Three Enviably Secure Dividend Shares That Have Been Disbursing Dividends for Over a Century
Three Enviably Secure Dividend Shares That Have Been Disbursing Dividends for Over a Century
The future isn't always a replica of the past, but if a company has been consistently providing dividends for a significant time span, it can instill confidence in investors about its potential to carry on this practice. This demonstrates the company's resilience against numerous challenges and its ability to innovate and introduce new products to cater to evolving demand. Features like these are crucial considerations for long-term investors.
Three such companies that have survived for a hundred years and have been offering dividends for that extended period are Coca-Cola (KO -0.36%), Eli Lilly (LLY -1.08%), and Abbott Laboratories (ABT 0.68%). Here's why they are some of the most secure investments you can include in your portfolio now.
1. Coca-Cola
Coca-Cola boasts a globally recognized brand, popular everywhere. One of the main reasons for its enduring popularity is its powerful brand reputation, which has propelled it into being a top holding for investors like Warren Buffett. Its products are commonly found in millions of households across various countries. While the company is famous for its Coca-Cola beverages, it has expanded its portfolio over the years to include more than 200 brands, stretching beyond carbonated drinks into coffee, tea, and water.
The company has created sugar-free products to cater to shifting consumer preferences and has also grown through acquisitions. Although Coca-Cola may no longer be the growth powerhouse it once was, it remains a reliable business to invest in. It has reported a gross profit of $10.4 billion in the last four quarters on sales of $46.4 billion, ensuring a profit margin of 22%.
Coca-Cola has been paying dividends since 1893. Today, it is part of an elite group known as the Dividend Kings, which have increased their dividend payouts for over 50 consecutive years. Its dividend yield is 3%, making it a strong choice for investors seeking a steady and regular dividend income source.
2. Eli Lilly
Eli Lilly is cited as an attractive growth stock by investors, who are optimistic about its potential in the weight loss market. The company has a very promising drug in the works, titled tirzepatide, which has been approved by regulatory bodies for treating diabetes (Mounjaro) and aiding weight loss (Zepbound). There's a strong possibility that tirzepatide will become the best-selling drug of all time, with some analysts forecasting annual revenues of over $50 billion for the drug.
For perspective, consider that Eli Lilly generated $34 billion in revenues from all its products in the previous financial year. With such a promising future for Eli Lilly, it is not surprising that the company's healthcare stock has risen by more than 200% in the last three years alone.
However, Eli Lilly's appeal to investors isn't only about its growth prospects. It is also an excellent income stock, having consistently paid dividends to its shareholders since 1885. Although its dividend yield might seem low at 0.6%, it has experienced substantial increases in recent years, with the company having doubled its dividend payout since 2019. At a price point of approximately $250 in November 2021, the dividend yield would have been 2.1%, surpassing the average S&P 500 dividend yield of 1.2%. Nevertheless, investors would likely prefer its remarkable gains in the past few years.
Given Eli Lilly's outstanding growth potential and its growing dividend, this is another excellent income stock that you can hold for an extended period.
3. Abbott Laboratories
Abbott Laboratories completes our list of top income stocks. What sets Abbott apart is its comprehensive offering to investors. Abbott is involved in testing, pharmaceuticals, and medical devices, all in a single package. Its leading product, Ensure, contributes significantly to its nutritional revenue stream.
This diversity gives Abbott numerous opportunities to expand, diversify, and adapt according to market changes. During the period of heightened COVID concern, its testing segment demonstrated impressive growth. However, when its nutritional segment faced a setback due to a product recall, the company managed to weather the storm. In the last nine months, it has reported growth in all of its segments, except for diagnostics, which suffered against stronger comparative numbers due to COVID testing sales.
Abbott is experiencing exceptional growth in its medical device segment. Demand for its continuous glucose monitors, which aid in diabetes management, has been especially robust. For the nine-month period ending September 2021, these products generated $1.6 billion in revenue, increasing by over 19% compared to the previous year. Like Coca-Cola, Abbott has been providing dividends since 1924, making it a member of the prestigious Dividend Kings group. Abbott's diverse portfolio and a moderate payout ratio of 66% make it highly likely that more dividend increases will be in store for investors who invest in and hold the stock.
- Investors interested in financial planning might consider diversifying their portfolio by investing in companies with a strong track record of dividend payouts, such as Coca-Cola. With a dividend yield of 3% and over 50 years of consecutive dividend increases, Coca-Cola is a reliable source of passive income for financially-minded individuals.
- Eli Lilly's commitment to both growth and income makes it an appealing option for those who wish to invest in the healthcare sector. Its robust pipeline, including the potential blockbuster drug tirzepatide, coupled with its consistent dividend payments since 1885, demonstrate its financial stability and potentially lucrative returns for investors in the long term.