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In this article, we will discuss 15 best consistent dividend stocks to buy. You can skip our detailed discussion on dividend stocks and their past performance, and go directly to read 5 Best Consistent Dividend Stocks to Buy.
Since the start of this year, the plunging stock prices have investors worried about the future of the market. The stock market has reported negative returns for three consecutive quarters this year for the first time since the global financial crisis of 2009, according to a report by New York Times. The report also mentioned that the S&P 500 ended the quarter with an over 5% decline, which has pushed investors towards defensive stocks. In this regard, dividend stocks like Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX) are gaining ground among investors.
Historically, dividend stocks have delivered strong returns in previous inflationary periods. Moreover, quality dividend companies have also raised their payouts steadily over the past years regardless of economic conditions. In the past 15 years ending August 2022, the average dividend growth rate stood at 13.71%, compared with a 2.21% growth in the Consumer Price Index (CPI) during the same period, according to S&P Global. The report also highlighted that dividends now represent 6.25% of an income source, growing from 2.88% in 1981.
Another report by Sterling Capital mentioned that dividend growers outperformed their peers when inflation ranged between 4% to 13% annually over the past five decades. Analysts recommend dividend stocks due to the compounding effects of dividend income and price appreciation. Over the past 30 years ending December 2021, reinvested dividends for the S&P 500 represented nearly 50% of the total equity market, according to iShares. In view of this, we will discuss consistent dividend stocks in this article.
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Our Methodology:
For this list, we selected dividend stocks that have strong dividend histories. In addition to this, we carefully analyzed these stocks through their balance sheets and overall financial health to determine the sustainability of their dividends. The stocks are ranked according to their dividend yields, as of November 9.
15 Best Consistent Dividend Stocks to Buy
15. Roper Technologies, Inc. (NYSE:ROP)
Dividend Yield as of November 9: 0.60%
Roper Technologies, Inc. (NYSE:ROP) is a Florida-based software company that produces engineered products for global niche markets. In the third quarter of 2022, the company reported revenue of $1.35 billion, which showed a 9.8% growth from the same period last year. Its adjusted operating cash flow for the quarter came in at $376 million, up from $337 million from the prior-year quarter. The company also paid $196 million in dividends to shareholders during the quarter.
Roper Technologies, Inc. (NYSE:ROP) currently pays a quarterly dividend of $0.62 per share with a dividend yield of 0.60%, as of November 9. The company has been raising its dividends consistently for the past 31 years, which makes it one of the best dividend stocks to buy. Moreover, it has raised its payouts at a CAGR of 12.41% in the past five years. The company is favored by investors in the current market environment alongside Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX).
In October, Wells Fargo raised its price target on Roper Technologies, Inc. (NYSE:ROP) to $540 with an Overweight rating on the shares. The firm mentioned that the company's performance continues to stand out against a volatile market and also appreciated its double-digit earnings growth.
The number of hedge funds tracked by Insider Monkey owning stakes in Roper Technologies, Inc. (NYSE:ROP) increased to 48 in Q2 2022, from 38 a quarter earlier. These stakes have a total value of over $1.7 billion. With over 1.6 million shares, Akre Capital Management was the company’s leading stakeholder in Q2.
Weitz Investment Management mentioned Roper Technologies, Inc. (NYSE:ROP) in its Q2 2022 investor letter. Here is what the firm has to say:
“Consistent with that approach, portfolio activity among our long holdings tilted toward purchases. We added to almost half our holdings by varying degrees, and we were pleased to initiate new positions in Roper Technologies (NYSE:ROP) at attractive prices. Originally an industrial equipment manufacturer, Roper has successfully evolved into a provider of software and technology services. (Investors can find an in-depth discussion of our Roper Technologies investment thesis in colleague Barton Hooper’s November 2021 “Analyst Corner” feature.) The business generate significant free cash flow, possess strong competitive positions, and have excellent management teams with demonstrated acquisition records.”
14. The Sherwin-Williams Company (NYSE:SHW)
Dividend Yield as of November 9: 1.07%
The Sherwin-Williams Company (NYSE:SHW) is an Ohio-based manufacturing company that specializes in the production of paint and coating materials. BMO Capital appreciated the company's solid Q3 earnings and strong guidance for the next quarter. Given this, the firm raised its price target on the stock to $251 in October with a Market Perform rating on the shares.
