5 Dividend Kings That Won't Abdicate Their Thrones

Updated

With millions of investors scrambling for more income from their investment portfolios, reliable dividend-paying stocks have never seen more demand. For companies that have been fortunate enough to increase their annual dividend payments year in and year out over the long haul, the status of being a top dividend stock is part of their corporate identity.

In order to stay atop the dividend stock world, though, companies that have long streaks of dividend increases have to make sure they give shareholders their expected raises before the end of the year. Given what's at stake, expecting the elite dividend stocks to keep their streaks alive is about the closest you'll ever get to a sure thing in investing.

The ultimate mark of distinction for dividend-paying stocks is gaining status as a Dividend Aristocrat. Although the standards for access to the Aristocrats list were relaxed this year, a company still needs to demonstrate a long-term commitment to raising payouts to shareholders. With a minimum streak of 20 years of annual increases, the roughly 50 stocks that qualify as Dividend Aristocrats have proven their ability to sustain their dividends through several challenging periods for the overall economy.


In particular, the financial crisis was a tough time for Dividend Aristocrats. Many financial stocks that previously qualified got kicked off the list when they had to cut their dividends for the first time in decades. Surviving the cash crunch of 2008 while enduring the drain on liquidity that dividends cause was a feat that even some of the largest corporations couldn't match.

But several stocks routinely wait until the last quarter of the year before they implement their dividend increases. Let's take a look at five Dividend Aristocrats you can expect to boost their payouts in the next few months.

(NYS: AFL) , 29-year streak of consecutive annual dividend increases
Aflac is well-known for its screeching duck ads, but the company has actually overcome some huge hurdles to keep its place among the Dividend Aristocrats. With most of its revenue coming from Japan, Aflac's stock fell hard following the island nation's earthquake and tsunami in early 2011. Through the disaster, though, the insurer was able to stay focused and minimize the earnings hit, and the stock and its fundamentals have recovered nicely. Aflac tends to declare dividend increases in late October, so expect an announcement around then.

(NYS: ADM) , 36-year streak
As a mainstay in the agricultural sector, Archer Daniels Midland rises and falls with the state of the farm economy. This year's drought will unquestionably take its toll on farming, and crop insurance claims could be the highest on record. Yet with estimates suggesting that taxpayers may foot the bill for 50% to 80% of claims, ADM should still be able to grow. Last year, the company announced its dividend increase at its annual meeting in early November.

(NYS: BDX) , 40-year streak
Simple medical equipment may not be the sexiest business out there, but it's something that people always need. Becton has ridden continuing demand to a four-decade streak of dividend increases, and if history is any guide, the company will renew that streak in late November, when it has traditionally announced its higher payouts.

(NYS: EMR) , 55-year streak
With the longest streak of this group, Emerson typically announces dividend increases in early November. Although the company's earnings growth is seen as being minimal this year, Emerson's power management business produces more than enough profit to sustain a higher payout.

(NYS: MCD) , 35-year streak
The fast-food giant enjoyed a strong run of stock performance for several years, but 2012 has been a challenging one for the company. Threats of an emerging-market slowdown and Europe's ongoing troubles have weighed on McDonald's. But given that the company pays out only half its earnings in dividends, McDonald's shouldn't have trouble extending its streak. Last year, the announcement came on Sept. 22, so look for a repeat performance in the next couple of weeks.

If all goes well, shareholders in these five companies should be getting paid even more within the next few months. With predictable histories of increased payouts, these stocks give astute investors a chance to buy shares before they make their dividend announcements.

But these aren't the only good dividend stocks out there. For some more great ideas, check out the Fool's special report, "Secure Your Future With 9 Rock-Solid Dividend Stocks." It's yours today absolutely free, so don't wait -- get your copy today.

The article 5 Dividend Kings That Won't Abdicate Their Thrones originally appeared on Fool.com.

Fool contributor Dan Caplinger likes money in hand. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's, Emerson Electric, Becton Dickinson, and Aflac. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy is worth its weight in gold.

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