This is part 2 (click here to view part 1) of a series of articles on companies within the dividend achievers index that I consider to be the “best of the best.” This index contains approximately 200 companies that include some of the best dividend-paying opportunities in the U.S.
In order for a company to be included in this index, it must increase its annual dividend for a minimum of ten consecutive years. Companies that have the ability to increase their annual dividend for ten or more years are typically well managed and have sustainable business models, resulting in consistent earnings growth over the long term.
Investing in a diverse group of companies that are components of the dividend achievers index can result in very attractive returns over the long term, particularly when reinvesting the dividends.
Dividend achievers for the long haul
Medtronic, Inc. (NYSE:MDT) is the world’s largest medical technology company, with operations in 120 countries. Its businesses are divided into the Cardiac and Vascular segment and the Restorative Therapies segment.
The Cardiac and Vascular segment consists of a large number of vital products including pacemakers, implantable defibrillators, heart monitors, balloon angioplasty, stents, heart valves, and catheters. This business segment represented 52% of Medtronic’s sales in 2012.
The Restorative Therapies segment consists of spinal systems, neuromodulation products, surgical technologies, orthopedics, and diabetes care products. This business segment represented 48% of Medtronic, Inc. (NYSE:MDT)’s sales in 2012.
38% of Medtronic’s 2012 sales resulted from new products that were introduced during the last three years. This illustrates Medtronic, Inc. (NYSE:MDT)’s effectiveness in developing innovative and successful new products, such as the CoreValve transcatheter aortic heart valve and the RestoreSensor neurostimulator.
The medical technology industry is extremely competitive, and one of Medtronic’s competitors is Stryker Corporation (NYSE:SYK). Stryker is a diverse and growing medical technology company, and is also a component of the dividend achievers index.
Stryker Corporation (NYSE:SYK)’s products are currently divided into the following three business segments: Reconstructive, Medical & Surgical, and Neurotechnology & Spine. Each of these business segments have excellent potential for growth, due to a large number of very successful products, including the MDM X3 Modular Mobile Bearing Hip, which has enormous potential in the total hip replacement market.
It is a known fact that people are living longer, and as the baby boomer population ages, the medical technology market will grow significantly. Also, medical devices are a necessity and are needed regardless of the state of the economy. For these reasons, I believe that the medical technology industry offers many excellent candidates for your watch list, and Medtronic, Inc. (NYSE:MDT) and Stryker Corporation (NYSE:SYK) are two of the best.
AFLAC Incorporated (NYSE:AFL) is a provider of supplemental insurance plans in the U.S. and in Japan. Its wide range of supplemental policy types include accident, cancer, dental, life, medical, short-term disability, and vision.
Aflac is well-known for its marketing campaign involving the Aflac Duck, which has become an international icon. The AFLAC Incorporated (NYSE:AFL) Duck helped transform Aflac into a very successful and well-known international brand. Aflac’s current business strategy is to expand its policy types and to continue growing its distribution network, which currently includes over 60,000 licensed agents in the U.S. and nearly 20,000 sales agencies in Japan.
One of AFLAC Incorporated (NYSE:AFL)’s competitors is UnitedHealth Group Inc. (NYSE:UNH) . UnitedHealth Group is the largest and most diversified provider of healthcare products and services. In addition to a wide variety of insurance products, UnitedHealth Group provides wellness solutions, behavioral solutions, financial services, healthcare technical solutions, and pharmacy benefit management services.
