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Investors rely on dividend stocks for the income they need, and that makes it critically important to choose companies that have a track record of paying dividends through good times and bad. Out of the thousands of stocks on the market, only a handful of companies have stood the test of time by delivering dividends to shareholders for more than 120 years. Below, we'll look at 10 dividend stocks that pass the test so you can decide whether they belong in your portfolio.
Image source: Johnson Controls.
1. Johnson Controls
Johnson Controls (NYSE: JCI) is well known for its heating, ventilation, and air conditioning systems, as well as its security and energy-management services. The company also has a business division that supplies batteries to the automotive market. Johnson Controls' industrial business is vulnerable to the ups and downs of economic cycles, but it has done a good job of sustaining dividends: It has made consecutive payouts dating back to 1887.
Johnson Controls' stock currently sports a dividend yield of 2.3%. Dividend growth has also been an important part of the company's history. It has increased its dividend in 36 of the past 38 years, having given investors substantial raises in many of the past several years, and it looks poised to keep sharing its success with its shareholders.
Image source: Stanley Black & Decker.
2. Stanley Black & Decker
Stanley Black & Decker (NYSE: SWK) is a giant in the power tools business, with the formerly independent Stanley Works and Black & Decker companies coming together several years ago and joining forces. In addition to its tools, the company also provides security systems, fastening products, welding equipment, and a variety of hand tools. Stanley Black & Decker has a dividend history that dates back to 1877.
Stanley Black & Decker's current dividend yield of 1.7% isn't all that high. But the company boasts a 49-year track record of dividend increases each and every year, including its most recent boost of more than 5%. Going forward, the need for basic tools should keep Stanley Black & Decker moving higher even in challenging economic environments.
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ExxonMobil (NYSE: XOM) needs no introduction. The oil giant is a powerhouse in the global energy industry, and its integrated oil and natural gas business is the benchmark against which smaller oil companies measure themselves. With a history that goes back to Standard Oil, ExxonMobil and its predecessors have paid dividends since 1882.
ExxonMobil has a healthy dividend yield of 3.8%, and it also has a history of annual dividend increase that goes back 35 years. As long as you keep gassing up your car or heating your home, demand for ExxonMobil's products will continue, and that should help power dividend raises for years to come.
Image source: Eli Lilly.
4. Eli Lilly
Eli Lilly (NYSE: LLY) makes medications that millions of people need to get and stay healthy. Lilly has a huge stable of lucrative prescription drugs to drive sales and profits, with products like antidepressant Cymbalta and schizophrenia and bipolar disorder treatment Zyprexa leading the way. The company has passed that success on to its shareholders by paying a dividend since 1885.
Lilly's dividend yield of 2.5% is solid, but the company doesn't have a long streak of annual dividend increases. After more than 40 years of consecutive boosts, Lilly kept its dividend flat in the aftermath of the 2008-2009 financial crisis. For now, Lilly has focused on making the most of its drug opportunities, and investors are sharing the bounty.
Image source: Consolidated Edison.
5. Consolidated Edison
Utilities are traditionally great dividend stocks, and Consolidated Edison (NYSE: ED) has been especially strong. As the primary regulated utility for New York City and the surrounding area, the company serves about 3.4 million electric customers and 1.1 million natural-gas customers in the city and in Westchester County, with additional customers in outlying areas. The utility has paid dividends since 1885.
Consolidated Edison's current dividend yield is 3.5%, which is well above the market's average, and the company also boasts a 43-year streak of consecutive dividend increases. Boring businesses can be beautiful for shareholders, and Consolidated Edison shows that the right combination of fundamental strength and regular income can make for an invaluable addition to your portfolio.
Image source: UGI.
Along the same lines, UGI (NYSE: UGI) is a distributor of electricity, natural gas, and propane. The company doesn't have the brand awareness of Consolidated Edison, but it serves nearly 2 million residential and commercial propane customers throughout the 50 states. Its distribution network and retail sales services help customers directly, while its electricity generation facilities supply power well beyond its home market of Pennsylvania. The company's dividend history started in 1885.
UGI's current dividend yield is 2%, but it has a 30-year track record of boosting its payments every year. Moreover, the company has ample earnings to finance its dividends, which gives it plenty of room for potential increases down the road.
Image source: Procter & Gamble.
7. Procter & Gamble
Procter & Gamble (NYSE: PG) is a household name around the world, with roughly two dozen different brands producing at least $1 billion in sales annually. From Tide detergent to Pampers diapers and Crest toothpaste, you can find Procter & Gamble products in nearly every medicine cabinet and laundry room in the U.S., as well as in many countries across the globe. The company has paid its shareholders dividends since 1891.
Procter & Gamble pays a 3.2% dividend yield, and its streak of regular payout increases is one of the longest in the stock market at 61 years and counting. The Dow Jones component's market exposure is unparalleled, and as developing economies gain purchasing power, they should help boost P&G's growth in the long run.
Image source: Coca-Cola.
Coca-Cola (NYSE: KO) is an American icon whose simple soft drinks have turned into a consumer-products monolith. Even as the company has had to deal with threats to its dominance, including restrictions and taxes on sugary soft drinks, Coca-Cola has managed to weather these worldwide trends and come out with new products to make up lost ground. Coca-Cola's dividend record stretches back to 1893.
Coca-Cola boasts a 3.5% dividend yield and a 55-year track record of annual dividend increases. Some investors fear for the future of its business, but Coca-Cola has changed gears enough times in its history that it should be able to overcome its current challenges and maintain its dominance over the beverage market.
Image source: Colgate-Palmolive.
Like Procter & Gamble, Colgate-Palmolive (NYSE: CL) has ridden the global rise of the consumer class by selling everyday people the everyday products they need. Its many brands of household consumables, like Colgate toothpaste and Palmolive dish detergent, have achieved near-ubiquity -- and raked in huge profits. The company has been generous in sharing those profits with others, having paid dividends since 1895.
Colgate-Palmolive's stock yields just 2.2%, but it has a 54-year dividend streak. If its emerging-market sales continue to accelerate, then Colgate-Palmolive should be in an ideal position to keep making shareholders richer.
Clock tower in York, Pennsylvania. Image source: Getty Images.
10. York Water
Few investors have heard of York Water (NASDAQ: YORW), but the water utility specialist serves its customers in Pennsylvania with high-quality water and wastewater services. York serves a wide variety of different types of residential and commercial customers, helping to spur greater industrial activity. Its history of dividend payments goes back more than 200 years.
Right now, York Water yields just 1.7%. But the company has increased its payout for 20 straight years, and some investors believe future consolidation in the water utility business could help York Water find partners and grow even bigger and more financially healthy. People will always need water, and this utility has what it takes to succeed.
Strong stocks with lucrative dividends are valuable, and the best dividend stocks keep paying dividends through thick and thin. For investors who appreciate a good track record, these stocks are worth a closer look for your dividend portfolio.
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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of ExxonMobil and Johnson Controls. The Motley Fool is short Johnson Controls. The Motley Fool recommends UGI. The Motley Fool has a disclosure policy.