Many companies have either had to stop increasing their dividends or, worse yet, cut or suspend their payouts because of financial troubles over the years. That makes those with unbroken streaks of growing their payouts all the more impressive. A tiny percentage of public companies have multidecade streaks of increasing their dividends.
A little more than 50 companies have delivered 50 or more years of dividend growth. Dubbed Dividend Kings, these companies have delivered durable dividend growth through wars, recessions, pandemics, and other major events. Here’s a look at a trio of companies that have treated their investors like royalty over the years.
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ADP (NASDAQ: ADP) recently declared its latest dividend payment. The payroll and HR services provider increased its payout by 10%, raising the quarterly rate to $1.54 per share, or $6.16 annually.
That was a milestone dividend increase for ADP. CEO Marcia Black commented on the payout in a press release: “It’s an exciting time as we mark our 50th consecutive year of dividend increases and celebrate 75 years of being at the forefront of workforce innovation. We are proud to be included among the elite group of ‘Dividend Kings‘, who have a history of increasing dividends for at least 50 consecutive years, and we remain focused on continuing to deliver strong results for our shareholders.”
Several factors have contributed to ADP’s unstoppable dividend. The company provides vital services to customers, enabling it to generate steady and growing revenue. It also invests in innovation to stay ahead of the competition. In addition, ADP maintains an extremely strong financial profile, putting it in an excellent position to weather economic storms.
Consolidated Edison (NYSE: ED) joined the elite group of Dividend Kings earlier this year. The utility increased its dividend payment by 2.5% in January to $0.83 per share each quarter and $3.24 on an annual basis.
CFO Robert Hoglund commented on that feat in a press release: “The 50th consecutive annual increase for stockholders, the longest period of consecutive annual dividend increases of any utility in the S&P 500 index, reflects our continued emphasis on providing a return to our investors while meeting the needs of our customers during the clean energy transition.”
Utilities tend to have long records of growing their dividend. While Consolidated has the longest dividend growth streak of a utility in the S&P 500, a few smaller peers have delivered even longer dividend growth streaks. Utilities can deliver steady dividend growth because they generate stable cash flow backed by government-regulated rate structures and benefit from continued demand for electricity and gas. Meanwhile, Consolidated Edison has a conservative financial profile, including targeting a reasonable dividend payout ratio of 55% to 65% of its steady earnings. That enables it to retain cash to invest in expanding its operations, like clean energy infrastructure.
