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3 Dividend Kings Suited Perfectly for Income Investors
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Income investing is a widely-deployed strategy within the market. After all, there are few things in life sweeter than getting paid.
Companies that consistently increase their dividend payouts are well-established in nature with successful business operations. In addition, they tend to carry a lower level of risk, undoubtedly a major positive for investors.
The best of the best of these dividend payers are classified into an elite group – Dividend Kings.
Investors are familiar with Dividend Aristocrats, companies that have successfully increased their dividend payout for 25 consecutive years. However, to be ranked as a Dividend King, a company must increase its dividend payout for a whopping 50 consecutive years.
Three companies – Coca-Cola (KO - Free Report) , Emerson Electric (EMR - Free Report) , and AbbVie Inc. (ABBV - Free Report) – are all part of the elite Dividend King group. The chart below shows the year-to-date performance of all three companies.
Image Source: Zacks Investment Research
Let’s look at why these three companies would be excellent bets for any income-focused investor.
AbbVie
AbbVie (ABBV - Free Report) is a global research-based biopharmaceutical company that delivers innovative medicines.
AbbVie’s dividend metrics might be the most robust of them all. The company’s annual dividend yields a sizable 3.8%, nowhere near the S&P 500’s annual yield of 1.5%. In addition, the company has a stellar 16% five-year annualized dividend growth rate paired with six dividend increases over the last five years.
AbbVie has just joined the elite Dividend King group – the company has increased its annual dividend for 50 consecutive years.
Image Source: Zacks Investment Research
Furthermore, free cash flow of the company has been consistently increasing, as illustrated in the chart below.
Image Source: Zacks Investment Research
Undoubtedly a major positive, AbbVie has consistently reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in nine of its previous ten quarterly reports.
Top-line results have also been solid; ABBV has recorded seven top-line beats over its last ten quarters. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Coca-Cola
The Coca-Cola Company (KO - Free Report) is an American multinational beverage corporation primarily known for its flagship Coca-Cola drink.
Coca-Cola’s dividend metrics are enough to make any income investor celebrate. KO’s annual dividend yield resides at 2.9%, much higher than the general market’s. In addition, the company has increased its dividend payout five times over the last five years with a solid five-year annualized dividend growth rate of 3.1%.
The company has impressively increased its dividend payout for 59 consecutive years.
Image Source: Zacks Investment Research
In addition to solid dividend metrics, the company’s free cash flow has also been strong – free cash flow grew 28% from FY20 to FY21.
Image Source: Zacks Investment Research
Impressively, Coca-Cola has chained together ten consecutive bottom-line beats.
Quarterly sales results have also been rock-solid; KO has recorded eight top-line beats over its last ten quarters. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Emerson Electric
Emerson Electric (EMR - Free Report) is a global technology and engineering company providing innovative solutions for customers in industrial, commercial, and residential markets.
Emerson is dedicated to rewarding its shareholders; the company has increased its dividend payout for a mind-boggling 64 consecutive years.
EMR’s annual dividend yields 2.5%, well above the S&P 500’s yield. In addition, the company has a sustainable payout ratio sitting at 44% of earnings paired with a five-year annualized dividend growth rate of a modest 1.5%.
Image Source: Zacks Investment Research
Emerson has been the definition of consistency within its quarterly results, exceeding the Zacks Consensus EPS Estimate in nine consecutive quarters.
Quarterly sales results have been impressive as well; over the company’s previous ten quarterly releases, Emerson has posted seven top-line beats.
Image Source: Zacks Investment Research
Bottom Line
When companies consistently increase their dividend payouts, it’s generally a sign of robust financial health and successful business operations.
Becoming a Dividend Aristocrat is challenging enough, let alone becoming a Dividend King. Meeting the parameters to join the elite group speaks volumes about these companies' well-established and thriving nature.
All three companies above have robust dividend metrics and a history of exceeding earnings estimates, making them excellent choices for investors looking to add a reliable income stream.
