Dividend Kings are amongst the very best income stocks available on the market. Any corporation able to raising its payouts for 50 consecutive years — the requirement to turn out to be a Dividend King — has an incredibly strong business able to navigating company-specific challenges and economic peaks and troughs.
So, taking a look at the list of Dividend Kings is a superb start for investors trying to search out stocks that may repeatedly raise their payouts for a lifetime. Let’s consider two firms on this elite group with the precise qualities long-term income investors want: Coca-Cola(NYSE: KO) and Abbott Laboratories(NYSE: ABT).
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Few businesses are higher known worldwide than Coca-Cola. The corporate owns a portfolio of beverage brands across multiple categories: soft drinks, alcoholic beverages, tea, coffee, sports drinks, juices, and more.
The corporate also has an in depth geographical footprint. It’s hard to search out a single country where it doesn’t operate and where children won’t get excited on the sight of its famous logo. Having a recognizable brand is a robust competitive advantage that has helped generate regular financial results and continuous dividend raises.
The corporate’s streak as a Dividend King stands at 62 years, and there doesn’t appear to be any end in sight. True, it is not a very attractive growth company (it hasn’t been for some time). Within the third quarter, revenue decreased by 1% 12 months over 12 months to $11.9 billion. Adjusted earnings per share (EPS) were up 5% 12 months over 12 months to $0.77. Investors weren’t impressed with the performance for the period, which caused the stock price to dip.
Nonetheless, Coca-Cola continues to prove its resilience. Even up to now few years, when consumers have needed to cope with inflation, the corporate’s unit volume has remained respectable. It fell barely by 1% 12 months over 12 months within the third quarter. In other words, people proceed to purchase the corporate’s products at nearly the identical volume — despite widely available alternatives — even when its prices rise.
Coca-Cola has also evolved with the times, adapting to worries over potential health concerns by offering low-sugar options for a few of its drinks. It should remain a well-established leader in its area of interest for a very long time while still rewarding shareholders with dividend hikes.
It currently offers a forward yield of three.10%, in comparison with the S&P 500‘s average of 1.32%. That is one dividend stock investors can safely keep of their portfolios for good.
Abbott Laboratories is a medical device leader with a protracted history of innovations. The corporate’s business spans three other segments: nutrition, established pharmaceuticals, and diagnostics.
Abbott has continued to deliver strong financial results despite several headwinds. The healthcare giant’s business struggled within the early days of the pandemic for the reason that demand for its medical devices dropped. Then, it needed to navigate difficult conditions like everyone else. The corporate also handled issues inside its nutrition business that resulted in lawsuits.
Lastly, its diagnostics segment, which was its saving grace through the early pandemic days, has been inconsistent because the outbreak has receded up to now couple of years.
Despite all that, results remain robust. Within the third quarter, sales increased by 4.9% 12 months over 12 months to $10.6 billion. Excluding the impact on its coronavirus diagnostic business, sales increased 8.2% organically in comparison with the year-ago period. Adjusted EPS of $1.21 climbed by about 6% 12 months over 12 months.
Abbott’s business has been an image of stability for a very long time. The corporate has deep experience navigating the healthcare industry, which is one of the crucial regulated.
It also has a repute in its area of interest. Physicians are like the remainder of us: They have an inclination to stick with those firms whose products they know are effective, especially when people’s lives are at stake. And the corporate advantages from many patents that protect its inventions.
Abbott has multiple growth opportunities, especially in diabetes care, spearheaded by its continuous glucose monitoring (CGM) franchise, the FreeStyle Libre.
Due to all this, it’s unlikely to chop its payouts and interrupt its streak of 52 consecutive annual dividend increases. The forward yield of 1.88% is not too impressive but continues to be above the S&P 500’s average. The corporate’s business is what matters most, and in that department, investors have little to fret about. Abbott Laboratories stays a top dividend growth stock to carry on to for good.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Abbott Laboratories. The Motley Idiot has a disclosure policy.