5% dividend yield as well as positive returns from an expanding P/E multiple, total returns are expected at 14.8% 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) – [5/9/20 Sure Analysis report]
- Lowe’s Companies (LOW) – [3/25/20 Sure Analysis report]
- The Colgate-Palmolive Company (CL) – [5/6/20 Sure Analysis report]
- Hormel Foods Corporation (HRL) – [3/1/20 Sure Analysis report]
- The Coca-Cola Company (KO) – [5/5/20 Sure Analysis report]
- Lancaster Colony (LANC) – [5/12/20 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) – [5/4/20 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) – [5/14/20 Sure Analysis report]
- 3M Company (MMM) – [4/28/20 Sure Analysis report]
- Nordson (NDSN) – [5/21/20 Sure Analysis report]
- Parker Hannifin (PH) – [5/12/20 Sure Analysis report]
- Stanley Black & Decker (SWK) – [4/30/20 Sure Analysis report]
- American States Water (AWR) – [5/27/20 Sure Analysis report]
- California Water Service (CWT) – [5/8/20 Sure Analysis report]
- Northwest Natural Gas (NWN) – [4/16/20 Sure Analysis report]
- SJW Group (SJW) – [5/5/20 Sure Analysis report]
Additionally, you can see the Dividend Kings analyzed in the video below.
Performance Of The Dividend Kings
The Dividend Kings underperformed versus the S&P 500 ETF (SPY) in May 2020. Return data for the month is shown below:
- Dividend Kings May 2020 total return: 3.0%
- SPY May 2020 total return: 7.6%
In 2019, the Dividend Kings as a basket under-performed the S&P 500 ETF SPY by a fairly wide margin. Stable dividend growers like the Dividend Kings tend to under-perform 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.
- 3 Mega caps ($200 billion+ market cap; JNJ, PG, and KO)
- 11 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, 16 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