Long term investors generally like stocks that not only pay dividends but routinely increase their dividends for years and years. A dividend king is a stock that has been steadily paying dividends and increasing those dividends for fifty years or more. A dividend king does not need to be a large cap company listed that is included in the S&P 500. It simply needs to have a business plan that generates profits year after year after year and a policy of rewarding shareholders by routinely increasing dividends as those profits go up for decades and decades.

Dividend Kings vs Dividend Aristocrats

The major difference between dividend kings and dividend aristocrats is that the aristocrats must be stocks included in the S&P 500 which makes such a stock one of the largest companies in America. To make the dividend aristocrat definition the company needs to routinely pay dividends and steadily increase them but only needs to have done so for twenty-five years or more. These are typically companies that have gone through their growth phase and are now attractive because of their stability and steady dividend.

Dividend Aristocrats vs Kings vs Champions

There is one more definition to add to the list of descriptions of dividend stocks. That is the dividend champion. Dividend champions are the same as dividend aristocrats but do not need to be listed in the S&P 500. They have paid steady dividends for twenty-five years or more and have steadily increased those dividends over the years. The difference between a champion and a king in the dividend realm is that kings need to have paid increasing dividends for fifty years or more and champions only need to have passed the twenty-five year mark.

Dividend King Companies

Many dividend king companies are not as well known as the large cap stocks that lead the financial news. However, they are stable, profitable, and have been paying increasing dividends for more than half a century. As of 2022 there are 38 dividend king companies including Procter & Gamble, 3M, Johnson & Johnson, Tootsie Roll, Colgate-Palmolive, Coca-Cola, Hormel Foods, Altria, Cincinnati Financial, Commerce Bank, ABM Industries, American Water, Black Hills, Lancaster Colony, Nordson, Tennant, Target, H.B. Fuller, CA Water Service, Illinois Tool Works, Leggett & Platt, Lowe’s, PPG, SJW Group, Stanley B & D, Stepan, Sysco, Emerson Electric, Farmers & Merchants Bancorp, Dover, Federal Realty, Genuine Parts, Parker-Hannifin, Universal Corporation, National Fuel, NW Natural, MSA Safety, and W W Grainger.

Top 5 Dividend Kings

If you simply want to focus on the best of the lot, the top 5 dividend kings are not always the biggest companies but the ones with the best yield and best record of steady dividend increases. Leading the list are Genuine Parts Company, Emerson Electric, Federal Realty Investment Trust, Tennant Company, and 3M. The common threads with these companies are solid management year after year and business plans that generate reliable profits for decades at a time.

Dividend Kings List by Yield

In mid-2022 the top dividend kings by yield are Altria Group at 8.19%, 3M at 4.18%, Federal Realty Investment Trust at 4.05%, Northwest Natural at 3.64%, and Stanley Black and Decker at 3.23%. The reason that our lists of dividend kings by yield and top dividend kings are not identical is that yield goes up when a stock price falls but the company keeps paying the same dividend. Sometimes a high dividend yield is a warning sign for a company whose business is starting to slide and that is using its dividend to keep the stock price from falling more.

Undervalued Dividend Kings

One of the so-called undervalued dividend kings at the start of 2022 was Cincinnati Financial Corporation. This stock traded in the $110 range throughout the first seven months of 2022 as the market took a beating. It has fallen in just the last week of July and trades at $95 as of August 1, 2022. The company has increased dividends steadily for 61 years and just increased their dividend again this year by 9%. This is a classic case of a stable company whose stock price is lower due to fears of recession and which will constitute a bargain for long term investors.

Dividend Kings That Pay Monthly

Retirees looking for investments that pay monthly dividends can invest in one dividend aristocrat, Realty Income, but there are no companies that have been paying increasing dividends for fifty years, which is the definition of a dividend king, that pay monthly dividends. Those who want to invest in dividend kings will need to comfort themselves with the realization that these stocks pay reliable and increasing dividends that will always be paid on a quarterly basis.

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