You can only count on death and taxes as the sure things in life, so finding consistently reliable dividend stocks is worth taking notice of.
I’m not talking about dividend stocks that have regularly rewarded shareholders for 10 years, 25 years or even 50 years. Those are certainly fantastic stocks to own. But income stocks that have paid dividends for 100 years or more are truly special.
These stocks have continued to share their wealth with investors through two world wars, the Great Depression, numerous recessions and global pandemics.
Dividend stocks also have a long history of beating the market. From the 1930s on, there has been no decade where dividend-paying stocks lost money. Even during the so-called “lost decade” of the 2000s when the total return for the S&P 500 was negative, dividend stocks still managed to post a 1.8% return.
Analysts at the Hartford Funds found that since 1960, dividend stocks contributed an astounding 85% of the total return of the benchmark index.
What follows are three dividend stocks that have some of the longest track records of making payouts to shareholders. All have paid dividends for at least 100 years.
Exxon Mobil (XOM)
Oil and gas giant Exxon Mobil (NYSE:XOM) has a history of paying dividends that began in 1908, or some 116 years. But it was not a straight line.
Exxon was born from John D. Rockefeller’s Standard Oil Trust that was founded in 1870. In 1911, it was broken up into 34 different companies under the Sherman Antitrust Act, one of which was Jersey Standard. In 1971, it officially changed its name to Exxon.
The oil stock is the largest integrated petroleum company with upstream, midstream and downstream assets. Particularly in recent years and especially during the pandemic, Exxon prioritized paying a dividend. When other oil and gas companies were cutting or suspending their dividends because oil prices plummeted to negative $37 per barrel, Exxon maintained its payout.
Exxon’s dividend of $3.80 per share yields 3.3% annually. It has also begun steadily raising the payout since 1984. The 40 consecutive years of increases make it a Dividend Aristocrat. Although that is no guarantee of future raises, with a free cash flow (FCF) payout ratio of 44% there are plenty of cash profits available for it to keep doing so.
General Mills (GIS)
Cereal maker General Mills (NYSE:GIS) has an even longer record than Exxon of paying a dividend. It began making payments to shareholders in 1898 and hasn’t stopped. Its history of dividend hikes isn’t nearly as long as the oil company, just 19 years, but it has grown the payout at a 4% compound annual growth rate (CAGR). Its FCF payout ratio is 61%, which puts it on the high side but not in the danger zone.
General Mills is the biggest cereal maker with a 34% share of the $12 billion market, somewhat ahead of the recently spun off W.K. Kellogg (NYSE:KLG) at 25%. Although the cereal aisle is experiencing a slowdown as consumer dairy consumption declines and they choose quick, convenient food options for breakfast instead, General Mills has a large and growing snacks division that is now its biggest single-product segment. In fiscal 2024, global segment sales of $4.3 billion represented 22% of total sales.
With GIS stock down 14% over the past year, its shares are attractively priced at 14 times expected earnings and FCF.
Procter & Gamble (PG)
Even longer than General Mills, consumer products giant Procter & Gamble (NYSE:PG) has paid dividends for 134 straight years. Even better, in April, the owner of well-known and loved brands like Crest, Charmin, Febreeze, Pampers and Tide raised its payout again by 7%. That makes it the 68th consecutive year it increased and firmly ensconces it as a Dividend King.
The quarterly dividend of $1.0065 per share yields 2.4% annually. With an FCF payout ratio of 65% the payout is both secure and has more room for growth.
Procter & Gamble saw 3% organic sales growth in its fiscal third quarter. It was remarkable in that it was the first time in five years the consumer products stock posted growth that was lower than the mid- to high-single-digit range. It shows the toll ongoing elevated inflation rates have as Procter & Gamble only raised prices by 3% instead of the 7% increase imposed in the first quarter.
That is because in periods of high prices, consumers will shift their spending to lower-cost store brands. Yet P&G continuously invests in product innovation giving its premium everyday basics and essentials standing with retailers and consumers.
Procter & Gamble stock is up 14% year-to-date and investors should expect continued growth in the quarters and years ahead.
On the date of publication, Rich Duprey held a LONG position in XOM and PG stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.