In Q3 2022, The Sherwin-Williams Company (NYSE:SHW) posted revenue of over $6 billion, up 17.5% from the same period last year. In the first nine months of the year, its operating cash flow came in at $1.28 billion and returned $1.21 billion to shareholders in dividends and share repurchases. The company had $130.5 million available in cash and cash equivalents at the end of September.
On October 19, The Sherwin-Williams Company (NYSE:SHW) declared a quarterly dividend of $0.60 per share, in line with its previous dividend. The company has raised its dividends consistently for the past 43 years, coming through as one of the best dividend stocks to buy now. As of November 9, the stock has a dividend yield of 1.07%.
As of the close of Q2 2022, 52 hedge funds tracked by Insider Monkey owned stakes in The Sherwin-Williams Company (NYSE:SHW), compared with 54 in the previous quarter. The collective value of these stakes is over $1.86 billion. Chilton Investment Company was the company’s leading stakeholder in Q2.
ClearBridge Investments mentioned The Sherwin-Williams Company (NYSE:SHW) in its Q3 2022 investor letter. Here is what the firm has to say:
13. McCormick & Company, Incorporated (NYSE:MKC)
Dividend Yield as of November 9: 1.83%
McCormick & Company, Incorporated (NYSE:MKC) is an American multinational food company that specializes in a wide range of food items. In Q3 2022, the company's shareholder return remained strong as it paid nearly $300 million to shareholders in dividends, up from $272.5 million during the same period last year. Its year-to-date operating cash flow came in at $250 million.
McCormick & Company, Incorporated (NYSE:MKC) pays $0.37 per share in quarterly dividends. The company has been growing its dividends consistently for the past 36 years. The stock has a dividend yield of 1.83%, as of November 9.
Appreciating the company's overall fundamentals and earnings growth, Barclays maintained an Equal Weight rating on McCormick & Company, Incorporated (NYSE:MKC) in September with an $82 price target.
At the end of the June quarter of 2022, 33 hedge funds tracked by Insider Monkey owned investments in McCormick & Company, Incorporated (NYSE:MKC), with a total value of over $1.48 billion. Some of the biggest Wall Street names owned stakes in the company in Q2, including Ian Simm, Jim Simons, and Cliff Asness.
12. Caterpillar Inc. (NYSE:CAT)
Dividend Yield as of November 9: 2.11%
Caterpillar Inc. (NYSE:CAT) is an American manufacturer of industrial and construction equipment. On October 12, the company declared a quarterly dividend of $1.20 per share, in line with its previous dividend. It has been raising its dividends consistently for the past 28 years, which makes it one of the best dividend stocks to buy now. The stock's dividend yield on November 9 came in at 2.11%.
In Q3 2022, Caterpillar Inc. (NYSE:CAT) reported revenue of $15 billion, which showed a 21% growth from the same period last year. During the quarter, the company returned nearly $2 billion to shareholders through dividends and share repurchases. In the first nine months of the year, it generated roughly $5 billion in operating cash flow.
In October, Citigroup raised its price target on Caterpillar Inc. (NYSE:CAT) to $235 with a Neutral rating on the shares, appreciating the company's strong pricing and high backlogs.
At the end of the June quarter, 45 hedge funds tracked by Insider Monkey owned stakes in Caterpillar Inc. (NYSE:CAT), compared with 54 in the previous quarter. These stakes are collectively valued at over $3.25 billion.
Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter. Here is what the firm had to say:
“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
11. A. O. Smith Corporation (NYSE:AOS)
Dividend Yield as of November 9: 2.15%
A. O. Smith Corporation (NYSE:AOS) is an American manufacturing company that specializes in the production of water heaters and boilers for both commercial and residential customers. In Q3 2022, the company reported revenue of $874.2 million, which fell in line with Street estimates. In the first nine months of the year, the company's operating cash flow came in at $214.7 million and its free cash flow amounted to $163.8 million.
On October 13, A. O. Smith Corporation (NYSE:AOS) declared a 7% hike in its quarterly dividend to $0.30 per share. Through this increase, the company extended its dividend growth streak to 29 years. Moreover, it has raised its payouts at a CAGR of 15% in the past five years, which makes it one of the best dividend stocks to buy now. As of November 9, the stock has a dividend yield of 2.15%.
