One of the best decisions an investor can make is to look out for a high profile company that has been paying great dividends consistently for years and invest in it. Once you determine the best company you want to invest in, all you have to do is sit around and keep earning passive income every quarter.
It is even better if you can find companies that have been consistently raising their dividend yields, so that you can keep earning more and more each quarter passes. And this is what exactly Dividend Aristocrats offer.
Dividend Aristocrats are the stocks of those companies listed in the S&P 500 Index that have been raising their dividend yields for more than 25 years on a consistent basis.
Below mentioned are three such companies which have been performing well for the past 25 years or more and are now trading at a reasonable price, making this October the right time to grab some of their stock.
Stanley Black & Decker
Obtaining the status of Dividend Aristocrat is not an easy feat to achieve. However, for Stanley Black & Decker (NYSE: SWK), this just seems to be a child’s play. As mentioned earlier, to achieve the status of Dividend Aristocrat a company must have been raising its dividends for 25 consecutive years and Stanley Black & Decker has been doing it for an astounding 49 years in a row.
Two more years of consistent performance and the company will be joining a new group called Aristocrat Kings, a status granted to companies that have increased their dividends for 50 plus consecutive years.
Though the company’s dividend yield of 2% might not excite many investors, its consistency in raising dividends definitely does. Aside from the the fact that Stanley Black & Decker has been increasing its dividend payout consistently, the company has seen a real growth in the recent years. Its revenue growth back in 2000 was just over $2 billion, and by the end of 2015 it has crossed a whopping $11 billion.
The reason for this massive growth, aside from the company’s leadership position in power tools, is that Stanley Black & Decker has also ventured into security systems and industrial business which has propelled its revenue growth even further. Last year the company has generated an income of $4.1 billion from these sectors alone.
The company’s shares are currently trading at less than 16 times its forward earnings. Looking at its consistent performance over the years, buying a few of its stock dividends which are now trading reasonably low might be a good idea.
AT&T (NYSE: T) has always occupied a unique position among the Dividend Aristocrats. It is the only telecommunications company, which is not a REIT, that has the highest dividend yield of 4.7%. Last year, the company has increased its revenue growth by 25% despite its underperforming stock price.
Surprisingly, even after achieving such feats, AT&T’s share prices are trading low. They are currently trading at 17 times its forward earnings. This is significantly low compared to the S&P’s PE ratio, which stands at 25 time forward earnings.
One possible reason for investors to be pessimistic about investing in AT&T could be the competition it is facing from companies such as Sprint (NYSE:S) and T-Mobile (NYSE:PCS). Investors have their own concerns about the company’s future prospects.
However, at this point investors should also think about the new ventures the company is stepping into. It is investing big time in Mexico and Latin America in an effort to extend its operations. It has also invested in pioneering Internet of Things (IoT) and is almost on the verge of excelling in the field of connected devices and automotive systems.
Considering its new businesses, past performances, consistency in increasing dividend yields and its current low share price, buying a few stock dividends from AT&T shouldn’t be a bad investment.
As the US population tends to gray gradually, more and more companies from the health care sector will gain their foothold in the country. One such Dividend Aristocrat health care company that has already recognized this trend very early is Medtronic (NYSE: MDT), one of the largest manufacturers of medical-devices in the world.
The company has been around for decades and has pioneered in manufacturing medical devices that cater to various health conditions such as brain modulation, cardiovascular diseases, neurovascular and spine-related diseases, diabetes and many more.
Over the years, the company has expanded its business to many countries and today 44% of its revenue is generated from overseas divisions. With a stable increase in its revenue, the company has been raising its dividends for the past 39 consecutive years, rewarding its long-term shareholders promptly and on par with its growth.
Despite this growth and consistent performance, the company’s shares currently only consumes 40% of its forward earnings. Medtronic’s stock is currently trading at 17 times its forward earnings.
Analysts are expecting that the company will be recording a revenue growth of over 8% in the next five years. With such bright prospects, excellent dividend paying history, and a lot of room to grow, Medtronic’s dividend stocks are worth a buy, especially considering that they are trading so low.