There are companies that pay dividends and then there are other companies that are dividend aristocrats. As the name indicates, these companies are literally the rulers of the dividend world. Any company that has increased its dividends for 25 years in a row can be termed a dividend aristocrat. There are a few companies that fall in this category. Out of these, there are only around 20 companies in the world that are well on their way into their Golden Jubilee dividend increase year, or their 50th continuous year of incremental dividend pay-out. Let us look at some of these companies here
Hormel Foods
Hormel Foods Corporation (HRL, Financial) is associated with premium quality foods and they have been in the business for quite a long time. Come November 2015 and Hormel Foods will enter the 50th continuous year of its dividend increase, an impressive hallmark indeed. For the latest quarter, Hormel had posted a sales figure of $2.5 billion, which saw a jump of 9% from the quarterly values of last year. What has made Hormel tick even today after so many years of being in the business? It is the ability to diversify into different product ranges and yet not compromise on the quality. Some of the major contributors for increased sales of 2014 were increase in sales of frozen foods, 7% increase in volume in operations of Jennie-O Turkey and close to 15% increase in the sales of speciality foods.
Recently Hormel announced increase in its annual dividends by $1 per share – its 49th consecutive year of dividends increase. With these dividends, the pay-out ratio of Hormel would be close to 36% for 2015, a whopping increase of 24% from the ratio of last year. Going by the current pace of Hormel’s performance and its smart business strategies, stock markets are expecting the company to successfully march into its 50th year of dividend increase during November 2015 as strongly as ever. This is the dividend history of Hormel from 1996 onwards.
Stanley Black & Decker
Stanley Black & Decker (SWK, Financial) is a Fortune 500 company that is involved in making industrial tools, providing hardware solutions and manufacturing security systems for individuals and corporates. In 2017, the company will proudly enter into its 50th continuous year of dividend increase. The product sales figures have increased considerably due to which there was 5% increase in sales during Q3 2014 when compared to the values of Q3 2013. For 2014, the dividends saw an increase of $0.52 per quarter. The dividend yield is 2.2% currently and as per estimates by Wall Street research analysts, the pay-out ratio for Stanley Black & Decker would be close to 34% for 2015. This is the dividend history of the company for the last few years.
Target
One of the first names that come to your mind when you talk about retail giants in the U.S. is Target (TGT, Financial). It sells everything from groceries to electronics, retail items and the like. It is a huge store with branches in many parts of the U.S. This has been one of the main reasons for its continued success in the stock market. It is not without reason that Target is considered as one of the highly respected dividend aristocrats today. Its smart pricing strategies and free delivery concept have helped increase the number of customers to a great extent. When it increased its dividend during June 2014, thus creating the current dividend yield of 2.7%, it became one of the few companies in the world to increase its dividends for the 43rd year in a row.
The rate of growth is so impressive that Target looks well set to increase its dividends for the 50th year in a row during 2021. The quarterly dividend history declared by Target for the last few years is shown below:
Conclusion
These dividend aristocrats are perfect examples for young and budding companies to learn from and emulate their time-tested strategies. These companies belong to diverse industries and have stood the test of competition in their respective sectors and emerged successful. Long-term gain for shareholders was always their priority, and they worked with utmost focus towards this objective. Diversification of products too, helped them to a great extent to sustain for a long time.
