In this dividend achievers list, we will discuss dividend stocks with over 10 years of dividend growth.
Dividend investing has become increasingly popular over time, as generating regular income remains a key focus for investors. Companies that consistently raise their dividends are particularly appealing, offering not just earnings but the potential for increasing income. Investors typically look for a minimum of 10 years of dividend growth, which is where “dividend achievers” come in. These are companies that have raised their dividends for at least 10 consecutive years.
Dividends play an important role in the overall returns. Over the past 25 years, nearly half of the total return from U.S. equities has come from reinvested dividends and the power of compounding. The broader market achieved an average annual total return of 7.4% during this period, with 55% coming from price gains and 45% from reinvested dividends, as reported by Bloomberg.
Dividend growth stocks have consistently delivered solid returns over time. The Dividend Aristocrats Index, which tracks companies that have increased their dividends for at least 25 consecutive years, has performed well historically. In a January 2019 blog post titled “Exploring Dividend Growth Strategies for Market Downturns,” Phillip Brzenk, S&P’s global head of multi-asset indexes, examined the performance of dividend growth strategies, particularly during market downturns. It was noted that the dividend aristocrats index outperformed the market in 53% of cases, with an average outperformance of 0.16%. In declining markets, the aristocrats outperformed over 70% of the time, with an average gain of 1.13%. However, in rising markets, they underperformed 56% of the time, though the average underperformance was smaller, at -0.34%. This suggests that the dividend aristocrats provided downside protection during months when the broader market experienced losses.
Dividend growers can also help protect against inflation. As rising prices erode investors’ wealth, companies that consistently increase their dividends offer a way to counteract this. While interest rates may seem appealing today, they might not hold the same value in the future. On the other hand, investing in companies with strong business models, assets, and strategies that support long-term dividend growth is often more attractive than opting for short-term, higher-yield investments. A report by Abrdn PLC also highlighted that, over the past 20 years, companies that began paying dividends or consistently increased them outperformed the global index. These dividend growers and initiators also outshined companies that paid dividends without increasing them, as well as those that didn’t pay dividends at all. In addition, the report noted that dividend-growing companies experienced lower volatility and delivered better risk-adjusted returns during this period.
That said, high-yield dividend stocks aren’t necessarily a poor choice. Analysts suggest seeking yields in the 3% to 6% range. According to Nuveen, stocks that pay dividends and also show steady dividend growth can be a sign of quality, as they demonstrate a company’s ability to balance dividend payouts while reinvesting capital to support future growth. With this, we will discuss the dividend achievers’ list.
Photo by Annie Spratt on Unsplash
Our Methodology:
For this list, we looked at a group of dividend achievers, which are known for raising dividends for 10 years or more. From this list, we chose companies with the highest dividend yields as of September 22 and arranged them in order from lowest to highest yield.
We also measured hedge fund sentiment around each stock according to Insider Monkey’s database of 912 funds as of Q2 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
15. American Electric Power Company, Inc. (NASDAQ:AEP)
Dividend Yield as of September 22: 3.45%
American Electric Power Company, Inc. (NASDAQ:AEP) is an American domestic electric utility company that offers a wide range of energy services to its consumers. The company is experiencing exceptional growth in parts of its service area, thanks to a strong transmission network and emphasis on economic development. Commercial load grew by 12.4% in the second quarter of 2024 compared to the same quarter last year, largely driven by a more than 20% increase at its Transmission & Distribution companies as new data processing facilities became operational. The company also has customer commitments for over 15 gigawatts of additional load by the end of the decade.
In Q2 2024, American Electric Power Company, Inc. (NASDAQ:AEP) reported revenue of $4.6 billion, which showed a 2.7% growth from the same period last year. The company’s ongoing investments in a modern, affordable, and reliable energy system continue to provide value to both customers and communities while also contributing to the company’s earnings. Strong performance in the first half of the year, along with the team’s proven capability to manage operations effectively, enables AEP to reaffirm its 2024 earnings guidance range.
On July 24, American Electric Power Company, Inc. (NASDAQ:AEP) declared a quarterly dividend of $0.88 per share, which was in line with its previous dividend. Overall, the company has raised its payouts for 14 consecutive years, which makes it one of the best stocks for the dividend achievers list. The stock has a dividend yield of 3.45%, as of September 22.
