Updated on September 2nd, 2021 by Bob Ciura
Spreadsheet data updated daily
The Dividend Kings are the best-of-the-best in dividend longevity.
What is a Dividend King? A stock with 50 or more consecutive years of dividend increases.
The downloadable Dividend Kings Spreadsheet List below contains the following for each stock in the index, among other important investing metrics:
- Payout ratio
- Dividend yield
- Price-to-earnings ratio
You can see the full downloadable spreadsheet of all 32 Dividend Kings (along with important financial metrics such as dividend yields, payout ratios, and price-to-earnings ratios) by clicking on the link below:
There are currently 32 Dividend Kings, including recent additions such as PPG Industries (PPG), Black Hills Corp. (BKH), Sysco (SYY), Universal Corporation (UVV) and National Fuel Gas (NFG). Each Dividend King satisfies the primary requirement to be a Dividend Aristocrat (25 years of consecutive dividend increases) twice over.
Editor’s Note: After review, Illinois Tool Works (ITW) and Target Corporation (TGT) have been removed from our lists, as they do not qualify as Dividend Kings. You can read more about this here.
Not all Dividend Kings are Dividend Aristocrats. This unexpected result is because the ‘only’ requirement to be a Dividend Kings is 50+ years of rising dividends, whereas Dividend Aristocrats must have 25+ years of rising dividends, be a member of the S&P 500 Index, and meet certain minimum size and liquidity requirements.
Table of Contents
How To Use The Dividend Kings List to Find Dividend Stock Ideas
The Dividend Kings list is a great place to find dividend stock ideas. However, not all the stocks in the Dividend Kings list make a great investment at any given time.
Some stocks might be overvalued. Conversely, some might be undervalued – making great long-term holdings for dividend growth investors.
For those unfamiliar with Microsoft Excel, the following walk-through shows how to filter the Dividend Kings list for the stocks with the most attractive valuation based on the price-to-earnings ratio.
Step 2: Follow the steps in the instructional video below. Note that we screen for price-to-earnings ratios of 15 or below in the video. You can choose any threshold that best defines ‘value’ for you.
Alternatively, following the instructions above and filtering for higher dividend yield Dividend Kings (yields of 2% or 3% or higher) will show stocks with 50+ years of rising dividends and above-average dividend yields.
Looking for businesses that have a long history of dividend increases isn’t a perfect way to identify stocks that will increase their dividends every year in the future, but there is considerable consistency in the Dividend Kings.
The 5 Best Dividend Kings Today
The following 5 stocks are our top-ranked Dividend Kings today, based on expected annual returns through 2026. Stocks are ranked in order of lowest to highest expected annual returns.
Total returns include a combination of future earnings-per-share growth, dividends, and any changes in the P/E multiple.
Dividend King #5: Farmers & Merchants Bancorp (FMCB)
- 5-Year Annual Expected Returns: 9.2%
Founded in 1916, Farmers & Merchants Bancorp is a locally owned and operated community bank with 32 locations in California. Due to its small market cap (~$700 million) and its low liquidity, it passes under the radar of most investors. Nevertheless, F&M Bank has paid uninterrupted dividends for 86 consecutive years and has raised its dividend for 56 consecutive years.
The company is conservatively managed and, until four years ago, had not made an acquisition since 1985. However, in the last four years, it has begun to pursue growth more aggressively. It acquired Delta National Bancorp in 2016 and increased its locations by 4. Moreover, in October-2018, it completed its acquisition of Bank of Rio Vista, which has helped F&M Bank to further expand in the San Francisco East Bay Area.
On July 26th, the company reported second-quarter financial results. FMCB reported net income of $16.2 million, an increase of 12.9% from the second quarter of 2020. On a per share basis, earnings were $20.45, up 13.4% year-over-year.
Shares trade for a P/E ratio of ~11, compared with our fair value estimate of 12. An expanding valuation multiple could increase annual returns modestly each year. Combined with 5% expected EPS growth and the 1.7% dividend yield, total returns are expected to reach 9.2% per year over the next five years.
Dividend King #4: Stanley Black & Decker (SWK)
- 5-Year Annual Expected Returns: 9.2%
Stanley Black & Decker is a world leader in power tools, hand tools, and related items. The company holds the top global position in tools and storage sales. Stanley Black & Decker is second in the world in the areas of commercial electronic security and engineered fastening.
Source: Investor Presentation
The company reported second quarter results on 7/22/2021. Revenue grew 36.5% to $4.3 billion, topping estimates by $70 million. Adjusted earnings–per–share of $3.08 compared very favorably to adjusted earnings–per–share of $1.60 in the prior year.
