Many companies in recent years have had to stop raising their dividends or, worse, cut or suspend their payouts due to financial problems. That makes the ones with solid stripes by making their payouts all the more impressive. A small percentage of publicly traded companies have tended to increase their dividends for decades.
Just over fifty companies have achieved dividend growth for fifty years or more. Dubbed Dividend kingsthese companies have achieved sustainable dividend growth through wars, recessions, pandemics and other major events. Here it is a look at a trio of companies that have treated their investors like royalty over the years.
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ADP (NASDAQ:ADP) recently announced its latest dividend payment. The payroll and HR services company increased its payout by 10%, raising its quarterly rate to $1.54 per share, or $6.16 per year.
That was a milestone dividend increase for ADP. CEO Marcia Black commented on the payout in a press release: “It’s an exciting time as we celebrate our 50th consecutive year of dividend increases and 75 years of leading the way in workforce innovation. We are proud to belong to the elite group. from ‘Dividend Kings‘, which have a history of increasing dividends for at least 50 consecutive years, and we remain focused on continuing to deliver strong results for our shareholders.”
Several factors have contributed to ADP’s unstoppable dividend. The company supplies vital services to customersallowing it to generate stable and growing revenues. It also invests in innovation to stay ahead of the competition. In addition, ADP maintains an extremely strong one financial profile, putting it in an excellent position to weather economic storms.
Consolidated Edison (NYSE: ED) joined the elite group of Dividend Kings earlier this year. The utility increased its dividend payout by 2.5% in January to $0.83 per share per quarter and $3.24 per share. on an annual basis.
CFO Robert Hoglund commented on this achievement in a press release: “The 50th consecutive annual increase for shareholders, the longest period of consecutive annual dividend increases ever. utility in the S&P500 indexreflects our continued emphasis on providing returns to our investors while meeting the needs of our customers during the clean energy transition.”
Utilities tend to have a long track record of increasing their dividends. While Consolidated has the longest dividend growth streak of any utility in the S&P 500, while a few smaller peers have posted even longer dividend growth streaks. Utilities can achieve steady dividend growth because they generate stable cash flow, supported by government-regulated rate structures, and benefit from continued demand for electricity and gas. Meanwhile, Consolidated Edison has a conservative financial profile, including a reasonable target dividend payout ratio from 55% to 65% of his fixed income. That allows the company to save money to invest in expanding its activities, such as clean energy infrastructure.