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3 Dividend Kings Suited Perfectly for Income Investors
Income investing is a widely-deployed strategy within the market. After all, there are few things in life sweeter than getting paid.
Companies that consistently increase their dividend payouts are well-established in nature with successful business operations. In addition, they tend to carry a lower level of risk, undoubtedly a major positive for investors.
The best of the best of these dividend payers are classified into an elite group – Dividend Kings.
Investors are familiar with Dividend Aristocrats, companies that have successfully increased their dividend payout for 25 consecutive years. However, to be ranked as a Dividend King, a company must increase its dividend payout for a whopping 50 consecutive years.
Three companies – Coca-Cola (KO - Free Report) , Emerson Electric (EMR - Free Report) , and AbbVie Inc. (ABBV - Free Report) – are all part of the elite Dividend King group. The chart below shows the year-to-date performance of all three companies.
Image Source: Zacks Investment Research
Let’s look at why these three companies would be excellent bets for any income-focused investor.
AbbVie
AbbVie (ABBV - Free Report) is a global research-based biopharmaceutical company that delivers innovative medicines.
AbbVie’s dividend metrics might be the most robust of them all. The company’s annual dividend yields a sizable 3.8%, nowhere near the S&P 500’s annual yield of 1.5%. In addition, the company has a stellar 16% five-year annualized dividend growth rate paired with six dividend increases over the last five years.
AbbVie has just joined the elite Dividend King group – the company has increased its annual dividend for 50 consecutive years.
Image Source: Zacks Investment Research
Furthermore, free cash flow of the company has been consistently increasing, as illustrated in the chart below.
Image Source: Zacks Investment Research
Undoubtedly a major positive, AbbVie has consistently reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in nine of its previous ten quarterly reports.
Top-line results have also been solid; ABBV has recorded seven top-line beats over its last ten quarters. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Coca-Cola
The Coca-Cola Company (KO - Free Report) is an American multinational beverage corporation primarily known for its flagship Coca-Cola drink.
Coca-Cola’s dividend metrics are enough to make any income investor celebrate. KO’s annual dividend yield resides at 2.9%, much higher than the general market’s. In addition, the company has increased its dividend payout five times over the last five years with a solid five-year annualized dividend growth rate of 3.1%.
The company has impressively increased its dividend payout for 59 consecutive years.
Image Source: Zacks Investment Research
In addition to solid dividend metrics, the company’s free cash flow has also been strong – free cash flow grew 28% from FY20 to FY21.
Image Source: Zacks Investment Research
Impressively, Coca-Cola has chained together ten consecutive bottom-line beats.
Quarterly sales results have also been rock-solid; KO has recorded eight top-line beats over its last ten quarters. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Emerson Electric
Emerson Electric (EMR - Free Report) is a global technology and engineering company providing innovative solutions for customers in industrial, commercial, and residential markets.
Emerson is dedicated to rewarding its shareholders; the company has increased its dividend payout for a mind-boggling 64 consecutive years.
EMR’s annual dividend yields 2.5%, well above the S&P 500’s yield. In addition, the company has a sustainable payout ratio sitting at 44% of earnings paired with a five-year annualized dividend growth rate of a modest 1.5%.
Image Source: Zacks Investment Research
Emerson has been the definition of consistency within its quarterly results, exceeding the Zacks Consensus EPS Estimate in nine consecutive quarters.
Quarterly sales results have been impressive as well; over the company’s previous ten quarterly releases, Emerson has posted seven top-line beats.
Image Source: Zacks Investment Research
Bottom Line
When companies consistently increase their dividend payouts, it’s generally a sign of robust financial health and successful business operations.
Becoming a Dividend Aristocrat is challenging enough, let alone becoming a Dividend King. Meeting the parameters to join the elite group speaks volumes about these companies' well-established and thriving nature.
All three companies above have robust dividend metrics and a history of exceeding earnings estimates, making them excellent choices for investors looking to add a reliable income stream.