Organic growth remains elevated with a 33% increase in the second quarter. Sales for Tools & Storage, the largest segment within the company, were higher by 46%, the fourth consecutive double–digit and the second 40%+ quarter.
Stanley Black & Decker raised guidance once again. The company now expects adjusted earnings–per–share in a range of $11.35 to $11.65 for 2021, up from $10.70 to $11.00 and $9.70 to $10.30 previously.
The stock has a 1.6% dividend yield, and we expect 8% annual EPS growth. With a small reduction from a declining P/E multiple, total returns are expected to reach 9.2% per year.
Dividend King #3: National Fuel Gas (NFG)
- 5-Year Annual Expected Returns: 10.0%
National Fuel Gas Co. is a diversified energy company that operates in five business segments: Exploration & Production, Pipeline & Storage, Gathering, Utility, and Energy Marketing. The company’s largest segment is Exploration & Production.
Source: Investor Presentation
In early August, National Fuel Gas reported (8/5/21) financial results for the third quarter of fiscal 2021. The company grew its production by an impressive 48% over last year’s quarter, primarily thanks to the acquisition of Appalachian assets. In addition, the average price of natural gas rose 15%, from $1.92 in last year’s quarter to $2.20.
As a result, adjusted earnings–per–share grew 63%, from $0.57 to $0.93, and exceeded analysts’ consensus by $0.11. Management raised the dividend by 2.2% and thus the company has now grown its dividend for 51 consecutive years.
The pandemic has affected the natural gas market much less than the oil market. In addition, the pipeline & storage and gathering segments provide a strong buffer to the earnings of National Fuel Gas. The two segments grew their EBITDA 5% and 43%, respectively, in the latest quarter thanks to strong volume growth.
Management raised its guidance for a fourth consecutive quarter thanks to favorable commodity prices. It now expects earnings–per–share of $4.05–$4.15 (vs. previous guidance of $3.85–$4.05), for 40% growth at the mid–point. It also initiated guidance for earnings–per–share of $4.40–$4.80 in fiscal 2022, implying 12% growth at the mid–point, thanks to an improved outlook for natural gas prices and the completion of the FM100 expansion project.
Based on expected adjusted EPS of $4.05, NFG stock trades for a P/E of 12.9. Our fair value estimate is a P/E of 15, implying that the stock is undervalued. In addition, NFG stock yields 3.5%, while we also expect 4% annual EPS growth. Total returns are expected to reach 10% per year.
Dividend King #2: ABM Industries (ABM)
- 5-Year Annual Expected Returns: 10.6%
ABM Industries has increased its dividend for 53 consecutive years. ABM Industries is a leading provider of facility solutions, which includes janitorial, electrical & lighting, energy solutions, facilities engineering, HVAC & mechanical, landscape & turf, and parking.
Source: Investor Presentation
ABM Industries reported its second-quarter earnings results (fiscal 2021) on June 9th. Revenue of $1.5 billion was flat from the previous year’s quarter. Despite flat revenue, margin expansion helped the company grow its bottom line. Earnings-per-share of $0.82 beat analyst estimates by $0.11 per share, representing 37% year-over-year growth. Management also increased its earnings–per–share guidance to $3.30 to $3.50 for the full fiscal year.
ABM stock yields 1.7%. Due to the low dividend payout ratio and its very stable, recession–resilient business model, ABM Industries’ dividend looks very safe.
Shares also look significantly undervalued, with a fiscal 2021 price-to-earnings ratio of 13, which is well below our fair value estimate of 17.5.
We expect total annual returns of 10.6% over the next five years, driven by 5% expected EPS growth, the 1.7% dividend yield, and a ~5.5% annual boost from a rising P/E multiple.
Dividend King #1: Lowe’s Companies (LOW)
- 5-Year Annual Expected Returns: 10.7%
Lowe’s Companies is the second-largest home improvement retailer in the US (after Home Depot). The company operates more than 2,200 home improvement and hardware stores in the U.S. and Canada.
Lowe’s reported second quarter results on August 18th. Total sales for the quarter came in at $27.6 billion compared to $27.3 billion in the same quarter a year ago. Comparable sales decreased 1.6% year–over–year, while the U.S. home improvement comparable sales decreased 2.2%.
Net earnings of $3.0 billion rose from $2.8 billion in 2Q 2020. Diluted earnings per share of $4.25 rose 13.6% from $3.74 a year earlier. After adjusting for strategic review costs, EPS of $4.25 was a 13.3% increase from $3.75.
The company repurchased 16.4 million shares in the quarter for $3.1 billion. Additionally, they paid out $430 million in dividends. The company remains in a strong liquidity position with $4.8 billion of cash and cash equivalents.
