Investing in dividend stocks can be a lucrative way to maximize your returns and build long-term wealth. But not all dividend stocks are created equal, and investors seeking to maximize their income should look no further than the “Dividend Kings,” an elite group of stocks that have paid increasing dividends for 50 or more consecutive years.
Dividend Kings vs Dividend Aristocrats
Dividend Aristocrats are companies with three specific characteristics:
- It must be an S&P 500 stock
- It must pay consistent dividends and have increased its dividend for at least 25 years running
- It must have a market capitalization of at least $3 billion
The criteria to be on the Dividend Kings List are not as stringent. The company doesn’t need to be a constituent of the S&P 500 Index nor does it have to meet a minimum capitalization number. It does, however, need to demonstrate one key trait:
- It must have been paying increasing dividends for at least 50 years straight.
Investing in a Dividend King
The key reason for investing in Dividend Kings is the reliability of its payouts.
The world has witnessed wars, economic downturns, recessions, financial crises, banking collapses, and more over the past 5 decades. And to continually increase the dividend over 50 years or more shows just how resilient a dividend king is.
For some companies, simply surviving all this has been a triumph. There have been hundreds of companies that have filed for bankruptcy. But the Dividend Kings have continued regardless, to reward their shareholders with increasing dividends – even during recessions. And while the past cannot be a predictor of the future, such resilience and capacity to deliver returns through all market conditions are at the very least commendable.
That said, however, Dividend Kings are usually mature companies, operating in mature markets.
Companies like Coca-Cola, P&G, Abbott, Johnson & Johnson have pretty much established their business and brand across the globe. This is also why they are able to continue paying a good portion of their profits back to shareholders as they do not need to reinvest them to aggressively grow their market share.
In other words, Dividend Kings are usually slow-growth stocks. In fact, four of the five dividend kings with the longest records of dividend increases have underperformed the S&P 500 over the past 10 years.
Dividend Kings 2023
Here is the current list of Dividend Kings and dividend yield at the time of writing:
| Ticker | Name | Industry | Dividend Yield |
| ABBV | AbbVie, Inc. | Healthcare | 3.6% |
| ABM | ABM Industries, Inc. | Industrials | 1.9% |
| ABT | Abbott Laboratories | Healthcare | 1.9% |
| AWR | American States Water Co. | Utilities | 1.6% |
| BDX | Becton, Dickinson & Co. | Healthcare | 1.4% |
| BKH | Black Hills Corporation | Utilities | 3.5% |
| CBSH | Commerce Bancshares, Inc. | Financial Services | 1.6% |
| CDUAF | Canadian Utilities Ltd. | Utilities | 4.8% |
| CINF | Cincinnati Financial Corp. | Financial Services | 2.6% |
| CL | Colgate-Palmolive Co. | Consumer Defensive | 2.4% |
| CSVI | Computer Services, Inc. | Technology | 0.0% |
| CWT | California Water Service Group | Utilities | 1.6% |
| DOV | Dover Corp. | Industrials | 1.4% |
| EMR | Emerson Electric Co. | Industrials | 2.2% |
| FMCB | Farmers & Merchants Bancorp | Financial Services | 1.6% |
| FRT | Federal Realty Investment Trust. | Real Estate | 4.0% |
| FUL | H.B. Fuller Company | Basic Materials | 1.0% |
| GPC | Genuine Parts Co. | Consumer Cyclical | 2.0% |
| GRC | Gorman-Rupp Co. | Industrials | 2.6% |
| GWW | W.W. Grainger, Inc. | Industrials | 1.2% |
| HRL | Hormel Foods Corp. | Consumer Defensive | 2.3% |
| ITW | Illinois Tool Works, Inc. | Industrials | 2.2% |
| JNJ | Johnson & Johnson | Healthcare | 2.5% |
| KMB | Kimberly-Clark Corp. | Consumer Defensive | 3.4% |
| KO | Coca-Cola Co. | Consumer Defensive | 2.8% |
| LANC | Lancaster Colony Corp. | Consumer Defensive | 1.7% |
| LEG | Leggett & Platt, Inc. | Consumer Cyclical | 5.2% |
| LOW | Lowe`s Cos., Inc. | Consumer Cyclical | 2.0% |
| MMM | 3M Co. | Industrials | 4.7% |
| MO | Altria Group, Inc. | Consumer Defensive | 8.0% |
| MSA | MSA Safety, Inc. | Industrials | 1.4% |
| MSEX | Middlesex Water Co. | Utilities | 1.4% |
| NDSN | Nordson Corp. | Industrials | 1.1% |
| NFG | National Fuel Gas Co. | Energy | 2.9% |
| NWN | Northwest Natural Holding Co. | Utilities | 4.0% |
| PEP | PepsiCo, Inc. | Consumer Defensive | 2.5% |
| PG | Procter & Gamble Co. | Consumer Defensive | 2.4% |
| PPG | PPG Industries, Inc. | Basic Materials | 1.9% |
| PH | Parker-Hannifin Corp. | Industrials | 1.8% |
| SCL | Stepan Co. | Basic Materials | 1.3% |
| SJW | SJW Group | Utilities | 1.8% |
| SWK | Stanley Black & Decker, Inc. | Industrials | 4.0% |
| TGT | Target Corp | Consumer Defensive | 2.9% |
| TNC | Tennant Co. | Industrials | 1.6% |
| TR | Tootsie Roll Industries, Inc. | Consumer Defensive | 0.8% |
| SYY | Sysco Corp. | Consumer Defensive | 2.4% |
| UVV | Universal Corp. | Consumer Defensive | 5.8% |
| VFC | VF Corp. | Consumer Cyclical | 7.2% |
Who Should Invest In a Dividend King?
Because of their stability and track record, Dividend Kings are great for retirees. They are usually less volatile and pay consistent and growing dividends – which is great for cash flow.
And for risk-averse investors who are starting young, a DRIP (Dividend Re-Investment Plan) can result in higher dividend income in future years.