Updated on January 5th, 2021 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 31 Dividend Kings (along with important financial metrics such as dividend yields, payout ratios, and price-to-earnings ratios) by clicking on the link below:
There are currently 31 Dividend Kings, including recent additions such as Black Hills Corp. (BKH), Sysco (SYY), Universal Corporation (UVV) and National Fuel Gas (NFG). 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: Lowe’s Companies (LOW)
#3: Federal Realty Investment Trust (FRT)
#2: National Fuel Gas (NFG)
#1: Altria Group (MO)
- Analysis Reports On All 31 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 2026. 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: 9.4%
ABM Industries is a leading provider of facility solutions, which includes janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, and parking. The company employs about 140,000 people in more than 350 offices throughout the United States and various international locations, primarily in Canada.
Source: Investor Presentation
ABM Industries reported its fourth-quarter earnings results (fiscal 2020) on December 16. Revenues totaled $1.48 billion during the quarter, down by 10% from the previous year’s quarter. The revenue decline was primarily caused by lower demand from ABM Industries’ customers during the coronavirus crisis.
ABM Industries generated earnings-per-share of $0.69 during the fourth quarter, which missed the analyst consensus marginally, by $0.01. Nevertheless, ABM Industries’ earnings-per-share grew by 4.5% versus the previous year’s quarter, a very solid growth rate when we account for the negative coronavirus impact on the company’s top line.
ABM Industries’ earnings-per-share grew at 5% per year over the last decade, which is solid, but not spectacular growth. ABM Industries even grew its earnings-per-share during the 2008-2009 financial crisis. Because of this outstanding recession performance, we believe ABM Industries should be able to do well during future economic downturns.
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 the company. ABM Industries also plans to capture a meaningful amount of synergies over the years, which could be a positive for the company’s long-term earnings-per-share growth rate.
Shares trade for a P/E ratio of 15.8, compared with our fair value estimate of 17.5. An expanding valuation multiple could increase annual returns by 2.1% each year. Plus expected EPS growth of 5% and the 2.0% dividend yield, total returns are expected to reach 9.1% per year.
Dividend King #4: Lowe’s Companies (LOW)
- 5-Year Annual Expected Returns: 9.8%
Lowe’s Companies is the second-largest home improvement retailer in the US (after Home Depot). Lowe’s operates nearly 2,000 home improvement and hardware stores in the U.S. and Canada.
Lowe’s reported third-quarter results on November 18th, and recorded net earnings of $692 million, compared to net earnings of $1.0 billion in the prior year period. Excluding a negative $1.05 impact from extinguishing debt, adjusted earnings per share increased 40% to $1.98 from $1.41 in the third quarter of 2019. Comparable sales increased 30% for the quarter.
Source: Investor Presentation
The company is in a positive liquidity position with $8.2 billion of cash and cash equivalents. Lowe’s reinstated the repurchase program and bought back 3.6 million shares for $621 million. The company is forecasting to purchase $3 billion worth of stock in the next quarter as they originally estimated $5 billion of share repurchases at the beginning of the year.
This year is set to be another year of strong growth for Lowe’s. Management is forecasting adjusted diluted earnings per share of $1.10 to $1.20 for the fourth quarter. We forecast 7% annual EPS growth over the next five years.
The key to Lowe’s success over the course of 2020 has been its booming e-commerce platform. In the most recent quarter, Lowe’s registered triple-digit online sales growth. This is a key differentiator between successful retailers like Lowe’s and the many retailers that are reporting losses or going out of business. Lowe’s is benefiting right alongside the e-commerce boom.
Lowe’s enjoys competitive advantages from scale and brand power as it operates in a duopoly with Home Depot. Neither of the two are expanding their store count significantly,and neither is interested in a price war. Both should remain highly profitable, as the home improvement market in the US is large enough for two companies to succeed.
Based on expected EPS of $8.60 for the current fiscal year, Lowe’s stock trades for a P/E ratio of 18.7. Our fair value estimate is a P/E of 20. The combination of an expanding valuation, EPS growth and dividends lead to total expected returns of nearly 10% per year over the next five years.
Dividend King #3: Federal Realty Investment Trust (FRT)
- 5-Year Annual Expected Returns: 11.6%
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 of $6.7 billion.
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.
That said, Federal Realty continues to generate positive FFO and pay dividends to shareholders, thanks to a high-quality and diversified property portfolio.
Source: Investor Presentation
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.
Federal Realty reported Q3 earnings on 11/5/20. FFO per share came in at $1.22, down sharply from $1.43 in the year-ago quarter. Total revenue came in at $208.2M, down from $233.2M in the year-ago quarter. Despite the steep declines, there were some positive signs.
Rent collections continued to trend positively with 85% of total Q3 rents collected. During the third quarter FRT also signed 101 leases for 481,105 square feet of retail space, demonstrating leasing volumes at pre-COVID levels. Federal Realty also recently increased its dividend for the 53rd year in a row.
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. We are forecasting 5.9% annualized FFO growth for the next five years.
Based on normalized FFO-per-share of $6.00, Federal Realty stock trades for a price-to-FFO ratio of 13.9. Our fair value estimate for Federal Realty is a price-to-FFO ratio (P/FFO) of 15. We view Federal Realty stock as slightly undervalued. In addition, expected annual FFO-per-share growth of ~5.9%, plus the 5.1% dividend yield lead to expected total annual returns of 11.6% per year over the next five years.
Dividend King #2: National Fuel Gas (NFG)
- 5-Year Annual Expected Returns: 12.2%
National Fuel Gas Co. is a diversified energy company that operates in five business segments: Exploration & Production, Pipeline & Storage, Gathering, Utility, and Energy Marketing. The company’s largest segment is Exploration & Production.
