Yahoo Finance 4 Resilient US Stocks That Have Grown Their Dividends for 21 Years or More
Dividends are said to be an investor’s best friend.
Not only do they put money straight into your bank account, but they also represent a tangible return on your investment.
The mark of a great dividend stock is one that churns out boatloads of free cash flow while consistently raising its dividend over the years.
If you are an income-focused investor searching for dividend stocks that can give you peace of mind, the US market is a great place to start looking.
There are stocks there that possess resilient business models and have also raised their dividends without a pause for decades.
We feature four that you may wish to add to your buy watchlist of dividend-paying stocks.
Clorox (NYSE: CLX)
Clorox is a company manufacturing cleaning and home care products such as detergents, bleach, and disinfectants.
Some of their famous brands include Clorox, Chux, Liquid-Plumr, and Pine-Sol.
Clorox’s most recently raised its quarterly dividend to US$1.20 per share from US$1.18 for a 1.7% year on year increase.
It was also the 21st consecutive year that the company has increased its dividend.
Clorox’s recent fiscal 2023 (FY2023) earnings ending 30 June are a testament to its competitive moat.
The consumer goods company saw sales rise 4% year on year to US$7.4 billion.
Pricing accounted for a 16% year on year rise in sales but lower volumes and unfavourable exchange rates shaved off 10% and 2%, respectively.
Despite this, gross margin still rose 3.6 percentage points to 39.4% in FY2023 from 35.8% in FY2022.
Net profit came in 67.6% lower than the prior year at US$149 million but this was due to an impairment loss of US$445 million.
Excluding this impairment, net profit would have risen by 28.6% year on year to US$594 million.
Clorox is also advancing on its long-term IGNITE strategy with CEO Linda Rendle reporting four consecutive quarters of cost savings.
The company is also investing US$500 million to digitally transform itself and improve its operating model by rolling out a new enterprise resource planning system.
Kimberly-Clark (NYSE: KMB)
Kimberly-Clark, or KMB, is a consumer goods company selling adult care, home care, and baby care products to more than 175 countries globally.
Some of its famous brands include Kleenex (tissue paper), Huggies (diapers), and Kotex (sanitary pads).
KMB has declared a quarterly dividend of US$1.18 per share, representing its 51st consecutive dividend increase and putting it in the category of dividend kings.
The consumer giant generates healthy free cash flow every year and for the past three fiscal years (2020 to 2022), it has churned out an average annual free cash flow of US$2 billion.
For the first six months of 2023 (1H 2023), KMB reported a 2% year on year increase in sales to US$10.3 billion while gross profit improved by 13% year on year to US$3.5 billion.
Net profit fell by 30% year on year to US$668 million but like Clorox, it was because of a US$658 million impairment charge.
Stripping this out, net profit would have shot up 38.1% year on year.
The business generated a positive free cash flow of US$1 billion for 1H 2023, giving us confidence that it can continue to increase its dividends for the foreseeable future.
Dover Corporation (NYSE: DOV)
Dover is a diversified manufacturer of consumable supplies, aftermarket parts, equipment, and software products such as hoses, pumps, winches, and electronic monitoring systems, among others.
The company recently raised its quarterly dividend from US$0.505 to US$0.51 per share, making this its 68th consecutive dividend increase.
Dover has chalked up an impressive track record of growing its business.
Revenue rose from US$6.7 billion in 2020 to US$8.5 billion in 2022 while net income soared from US$683.5 million to US$1.1 billion over the same period.
These three years also saw consistent positive free cash flow generation.
1H 2023 has seen Dover continue to generate a free cash flow of US$348.1 million, more than triple the US$101.9 million generated a year ago.
This is a healthy trend that enables the company to continue to raise its dividends.
Walmart (NYSE: WMT)
Walmart is a hypermarket and department store operator with approximately 10,500 stores worldwide in 20 countries and employs 2.1 million staff globally.
The company most recently raised its quarterly dividend for fiscal 2024 (FY2024) ending 31 January 2024 to US$2.28 per share, up 2% year on year from US$2.24.
This improvement marks Walmart’s 50th consecutive dividend increase.
Like the other three companies above, Walmart also generated consistent free cash flow for the fiscal years 2021 through 2023.
For the first quarter of fiscal 2024 (1Q FY2024), the retailer eked out a small positive free cash flow of US$200 million.
Management expects revenue to increase by around 3.5% year on year for FY2024 and investors can be confident that Walmart can keep up its track record of free cash flow generation.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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