Nothing much beats the feeling of receiving a dividend that goes straight into your bank account.
There is, however, a much better proposition an income investor can look for – and that’s a steadily rising dividend that makes you richer as the years pass.
Yes, I am talking about companies that have consistently increased their dividends through good times and bad.
Those that do so for 50 years or more are termed “dividend kings”, and rightly so, as not many businesses can lay claim to such a stellar track record.
Here are five US stocks that possess such an enviable track record that income investors should love to include in their portfolios.
Dover Corp (NYSE: DOV)
Dover is a diversified global manufacturer providing equipment, components, consumable supplies, aftermarket parts, software, and solutions through five operating segments.
The company reported a respectable set of earnings for 2024 and also demonstrated strong free cash flow generation.
Revenue inched up 0.8% year on year to US$7.7 billion but operating profit dipped by 1.1% year on year to US$1.2 billion.
Excluding an exceptional gain of US$597.8 million in 2024, net profit from continuing operations would have declined by 24.1% year on year to US$802.2 million.
The key reason was because of a much higher tax expense for 2024 compared with 2023.
Dover generated a positive free cash flow of US$920.3 million.
Back in August 2024, Dover raised its quarterly dividend from US$0.51 to US$0.515, marking the 69th consecutive year that the business has increased its dividends.
Dover intends to invest organically to grow through innovation and R&D while increasing productivity and automation.
The company also sees ample opportunities for acquisitions in core markets. These need to have a strategic fit with Dover and fulfil certain financial metrics.
Parker-Hannifin Corp (NYSE: PF)
Parker-Hannifin is a global leader in motion and control technologies.
The company also has an enviable track record of dividend increases.
Its latest quarterly dividend of US$1.63 was a 10% year-on-year increase from the previous US$1.48 and is the 68th consecutive year that dividends have been raised.
For the first half of fiscal 2025 (1H FY2025) ending 31 December 2024, Parker-Hannifin saw revenue dip slightly by 0.2% year on year to US$9.6 billion.
Net profit climbed 23.6% year on year to US$1.6 billion.
The technology firm generated a positive free cash flow of US$1.46 billion, 27.4% higher than the US$1.15 billion churned out a year ago.
The company announced five-year targets during its Investor Day 2024 for 4% to 6% organic sales growth compound annual growth rate (CAGR).
Segment operating margin is projected at 27%, two percentage points higher than the previous target.
The free cash flow margin is targeted at 17%, an increase from the 16% in the previous target.
Procter & Gamble (NYSE: PG)
Procter & Gamble, or P&G, is a consumer goods giant that sells popular brands such as Gillette, Crest, Head & Shoulders, Pampers, Pantene, and Vicks.
For 1H FY2025, P&G saw sales stay flat year on year at US$43.6 billion.
Operating profit net of an impairment charge also stayed constant at US$11.5 billion but net profit declined by around 8% year on year to US$8.6 billion.
The consumer goods company continued to churn out a healthy free cash flow of US$7.2 billion for 1H FY2025.
P&G declared a quarterly dividend of US$1.0065 per share, an increase of 7% over the prior year’s dividend.
This increase was the 68th consecutive year that the company has increased its dividend.
P&G has maintained its sales growth target for fiscal 2025 to be in the range of two to four percent versus the prior year.
It anticipates that earnings per share for FY2025 can grow by between 10% to 12%.
Coca-Cola (NYSE: KO)
Coca-Cola is a beverage company that sells its products in more than 200 countries.
The company’s portfolio of brands includes Coca-Cola, Sprite, and Fanta and it also sells water, coffee, and tea brands under brands such as Dasani, Powerade, and Fuze Tea.
For 2024, Coca-Cola saw operating revenue rise 3% year on year to US$47.1 billion.
Gross profit improved by 6% year on year to US$28.7 billion but operating profit fell 12% year on year because of higher operating charges.
Net profit slipped 1% year on year to US$10.6 billion for 2024.
The beverage giant churned out a positive free cash flow of US$4.7 billion, though this was around half of the US$9.7 billion generated in 2023.
Despite this, Coca-Cola raised its quarterly dividend by approximately 5.2% year on year from US$0.485 to US$0.51.
This increase makes it the 63rd consecutive dividend increase for the company.
For 2025, Coca-Cola expects to deliver organic growth of between 5% to 6%.
Johnson & Johnson (NYSE: JNJ)
Johnson & Johnson, or J&J, is a pharmaceutical, biotechnology, and medical technologies company.
The company’s major franchises are in neuroscience, immunology, oncology, and pulmonary hypertension, among others.
2024 saw J&J report a 4.3% year-on-year increase in revenue to US$88.8 billion.
Net profit from continuing operations rose 5.6% year on year to US$14.1 billion.
The healthcare giant also churned out a positive free cash flow of US$19.8 billion, up 8.7% year on year.
In light of these good results, management upped its quarterly dividend to US$1.24 from US$1.19, making the 62nd consecutive year of dividend increases.
J&J’s pipeline of products and drugs should stand it in good stead to continue to report increasing profits, with good prospects for its dividend to continue rising.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