Source: Investor Presentation
In November, National Fuel Gas reported financial results for the fourth fiscal quarter, and full fiscal year. Adjusted earnings-per-share of $0.40 for the quarter were a 26% year-over-year decline, due primarily to weak commodity prices that impacted the company’s E&P segment.
Partially offsetting declining oil and gas prices was a 14% increase in production, fueled by the recent acquisition of upstream assets. Adjusted EBITDA increased 1.5% year-over-year.
National Fuel Gas is facing a headwind due to the spread of the coronavirus, but the pandemic has affected the natural gas market much less than the oil market. In addition, the pipeline & storage and gathering segments provide a strong buffer to earnings amid low commodity prices.
The company raised fiscal 2021 guidance, and now expects a more meaningful recovery next year with adjusted earnings-per-share in a range of $3.55 to $3.85.
Based on expected earnings-per-share of $3.80 for the upcoming fiscal year, NFG stock trades for a price-to-earnings ratio of 11.1, compared with our fair value estimate of 15. An expanding P/E multiple could boost shareholder returns by 6.2% over the next five years.
Combined with 2% expected EPS growth and the 4.3% dividend yield, total returns are expected to reach 12.2% per year through 2026.
Dividend King #1: Altria Group (MO)
- 5-Year Annual Expected Returns: 14.4%
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).
On October 30th, Altria reported financial results for the 2020 third quarter. Revenue (net of excise taxes) of $5.7 billion increased 5% year-over-year, and beat analyst estimates by $140 million. Smokeable volumes declined 0.2% for the quarter, much better than the 4% predicted drop. On a GAAP basis, Altria reported a loss of -$0.51 per share, as the company took a non-cash pre-tax impairment charge of $2.6 billion related to its investment in JUUL.
However, adjusted earnings-per-share came to $1.19 per share, beating estimates by $0.03 per share. Altria also raised the low end of its full-year guidance for adjusted earnings-per-share, now expecting a range of $4.30 to $4.38, from prior guidance of $4.21 to $4.38.
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 of 8.6%. The payout appears secure, as Altria generates huge cash flow, even during recessions. The company has increased its dividend for 51 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.
Based on expected EPS of $4.31 for 2020, Altria stock trades for a P/E ratio of 9.5, below our fair value estimate of 11. Shares could return 3.0% per year over the next five years from an expanding P/E multiple. We also expect Altria to grow adjusted EPS by approximately 3% per year over the next five years.
In addition to the 8.4% dividend yield as well as a small positive boost from an expanding P/E multiple, total returns are expected at 14.4% per year over the next five years.
Analysis Reports On All 31 Dividend Kings
All 31 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) – [12/1/20 Sure Analysis report]
- Lowe’s Companies (LOW) – [11/23/20 Sure Analysis report]
- The Colgate-Palmolive Company (CL) – [11/30/20 Sure Analysis report]
- Hormel Foods Corporation (HRL) – [12/8/20 Sure Analysis report]
- The Coca-Cola Company (KO) – [10/23/20 Sure Analysis report]
- Lancaster Colony (LANC) – [12/8/20 Sure Analysis report]
- Altria Group (MO) – [11/9/20 Sure Analysis report]
- Procter & Gamble (PG) – [11/11/20 Sure Analysis report]
- Sysco Corporation (SYY) – [11/13/20 Sure Analysis report]
- Tootsie Roll Industries (TR) – [11/17/20 Sure Analysis report]
- Universal Corporation (UVV) – [11/17/20 Sure Analysis report]
- Cincinnati Financial (CINF) – [11/17/20 Sure Analysis report]
- Farmers & Merchants Bancorp (FMCB) – [10/29/20 Sure Analysis report]
- Commerce Bancshares (CBSH) – [10/22/20 Sure Analysis report]
- ABM Industries (ABM) – [12/17/20 Sure Analysis report]
- Dover Corporation (DOV) – [10/20/20 Sure Analysis report]
- Emerson Electric (EMR) – [12/2/20 Sure Analysis report]
- 3M Company (MMM) – [10/27/20 Sure Analysis report]
- Nordson (NDSN) – [12/16/20 Sure Analysis report]
- Parker Hannifin (PH) – [11/17/20 Sure Analysis report]
- Stanley Black & Decker (SWK) – [10/27/20 Sure Analysis report]
- American States Water (AWR) – [10/28/20 Sure Analysis report]
- Black Hills Corp. (BKH) – [11/11/20 Sure Analysis report]
- California Water Service (CWT) – [11/17/20 Sure Analysis report]
- Northwest Natural Gas (NWN) – [11/11/20 Sure Analysis report]
- SJW Group (SJW) – [11/6/20 Sure Analysis report]
Additionally, you can see the Dividend Kings analyzed in the video below.
Performance Of The Dividend Kings
The Dividend Kings outperformed versus the S&P 500 ETF (SPY) in December 2020. Return data for the month is shown below:
- Dividend Kings December 2020 total return: 3.2%
- SPY December 2020 total return: 2.6%
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 onward. 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: 9
- Utilities: 5
- Consumer Cyclical: 2
- Financial Services: 3
- Basic Materials: 2
- Real Estate: 1
- Healthcare: 1
- Energy: 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)
- 13 Large caps ($10 billion to $200 billion market cap)
- 11 Midcaps ($2 billion to $10 billion)
- 4 Small caps ($300 million to $2 billion)
Interestingly, 19 out of the 31 Dividend Kings have market capitalizations below $20 billion. This shows that corporate longevity doesn’t have to be accompanied by massive 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 Champions: stocks with 25+ years of dividend increases but do not qualify as Dividend Aristocrats.
- 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