In October, DA Davidson maintained a Buy rating on A. O. Smith Corporation (NYSE:AOS) with a $65 price target, highlighting the company's recent quarterly earnings in the current environment.
At the end of Q2 2022, Impax Asset Management owned roughly $215 million shares in A. O. Smith Corporation (NYSE:AOS), becoming the company’s largest stakeholder. In addition to this, 27 hedge funds owned stakes in the company in Q2, down from 38 in the previous quarter. These stakes hold a combined value of over $387 million.
LRT Capital Management mentioned A. O. Smith Corporation (NYSE:AOS) in its Q2 2022 investor letter. Here is what the firm has to say:
“A.O. Smith is the largest US manufacturer of residential and commercial water heaters, boilers and water treatment products. The company generates close to $3 billion in annual sales. The majority of the company’s business (73%) is done in North America, with the balance coming from China and India. Approximately 80% of demand is replacing existing heaters and 20% is tied to new construction. The company continues to benefit from a shift towards higher efficiency, but more expensive, tankless heaters.
A.O. Smith generates returns on invested capital in the high teens. The company uses its earnings to consistently grow its dividends and share repurchases. Over the past three years the company’s performance has been hurt by its exposure to China as its business there suffered due to the US-China trade war and poor execution. We believe the China business is back on track and the all-important US business is doing better than ever as housing demand heats up in the US. The company beat earnings estimates over the past several quarters and is currently enjoying very good performance as the hot U.S housing market continues to be strong.19 A.O. Smith also recently increased its share repurchase authorization.”
10. McDonald's Corporation (NYSE:MCD)
Dividend Yield as of November 9: 2.18%
McDonald's Corporation (NYSE:MCD), an American multinational fast-food chain, announced a 10% hike in its quarterly dividend on October 14 to $1.52 per share. This increase takes the company's total consecutive dividend growth years to 46. In the past five years, the company has raised its dividends at a CAGR of 7.98%, coming through as one of the best dividend stocks on our list. The stock's dividend yield on November 9 came in at 2.18%.
In the third quarter of 2022, McDonald's Corporation (NYSE:MCD) reported revenue of $5.8 billion, which beat estimates by $170 million. The company's global comparable sales grew by 10%, with growth across all sectors. Moreover, it also posted a 2% growth in its systemwide sales in Q3.
Appreciating the company's Q3 earnings beat, RBC Capital lifted its price target on McDonald's Corporation (NYSE:MCD) in October to $295 with an Outperform rating on the shares. The firm also mentioned that the company is well-positioned to benefit from a rational promotional environment.
At the end of Q2 2022, 50 hedge funds tracked by Insider Monkey owned stakes in McDonald’s Corporation (NYSE:MCD), compared with 58 in the previous quarter. The consolidated value of these stakes is over $2.3 billion. Bridgewater Associates owned the largest position in the company in Q2.
9. Illinois Tool Works Inc. (NYSE:ITW)
Dividend Yield as of November 9: 2.45%
Illinois Tool Works Inc. (NYSE:ITW) is another best dividend stock on our list. The manufacturing company was lauded by Credit Suisse in October due to its strong quarter of organic growth and solid margin performance. In view of this, the firm raised its price target on the stock to $243 with an Outperform rating on the shares.
Illinois Tool Works Inc. (NYSE:ITW) is a Dividend King as it has been raising its dividends consistently for over 50 years. It currently pays a quarterly dividend of $1.31 per share for a dividend yield of 2.45%, as of November 9.
In Q3 2022, Illinois Tool Works Inc. (NYSE:ITW) reported strong cash generation which was sufficient to fulfill its shareholder obligation. The company generated $713 million in operating cash flow and its free cash flow for the quarter amounted to $612 million. It repurchased shares worth over $500 million during the quarter.
As of the end of June 2022, 34 hedge funds tracked by Insider Monkey owned investments in Illinois Tool Works Inc. (NYSE:ITW), compared with 36 in the previous quarter. These stakes hold a total value of over $366 million. AQR Capital Management was the company’s leading stakeholder in Q2.
8. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of November 9: 2.59%
Johnson & Johnson (NYSE:JNJ) is a New Jersey-based multinational pharmaceutical industry company that specializes in a wide range of other consumer products as well. Due to its strong free cash flow generation, the company announced the authorization of a buyback program for its common stock worth over $5 billion.
Johnson & Johnson (NYSE:JNJ) is one of the best dividend stocks on our list as the company has been raising its dividends consistently for the past 60 years. It currently pays a quarterly dividend of $1.13 per share and has a dividend yield of 2.59%, as of November 9.
Johnson & Johnson (NYSE:JNJ) has remained committed to its shareholder obligation for a long time. During Q3 2022, the company returned $3 billion to shareholders in dividends. Year-to-date, the company's dividend payments amounted to over $8.7 billion.
In October, Citigroup maintained its Buy rating on Johnson & Johnson (NYSE:JNJ) with a $198 price target, presenting a positive view of the medical device sector.
At the end of the second quarter of 2022, 83 hedge funds tracked by Insider Monkey owned stakes in Johnson & Johnson (NYSE:JNJ), with a total value of over $6.7 billion. In the previous quarter, 83 hedge funds owned stakes in the pharmaceutical company as well, worth over $7.4 billion.
Distillate Capital Partners LLC mentioned Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter. Here is what the firm has to say:
“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”
7. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of November 9: 2.66%
Merck & Co., Inc. (NYSE:MRK) is an American multinational pharmaceutical company that specializes in a wide range of innovative medical treatments for patients with rare and serious symptoms. In November, Guggenheim lifted its price target on the stock to $111 with a Buy rating on the shares, following the company's strong Q3 earnings.
Merck & Co., Inc. (NYSE:MRK) maintains an 11-year streak of consistent dividend growth, which places it as one of the best dividend stocks on our list. The company pays a quarterly dividend of $0.69 per share and has a dividend yield of 2.66%, as of November 9.
Merck & Co., Inc. (NYSE:MRK) was a part of 79 hedge fund portfolios in Q2 2022, according to Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $6.1 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q2.
Chartwell Investment Partners mentioned Merck & Co., Inc. (NYSE:MRK) in its Q2 2022 investor letter. Here is what the firm has to say:
“In the Dividend Equity accounts, the three best performers in Q2 includes Merck (NYSE:MRK, 3.6%), up 12.0%. Merck, like other pharma companies, is in a defensive business, but the stock also did well as peak-sales estimates for their flagship drug, Keytruda, have gone up (JPMorgan estimates $32 billion in sales by 2026).”
6. Exxon Mobil Corporation (NYSE:XOM)
Dividend Yield as of November 9: 3.29%
Exxon Mobil Corporation (NYSE:XOM) is a Texas-based natural gas company that sells its products worldwide. In Q3 2022, the company reported an operating cash flow of $24.4 billion and its free cash flow for the quarter came in at $22 billion. Its cash generation was strong as the company paid $8.2 billion to shareholders, including $3.7 billion in dividends, which makes it one of the best dividend stocks.
Exxon Mobil Corporation (NYSE:XOM) has raised its dividends consistently for the past 40 years at a CAGR of 5.9%. It currently pays a quarterly dividend of $0.91 per share, growing it by 3% this October. As of November 9, the stock has a dividend yield of 3.29%. The company is a solid addition to dividend portfolios alongside Merck & Co., Inc. (NYSE:MRK), AbbVie Inc. (NYSE:ABBV), and Chevron Corporation (NYSE:CVX).
In November, BNP Paribas upgraded Exxon Mobil Corporation (NYSE:XOM) to Neutral with a $115 price target.
At the end of Q2 2022, 72 hedge funds tracked by Insider Monkey owned stakes in Exxon Mobil Corporation (NYSE:XOM), compared with 83 in the previous quarter. The collective value of these stakes is over $7.4 billion. GQG Partners was the company’s leading stakeholder in Q2.
First Eagle Investments mentioned Exxon Mobil Corporation (NYSE:XOM) in its Q2 2022 investor letter. Here is what the firm has to say:
“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
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Disclosure. None. 15 Best Consistent Dividend Stocks to Buy is originally published on Insider Monkey.
