In this dividend champions list, we will take a look at some of the best dividend stocks with at least 25 consecutive years of dividend growth and yields above 4%.
Dividend champions are companies that have raised their dividends for at least 25 years. While they share this trait with dividend aristocrats, the key difference is that dividend champions don’t need to be part of the S&P Index, whereas aristocrats do. Despite this distinction, what truly sets these stocks apart is their long-standing history of consistently increasing dividend payments to shareholders over time.
Dividend growth is one of the most appealing qualities a company can have in today’s market. Achieving 25 consecutive years of dividend increases is especially impressive, as these companies were able to boost their payouts even through challenging periods like the recent pandemic.
Although dividend stocks have lagged behind the market due to the growing prominence of tech stocks, the value of steady income remains irreplaceable. Dividend stocks are unlikely to fall out of favor. Analysts continue to express confidence in their potential. Earlier this year, BofA predicted that dividend stocks are set for growth, noting they should perform well even if consumer spending slows or a full recovery doesn’t materialize. Subramanian from BofA added that if the Federal Reserve cuts rates or halts hikes, companies can maintain their dividends by borrowing at lower interest rates. The analyst also highlighted that income investors have plenty of options for investing in dividend-paying stocks, such as broad mutual funds or exchange-traded funds (ETFs). This provides a variety of avenues to tap into dividend income.
US companies have focused on paying dividends to shareholders due to their growing cash reserves. At the end of the fourth quarter of 2023, businesses held $3.61 trillion in cash and equivalents on their balance sheets. This marked a 2% decline from the end of 2021 but an 11% increase compared to 2022, according to S&P Global Market Intelligence. The substantial cash reserves held by US companies had a significant impact on their dividend payments. A report by Janus Henderson highlighted that US businesses paid shareholders $161.5 billion in dividends during the second quarter of 2024, marking an 8.6% increase on an underlying basis. Companies paying dividends for the first time this year made the largest contribution to this growth, raising the US underlying total by 3.6 percentage points. While these companies’ dividends are relatively small compared to their profits, they still contributed a notable $3.8 billion. Excluding this effect, the remaining companies in the index saw a 5.0% growth, which aligns more closely with the nation’s long-term trend. This surge from new dividend payers is expected to continue throughout the year, keeping US payout growth ahead of the global average. The report further mentioned that 96% of the companies either maintained or increased their dividends during the quarter.
When investing in dividend stocks, many investors tend to prioritize dividend yields. However, experts recommend focusing more on stocks with consistent dividend growth rather than simply chasing high yields, which may not always be sustainable. That said, dividend yields aren’t necessarily a bad option. A balanced approach that combines healthy yields with steady dividend growth can provide strong investment opportunities for investors. In this dividend champions list, we will take a look at the highest-yielding stocks with at least 25 consecutive years of dividend growth.
Our Methodology:
For this list, we looked at a group of over 150 dividend champions, which are known for raising dividends for 25 years or more. From this list, we chose companies with the highest dividend yields as of September 24 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. United Bankshares, Inc. (NASDAQ:UBSI)
Dividend Yield as of September 24: 4.01%
United Bankshares, Inc. (NASDAQ:UBSI) is an American bank holding company that offers a wide range of related services to its consumers. Though the stock is down by 2.2% since the start of 2024, it surged by nearly 3% between July 25 and July 26 when the company impressed investors with its quarterly earnings. In the second quarter of 2024, it saw gains in profitability, capital, loans, and deposits, accompanied by reductions in expenses and non-performing assets. Looking ahead, the company expects continued success in the latter half of the year, and there is enthusiasm surrounding the recent announcement of the acquisition of Piedmont Bancorp, Inc. in Atlanta.
United Bankshares, Inc. (NASDAQ:UBSI) generated revenue of $256 million in Q2 2024, which fell by 3% from the same period last year. However, the revenue beat analysts’ estimates by $202,000. The company’s balance sheet was also strong as it ended the quarter with over $1.1 billion available in cash and cash equivalents. Its consistent dividend history also stems from its cash generation. The company’s trailing twelve-month operating cash flow comes in at $438 million.
