“Past performance does not guarantee future results,” is a common saying in the stock market. Still, I find past performance quite revealing. It’s a useful factor in assessing whether an investment deserves our attention and resources.
While there’s some truth to that adage, it’s crucial to remember the necessity of nuance. I tend to believe that dividend stocks with a solid operational background and a history of rewarding their shareholders present some of the most promising long-term investment opportunities.
Today, I’m focusing on dividend stocks, especially those that have seen significant growth. The twist? They’re all companies with over a century of operation.
To compile this list, I utilized Barchart’s stock screener to filter for stocks paying dividends that meet the following criteria:
-
Dividend Payment Rate: Ranges from 25% to 60%. This percentage of the company’s revenue being allocated to dividends is manageable enough to not overly hinder its reinvestment plans while also not being too low.
-
Market Cap: Over $100 billion. Larger companies tend to be more resilient and are more likely to weather economic storms.
-
Dividend Growth Rate over 5 Years: More than 50%. A growth rate like this, while high, reflects companies’ efforts to keep their investors satisfied.
-
Number of Analysts and Current Analyst Rating: 12 or more, with a strong buy rating. This helps narrow down to companies favored by Wall Street.
-
Annual Dividend Yield: Left blank.
Applying these filters led me to 11 companies that piqued my interest.
I sorted these results by dividend yield, from highest to lowest, and selected the top three. I then verified that these companies had, in fact, been operating for over 100 years (mergers included).
Let’s dive into the first company:
ConocoPhillips stands out as one of the largest independent exploration and production firms globally. Its operations span multiple regions, focusing on oil, natural gas, and natural gas liquids across the U.S. (including the lower 48), Europe, the Middle East, North Africa, Alaska, Canada, and other international locales.
Founded in 1875, with roots tracing back to the Continental Oil and Transport Company, it has certainly persevered through numerous changes. For dividend investors, there’s more good news — ConocoPhillips has been paying quarterly dividends since 2002. The current annual dividend is $3.12, yielding approximately 3.43%. This strong yield is complemented by a relatively modest payment rate at 39.86%, along with an impressive five-year growth rate of 132.84%. Additionally, it boasts the highest average analyst rating of 4.58.
Next up is Bank of America, a powerhouse in global finance, offering a wide range of services like personal banking, small business loans, asset management, and investment banking. It operates in 35 countries, supporting over 69 million clients domestically and managing $4.2 trillion in assets. The journey of Bank of America started in 1904 when it was established as the Bank of Italy in California.
Currently, it pays $1.04 per share, translating to an annual yield of around 2.19%. Among the three companies listed, Bank of America’s payout rate sits at 28.04%, with a fantastic five-year dividend growth of 51.52%. This combination of a strong growth rate and low payout percentage leaves room for future increases in dividends.
Finally, we have Abbott Laboratories, a major global healthcare company operating in over 160 countries. Abbott often appears on my lists of top dividend stocks; it’s recognized for being one of the most profitable in the U.S. healthcare sector. With a history of 53 consecutive dividend increases, the evidence supports its reputation.
Unlike the others, Abbott has maintained its identity since its founding in 1888, without significant mergers altering its structure.
Abbott currently pays out 59 cents quarterly, which amounts to an annual dividend of approximately $2.36, yielding around 1.89%. The company has a healthy payment rate of 46.38% and has increased its dividend by 71.88% in the past five years.
If you’re digging into the history of these companies, they might just be ideal candidates for your investment strategy. These long-term options could be worthwhile additions to a retirement portfolio.