The previous outlook of $9 billion in share repurchases was maintained following the first quarter, and sales momentum is tracking for higher sales than anticipated for revenue of roughly $92 billion (a 30% comparable sales growth on a two–year basis.
We forecast 7% annual EPS growth over the next five years. Lowe’s has a long runway of growth up ahead.
Another key to Lowe’s success has been its booming e-commerce platform. This is a key differentiator between successful retailers like Lowe’s and the many retailers that are reporting losses or going out of business. Lowe’s is benefiting right alongside the e-commerce boom.
Lowe’s enjoys competitive advantages from scale and brand power as it operates in a duopoly with Home Depot. Neither of the two are expanding their store count significantly, and neither is interested in a price war. Both should remain highly profitable, as the home improvement market in the US is large enough for two companies to succeed.
Based on expected EPS of $11.01 for the current fiscal year, Lowe’s stock trades for a P/E ratio of 17.5. Our fair value estimate is a P/E of 20. The combination of multiple expansion, 7% expected EPS growth and the 1.7% dividend yield lead to total expected returns of 10.7% per year through 2026.
Analysis Reports On All 32 Dividend Kings
All 32 Dividend Kings are listed below by sector. You can access detailed coverage of each by clicking on the name of each Dividend King. Additionally, you can download our newest Sure Analysis Research Database report for each Dividend King as well.
Performance Of The Dividend Kings
The Dividend Kings under-performed versus the S&P 500 ETF (SPY) in August 2021. Return data for the month is shown below:
- Dividend Kings August 2021 total return: 0.6%
- SPY August 2021 total return: 2.0%
Stable dividend growers like the Dividend Kings tend to under-perform in bull markets, and outperform on a relative basis during bear markets.
The Dividend Kings are not officially regulated and monitored by any one company. There’s no Dividend King ETF. This means that tracking the historical performance of the Dividend Kings can be difficult. More specifically, performance tracking of the Dividend Kings often introduces significant survivorship bias.
Survivorship bias occurs when one looks at only the companies that ‘survived’ the time period in question. In the case of Dividend Kings, this means that the performance study does not include ex-Kings that reduced their dividend, were acquired, etc.
But with that said, there is something to be gained from investigating the historical performance of the Dividend Kings. Specifically, the performance of the Dividend Kings shows that ‘boring’ established blue-chip stocks that increase their dividend year-after-year can significantly outperform over long periods of time.
Notes: S&P 500 performance is measured using the S&P 500 ETF (SPY). The Dividend Kings performance is calculated using an equal weighted portfolio of today’s Dividend Kings, rebalanced annually. Due to insufficient data, Farmers & Merchants Bancorp (FMCB) returns are from 2000 onward. Performance excludes previous Dividend Kings that ended their streak of dividend increases which creates notable lookback/survivorship bias. The data for this study is from Ycharts.
In the next section of this article, we will provide an overview of the sector and market capitalization characteristics of the Dividend Kings.
Sector & Market Capitalization Overview
The sector and market capitalization characteristics of the Dividend Kings are very different from the characteristics of the broader stock market. The following bullet points show the number of Dividend Kings in each sector of the stock market.
- Industrial: 7
- Consumer Defensive: 9
- Utilities: 5
- Consumer Cyclical: 2
- Financial Services: 3
- Basic Materials: 3
- Real Estate: 1
- Healthcare: 1
- Energy: 1
The Dividend Kings are overweight in the Industrials, Consumer Defensive, and Utilities sectors. Interestingly, The Dividend Kings have no exposure to the Technology sector, which is the largest component of the S&P 500 index.
The Dividend Kings also have some interesting characteristics with respect to market capitalization. These trends are illustrated below.
- 3 Mega caps ($200 billion+ market cap; JNJ, PG, and KO)
- 14 Large caps ($10 billion to $200 billion market cap)
- 11 Midcaps ($2 billion to $10 billion)
- 4 Small caps ($300 million to $2 billion)
Interestingly, 15 out of the 32 Dividend Kings have market capitalizations below $10 billion. This shows that corporate longevity doesn’t have to be accompanied by massive size.
Screening to find the best Dividend Kings is not the only way to find high quality dividend growth stock ideas.
Sure Dividend maintains similar databases on the following useful universes of stocks:
There is nothing magical about investing in the Dividend Kings. They are simply a group of high-quality businesses with shareholder-friendly management teams that have strong competitive advantages.
Purchasing businesses with these characteristics at fair or better prices and holding them for long periods of time will likely result in strong long-term investment performance.
The most appealing part of investing is that you have unlimited choice. You can buy into mediocre businesses, or just the excellent companies. As Warren Buffett says:
“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
– Warren Buffett
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