The number of hedge funds tracked by Insider Monkey owning stakes in American Electric Power Company, Inc. (NASDAQ:AEP) grew to 35 in Q2 2024, from 29 in the previous quarter. These stakes have a total value of nearly $1.6 billion. Among these hedge funds, Rajiv Jain’s GQG Partners was the company’s leading stakeholder in Q2.
14. The J. M. Smucker Company (NYSE:SJM)
Dividend Yield as of September 22: 3.64%
The J. M. Smucker Company (NYSE:SJM) is an Ohio-based food company that manufactures food and beverage products. What began as a jelly company in 1897 has evolved into a major force in the consumer foods industry. Today, it is much more diversified than many realize and isn’t limited by its existing product lineup. The management regularly divests from products it no longer supports and acquires brands that it believes can improve profitability.
The J. M. Smucker Company (NYSE:SJM) reported strong earnings in the most recent quarter, fueled by its focus on advancing core business operations, successfully integrating Hostess Brands, and meeting its transformation, cost control, and cash generation targets. In fiscal Q1 2025, the company posted revenue of $2.1 billion, which showed a significant 18% growth from the same period last year. Middle Coast Investing highlighted strengths in the company’s business in its Q2 2024 investor letter. Here is what the firm said:
“The J. M. Smucker Company (NYSE:SJM), like Lululemon, is an S&P 500 component and one of the worst 70 or so stocks in the S&P 500 this year. The maker of Jif, Smuckers jams, Uncrustables, Folgers Coffee, and Dunkin Coffee pods has had a bad 10 months since announcing its purchase of Hostess Brands (Twinkies, Hostess Cupcakes, etc.). Hostess was expensive and exposes J.M. Smucker to the risk that the new weight-loss drugs suppress diehard consumers’ appetite for sweets.
I think J.M. Smucker shares have suffered enough, and are at a point where a buy should work. The company is producing ample free cash flow to cover its likely to grow ~4% dividend while also paying down debt, which will improve both its profitability and its stock value. J.M. Smucker’s products and brands are leaders, including Hostess. I don’t think this will be a huge winner, but I do think there’s relatively safe upside here. I should note that another of my idea sources, Thomas Lott, mentioned SJM on Cash Flow Compounders; I had already been looking at the company for a while, but it’s always good to see a smart investor following it.”
The J. M. Smucker Company (NYSE:SJM) cash position was also strong in the most recent quarter. The company’s operating cash flow came in at $173 million and its free cash flow was $49.2 million. This cash generation has allowed the company to increase its dividends for 23 years in a row. It currently offers a quarterly dividend of $1.08 per share and has a dividend yield of 3.64%, as of September 22.
At the end of Q2 2024, 34 hedge funds tracked by Insider Monkey reported having stakes in The J. M. Smucker Company (NYSE:SJM), compared with 37 in the previous quarter. These stakes are worth over $844.2 million in total.
13. Edison International (NYSE:EIX)
Dividend Yield as of September 22: 3.66%
Edison International (NYSE:EIX) is an American utility holding company that is involved in the generation of electricity through various sources, including natural gas, nuclear, and renewable energy. The stock is up by over 18% since the start of 2024, benefitting a lot from a growing energy demand. During its recent earnings call, the company shared that its subsidiary, Southern California Edison (SCE), anticipates a 35% increase in load growth over the next 10 years, exceeding all prior internal and external forecasts. To accommodate this growth, SCE will need to significantly expand the electric grid to ensure it remains reliable, resilient, and prepared. These major investments will also create opportunities for ongoing rate-based growth.
In the second quarter of 2024, Edison International (NYSE:EIX) reported revenue of $$4.3 billion, which showed a 9.3% growth from the same period last year. The company ended the quarter with $465 million available in cash and cash equivalents, up from $345 million six months ago. Its operating cash flow for the quarter also grew to $1.4 billion, from $712 million in the prior year period. The company reaffirmed its target for core EPS growth of 5%-7% from 2021 to 2025 and maintained the same growth rate projection for 2025 to 2028.
Edison International (NYSE:EIX) is one of the best stocks on our dividend achievers list as the company has been rewarding shareholders with growing dividends for the past 20 years. The company offers a quarterly dividend of $0.78 per share and has a dividend yield of 3.66%, as of September 22.
As of the close of Q2 2024, 32 hedge funds in Insider Monkey’s database reported having stakes in Edison International (NYSE:EIX), growing from 25 in the previous quarter. These stakes have a total value of $1.4 billion. With 13 million shares, Pzena Investment Management was the company’s leading stakeholder in Q2.