A growth stalwart can be defined as a growth company with a stellar reputation and track record.
Hence, investors can count on such stocks to deliver reliable and steady growth over the years.
Armed with well-known brands and a leading market position, stalwarts deserve a place in any investor’s portfolio because they inspire confidence and stability.
A bonus is that most of these stocks also pay out increasing dividends over the years, cementing their position as great sources of passive income.
We profile five such stocks from the US that have strong positions in their respective fields and have increased their dividends over the years.
Kimberly-Clark (NYSE: KMB)
Kimberly-Clark is a consumer goods giant with a portfolio of well-known brands such as Huggies (diapers), Kleenex (tissue paper), and Cottonelle (kitchen napkins).
Its products are sold in more than 175 countries and holds the top or number two position in 70 countries.
For the first half of 2024 (1H 2024), Kimberly-Clark saw net sales dip by 1% year on year to US$10.2 billion.
Gross profit, however, climbed 8% year on year to US$3.7 billion.
After adjusting for one-off items, net profit would have risen by 1% year on year to US$1.3 billion.
The consumer goods behemoth also generated a positive free cash flow of US$1.1 billion for 1H 2024, up 9.5% year on year.
Management raised its earnings outlook for 2024 and expects mid-single-digit organic sales growth with mid-to-high-teens earnings per share growth.
A quarterly dividend of US$1.22 was declared, representing the 90th consecutive year that the company has paid an annual dividend.
It is also the 52nd consecutive year that Kimberly-Clark has increased its dividend.
Medtronic (NYSE: MDT)
Medtronic is a healthcare technology company with a robust product pipeline that has served more than 74 million patients around the world.
For its fiscal 2024 (FY2024) ending 26 April 2024, Medtronic reported a 3.6% year-on-year increase in revenue to US$32.4 billion.
Net profit, however, dipped slightly by 2.2% year on year to US$3.7 billion.
The healthcare company continued to generate solid free cash flows, with FY2024’s free cash flow coming in at US$5.2 billion.
The business generated positive free cash flow over the past three fiscal years, thus allowing Medtronic to increase its quarterly dividend to US$0.70 for its 47th consecutive year of increase.
Including this increase, Medtronic’s dividend would have grown by 30% over the past five years and an impressive 130% over the last decade.
WW Grainger (NYSE: GWW)
Grainger is a broad-line distributor with operations in the US, Japan, and the UK.
The company offers a product assortment of around two million maintenance, repair, and overhaul (MRO) products and services, and serves more than 4.5 million customers worldwide.
For the first quarter of 2024 (1Q 2024), sales increased by 3.5% year on year to US$4.2 billion.
Net profit, however, slid by 2% year on year to US$478 million as the company ramped up marketing expenses.
Free cash flow soared 52.2% year on year to US$542 million for the quarter.
Grainger is confident of better results for the remainder of 2024 and believes it can grow its top line by between 4.3% to 7.3% year on year.
Earnings per share should see a 3.6% to 10.5% year-on-year increase.
In line with this optimism, management has declared a 10% year-on-year increase in the quarterly dividend to US$2.05 from US$1.86.
Sysco (NYSE: SYY)
Sysco is a global food service company that sells, markets, and distributes food and non-food products to restaurants, healthcare, and education facilities.
Its international network supports customers in 90 different countries.
For the first nine months of fiscal 2024 (9M FY2024) ending 31 March 2024, Sysco’s revenue inched up 3% year on year to US$58.3 billion.
Operating profit rose 7.3% year on year to US$2.2 billion while net profit surged by nearly 30% year on year to US$1.3 billion.
Sysco generated a positive free cash flow of US$843 million for 9M FY2024, though this was 11.4% lower than the US$951.3 million churned out a year ago.
The food service leader upped its quarterly dividend by US$0.01 from US$0.50 to US$0.51.
Management provided a comprehensive financial outlook for the next three years.
The company expects sales growth of 4% to 6% per year through both organic and inorganic initiatives and is confident of delivering a 9% to 11% per year total return through a growing dividend.
Johnson & Johnson (NYSE: JNJ)
Johnson & Johnson, or J&J, is a medical technology, pharmaceutical, and medicinal products company.
For 1H 2024, J&J’s sales increased by 3.3% year on year to US$43.8 billion.
Gross profit improved by 4.1% year on year to US$30.5 billion.
The pharmaceutical company saw net profit for continuing operations surge by 62.6% year on year to US$7.9 billion.
Management upped the quarterly dividend to US$1.24, 4.2% higher than the US$1.19 paid out in the previous quarter.
During the quarter, J&J completed the acquisition of Shockwave, a company that offers the first and only commercially available intravascular lithotripsy platform for coronary artery disease and peripheral artery disease.
J&J sees sales improving by between 6.1% to 6.6% year on year for 2024 with earnings per share showing a slight uptick of between 0.8% to 1.8% year on year.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
