10 Best Dividend Kings to Buy for Safe Dividend Growth

3. Parker-Hannifin Corporation (NYSE:PH)

5-Year Average Annual Dividend Growth Rate: 13.95%

Parker-Hannifin Corporation (NYSE:PH) ranks third on our list of the best dividend kings for safe dividend growth. The company provides products and services related to motion control technologies. Last month, Mizuho upgraded the stock to Buy and also raised its price target to $650 per share. The analyst noted that the company has $35 billion available for deployment over the next five years, along with an active pipeline for mergers and acquisitions. These factors provide multiple opportunities for positive earnings revisions in the short term. He further highlighted that the company has consistently set and surpassed profit margin targets four times in the past decade, indicating potential for further upside performance.

In fiscal Q3 2024, Parker-Hannifin Corporation (NYSE:PH) reported growth in nearly all fronts, which led to a record cash generation year-to-date. Its operating cash flow during this period came in at $2.1 billion, which showed a 10% growth from the same period last year. The operating cash flow represented 14.6% of its sales. The company also increases its outlook for FY24 because of its double-digit growth in the aerospace segment. Diamond Hill Capital highlighted the company’s strong performance in the recent quarter in its Q1 2024 investor letter:

“Other top Q1 contributors included Parker-Hannifin Corporation (NYSE:PH). Diversified industrial and aerospace manufacturer Parker-Hannifin’s industrial business orders typically turn positive after five or six quarters of order declines. Accordingly, shares rose in Q1 in anticipation of a new cycle, implying a strong recovery for the company in the forthcoming calendar year.”

Parker-Hannifin Corporation (NYSE:PH) has raised its dividends for the past 68 consecutive years, placing it among the top five longest-running records of dividend increases within the S&P 500 index. The company offers a quarterly dividend of $1.63 per share and has a dividend yield of 1.29%, as of June 19. In the past five years, it has increased its dividends by nearly 14%. The stock is up by over 10% since the start of 2024 and its 12-month return came in at over 36%.

At the end of March 2024, 63 hedge funds tracked by Insider Monkey held stakes in Parker-Hannifin Corporation (NYSE:PH), which remained unchanged from the previous quarter. These stakes are worth over $2.2 billion in total.