The past does not predict the future. But if a company has been paying dividends for a long time, that can give investors confidence in its ability to continue doing so. It shows that the company can weather many setbacks and innovate and launch new products to meet changing demand. Those are the key features investors want to see when considering long-term investments.
Three shares that have not only been around for a century, but have also been paying dividends for that long Coca-cola (NYSE:KO), Eli Lilly (NYSE: LLY)And Abbott Laboratories (NYSE: ABT). This is why these could be some of the safest stocks to add to your portfolio today.
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Coca-Cola has an iconic brand that is known all over the world. It’s a top position for Warren Buffett, and a big reason for that is its strong brand power. The products can be found in millions of households in hundreds of countries. Although the company is known for its cola products, it has evolved over the years and now has more than 200 brands, expanding beyond soft drinks to include coffee, tea and water.
The company has developed sugar-free products to meet changing customer demands, and has also expanded through acquisitions. Coca-Cola may not be the growth machine it once was, but it’s still a reliable company to invest in. It has generated $10.4 billion in profit over the past four quarters on revenue of $46.4 billion, with a profit margin of 22%.
Coca-Cola has paid a dividend dating back to 1893. Today, it is part of an exclusive club of Dividend Kings, who have increased their dividend payments for more than 50 years in a row. The dividend yields 3%, and if your priority is generating a safe and recurring dividend, Coca-Cola could be an ideal stock to add to your portfolio now.
Eli Lilly is an interesting growth stock to buy as investors are optimistic about the prospects of the weight loss market. The company has an incredibly promising product in the form of tirzepatide, which has been approved by regulators for the treatment of diabetes (Mounjaro) and weight loss (Zepbound). At its peak, tirzepatide may be the best-selling drug everwith some analysts predicting annual sales will eventually exceed $50 billion.
To put how big that is into perspective, consider that Eli Lilly generated $34 billion in sales last year all its products. With so much excitement about Eli Lilly’s potential, it’s no wonder healthcare stocks are up more than 200% in the past three years.
But that’s only part of the story for investors, as Eli Lilly is also a fantastic dividend stock to own. It has been paying dividends to its shareholders since 1885. While the equity return may not seem impressive at just 0.6%, it would have been even lower if not for the generous gains of recent years. doubled its dividend since 2019. In November 2021, the stock was trading around $250. At that price, the current dividend would yield 2.1% and be higher than S&P500 average 1.2%. However, investors would probably much rather take advantage of the stock’s incredible gains in recent years.
Considering Eli Lilly’s fantastic growth prospects plus its growing dividend, this is another great income stock to buy and hold for years.
Abbott Laboratories rounds out this list of top income stocks. The great thing about this stock is the diversity it offers investors. Abbott is a testing company, a pharmaceutical company, and a medical device manufacturer, all rolled into one. It also generates a significant portion of its revenue from food products, including its leading Insurance brand.
This diversification gives Abbott plenty of opportunities to grow, diversify and adapt to changing market conditions. When there was a great need for testing as COVID concerns were rampant, that part of the business grew dramatically. When the nutritional segment struggled due to a recall of baby food products, the company was able to weather the storm. Over the past nine months, the company has reported positive growth across all its segments except diagnostics, which is lower than stronger year-ago comparables due to COVID test sales.
Abbott is experiencing excellent growth in its medical device segment. The demand for continuous glucose meters (which help people with diabetes control their glucose levels) is particularly high. For the period ended September 30, these products generated $1.6 billion in revenue, which increased more than 19% year over year.
The company has been paying dividends since 1924 and, like Coca-Cola, is a Dividend King. Abbott’s strong diversification and modest 66% payout ratio make it highly likely that more dividend hikes will be in store for investors who buy and hold the stock.
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David Jagielski has no position in the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories. The Motley Fool has a disclosure policy.
3 Ultra-Safe Dividend Stocks That Have Been Paying Dividends for Over 100 Years Originally published by The Motley Fool
