5 Dividend Kings To Buy For Safe Dividend Growth

3. S&P Global Inc. (NYSE:SPGI)

5-Year Average Annual Dividend Growth Rate: 16.04%
Dividend Yield as of March 8: 1.05%

An American private banking company, S&P Global Inc. (NYSE:SPGI) ranks third on our list of the dividend kings to buy for safe dividend growth. The company has raised its payouts for 50 years in a row, with a 5-year average annual dividend growth of 16.04%. It currently pays a quarterly dividend of $0.90 per share and has a dividend yield of 1.05%, as recorded on March 8.

Following the company’s strong quarterly earnings and its outperformance last year, both Argus and Credit Suisse raised their price targets on S&P Global Inc. (NYSE:SPGI) in February to $400 and $395, respectively.

As of the close of Q4 2022, 97 hedge funds in Insider Monkey’s database reported having stakes in S&P Global Inc. (NYSE:SPGI), up from 90 in the previous quarter. With over 9 million shares, TCI Fund Management was the company’s largest stakeholder in Q4.

Andvari Associated mentioned S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter. Here is what the firm has to say:

“S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”