United Bankshares, Inc. (NASDAQ:UBSI) offers a quarterly dividend of $0.37 per share. The company has been growing its dividends consistently for the past 50 years. Its payout ratio of 52% reflects its confidence in maintaining future dividend payments. With a dividend yield of 4.01% as of September 24, UBSI is one of the best stocks on our dividend champions list.
As of the close of Q2 2024, 13 hedge funds tracked by Insider Monkey reported owning stakes in United Bankshares, Inc. (NASDAQ:UBSI), up from 12 in the previous quarter. These stakes have a consolidated value of nearly $85 million.
14. Eversource Energy (NYSE:ES)
Dividend Yield as of September 24: 4.30%
Eversource Energy (NYSE:ES) is a Boston-based electric services company that provides essential energy services to its consumers. The company launched the nation’s first networked geothermal pilot project and the initial phase of the Cape Cod Solution transmission project, aimed at improving reliability and facilitating the integration of more renewable energy. It is progressing with its Electric Sector Modernization Plan in Massachusetts and collaborating with Connecticut and New Hampshire to promote a low-carbon future.
In the second quarter of 2024, Eversource Energy (NYSE:ES) has completed the sale of the Sunrise Wind Project to Ørsted and anticipates finalizing the sale of the Revolution and South Fork Wind Projects to Global Infrastructure Partners later this quarter. These transactions align with their commitment to exit the offshore wind business and concentrate resources on regulated growth opportunities to meet customer demand. The company reported revenue of $2.5 billion in Q2, down slightly by 3.6% on a YoY basis.
On September 12, Eversource Energy (NYSE:ES) declared a quarterly dividend of $0.715 per share, which was in line with its previous dividend. In February this year, the company achieved its 26th consecutive year of dividend growth, which makes ES one of the best stocks on our dividend champions list. In addition to strong dividend growth, the stock also has an impressive dividend yield of 4.30%, as of September 24.
At the end of Q2 2024, 26 hedge funds in Insider Monkey’s database owned stakes in Eversource Energy (NYSE:ES), compared with 32 in the previous quarter. These stakes are worth over $622 million. With over 5.3 million shares, Zimmer Partners was the company’s leading stakeholder in Q2.
13. Norwood Financial Corp. (NASDAQ:NWFL)
Dividend Yield as of September 24: 4.32%
Norwood Financial Corp. (NASDAQ:NWFL) is a Pennsylvania-based bank holding company that provides various banking products and services. In the second quarter of 2024, the company’s core operating expenses were effectively managed, staying at 2% of average assets for the quarter. Its capital base continues to exceed “Well-Capitalized” targets, and credit quality metrics remained robust in the second quarter, which is expected to support future performance. The company is actively serving customers at Wayne Bank, as well as at the Bank of the Finger Lakes and Bank of Cooperstown locations.
Norwood Financial Corp. (NASDAQ:NWFL) has a strong balance sheet. At the end of the quarter, it had $2.3 billion in total assets and had total deposits of $1.8 billion. The company ended the quarter with nearly $70 million available in cash and cash equivalents, up from $33 million in the prior year period.
Norwood Financial Corp. (NASDAQ:NWFL), one of the best dividend stocks, currently offers a quarterly dividend of $0.30 per share. The stock made it to our dividend champions list as the company has been rewarding shareholders with growing dividends for the past 32 consecutive years. The stock has a dividend yield of 4.32%, as of September 24.
According to Insider Monkey’s database of Q2 2024, 2 hedge funds owned stakes in Norwood Financial Corp. (NASDAQ:NWFL), compared with 3 in the previous quarter. These stakes are worth over $1.4 million in total. Among these two, Renaissance Technologies was the company’s leading stakeholder in Q2.