Market Insider

Stocks with Good Track Records as Dividend Payers


Bespoke Investment Group crunched the numbers and found a list of stocks that it sees as relatively safe dividend plays.

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Bespoke screened the S&P 500 last week , looking for companies that have consistently raised dividends for at least 10 years. They also looked for companies that yield more than 2.5 percent and are paying out less than half of estimated earnings for the current year.

Bespoke co-founder Paul Hickey, on "Street Signs" Tuesday, says stocks that have built a reputation for consistently paying dividends are a relatively safe place to look for yield.

“While they aren’t necessarily glamorous names, they are companies that have managed to raise their dividends even during one of the worst economic calamities in more than a generation. Investors who are on the sidelines looking to gain equity exposure, are probably unlikely to go right into high growth names, so these stocks provide a good area of the pool to dip their foot in,” notes Hickey, who did the screen.

“What I would say about these stocks is if you have 20 percent year in the market, they’re probably going to underperform the market, but if you have a down year, they’re going to outperform. They’re almost like fixed income equities,” he said. “…Also they were able to raise dividends through 2007, 2008, 2009. They were able to navigate through those years. They are pretty solid companies.”

Hickey says it seems more companies are raising dividends this year.

“Compared to the last three years, I think we’re going to see much more in the way of dividend raises. There’s more clarity out there. There’s a general view that the worst is behind us. Most people would think that companies have a little bit more visibility now. With increased visibility, they’ll be more likely to part with some of their cash,” said Hickey.

The companies Hickey found that met his criteria are listed below. He said utilities have the best reputation as dividend raisers, but what he in fact found was that the consistent payers came from a diverse group of industries.

Bespoke’s List:

  • Conoco Phillips — Yield: 3.65
  • NextEra Energy — Yield: 3.64
  • Johnson and Johnson — Yield: 3.49
  • Abbott Health — Yield: 3.46
  • Bemis — Yield: 3.18
  • Northeast Utilities — Yield: 3.09
  • Pepsico — Yield: 3.09
  • Emerson Electric — Yield: 3.07
  • Chevron — Yield: 3.03
  • Linear Technology — Yield: 2.92
  • McDonald’s — Yield: 2.80
  • Coca Cola — Yield: 2.75
  • MMM — Yield: 2.68
  • Aflac — Yield: 2.67
  • General Dynamics — Yield: 2.63
  • Norfolk Southern — Yield: 2.59
  • Illinois Tool Works — Yield: 2.57
  • Air Products — Yield: 2.56
  • ACE Ltd — Yield: 2.55
  • Colgate Palmolive — Yield: 2.54

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