Dividends are a perfect way to build your monthly passive income. They not only supply a consistent rate of pay, but also help build your wealth through asset appreciation. But don’t just think you need a bull market, even in bear markets blue chip stocks still continue to grow their dividends.
Blue chip stocks such as Microsoft, IBM, and American Express offer quarterly dividends. A solid dividend yield to aim for is between 2% and 5%, these are the companies that are focused on maintaining dividend payments.
Now, if you want to invest in dividend companies, look no further than the S&P 500 dividend aristocrats. These companies are among the elite of dividend growers, companies such as 3M, AT&T, and Coca-Cola.
It’s funny when people say “stick to essential companies, like energy or healthcare”… Well I have some out of the box statistics for you, the majority of the companies on this list (and on the current aristocrat list) are not in essential industries. Actually, the sector weighing are as follows:
- Consumer Staple = 23%
- Industrials = 21%
- Materials = 12%
- Healthcare = 10%
- Financials – 10%
- Consumer Discretionary = 10%
- Utilities & Energy = 6%
- Real Estate = 4%
- Tech & Communications = 4%
On this list, we look at 15 companies to give you the best chance of a monthly income, some of these companies will be dividend aristocrats. However, I believe there are some opportunities in newer industries that you can take advantage of.
15 Dividend Stocks to Hold Forever
Please keep in mind, this article will be updated as much as possible, but keep in mind figures can fluctuate.
Dividend Payers: Jan, Apr, Jul & Oct
#1. Coca-Cola Co
- Symbol: KO
- Market Cap: $194.47 Billion
- Dividend Yield: 3.62%
- Quarterly Dividend if 10 Shares Owned: $10.70
Coca-Cola is probably one of the worlds most well known brands. Bursting onto the market with an IPO in 1919, the company has paid a quarterly dividend since 1920, and grown that dividend for the last 54 years.
With the U.S. market for carbonated drinks on the decline over the last decade, Coca-Cola has responded by adding water, fruit juices, and tea to its product range, boosting revenue and cash flow.
Coca-Cola is a heavyweight dividend stock with decades of financial growth, and I don’t see this brand getting smaller in the near future.
#2. Medtronic PLC
- Symbol: MDT
- Market Cap: $124.45 Billion
- Dividend Yield: 2.50%
- Quarterly Dividend if 10 Shares Owned: $5.80
This medical device giant based in the Republic of Ireland has over 98,000 employees worldwide. Being one of the worlds largest producers of medical equipment such as insulin pumps and stents, it has managed to grow its dividend for the last 40 years
Chairman of Medtronic PLC, Omar Ishrak has stated in interviews with Bloomberg that the company focuses on the health of its shareholders as well as the health of its patients. That is why they are also on the list of dividend aristocrats.
The dividend yield for Medtronic might not be as high as others in the industry, but time and time again this company has shown just how resilient it is, especially in times of uncertainty.
#3. Illinois Tool Works Inc.
- Symbol: ITW
- Market Cap: $55.78 Billion
- Dividend Yield: 2.42%
- Quarterly Dividend if 10 Shares Owned: $10.70
Founded in 1912, Illinois Tool Works has manufactured construction products, restaurant equipment, car parts and more. Not only is the company well diversified, it has grown its dividend every year since 1964.
In 2019, the growing dividend was not the only good news. Due to cost cuts, asset sales, and share buybacks, the stock price gained almost 41%, compare that to the 24% gain for the broader market and it screams winner.
With such a stable company behind the share price, it gives investors some security. Low volatility and a continuous dividend is perfect for a long term income investment.
#4. Genuine Parts Company
- Symbol: GPC
- Market Cap: $12.31 Billion
- Dividend Yield: 3.70%
- Quarterly Dividend if 10 Shares Owned: $7.90
This distributor of automotive replacement parts is the corner stone of American industrial manufacture. Founded in 1925, GPC has grown its dividend for the last 63 consecutive years. With many more decades to come.
Not only has GPC been growing its dividend, it has been exploding it. On average Genuine Parts Company has grown its dividend 193.27% per year, while maintaining a modest 55.54% payout ratio. Showing the increased revenue brought in every year.
If this stock continues its dividend growth which Yahoo Finance analysts expect it to do, you could be making money for decades to come.
#5. Sysco Corporation
- Symbol: SYY
- Market Cap: $26.75 Billion
- Dividend Yield: 3.42%
- Quarterly Dividend if 10 Shares Owned: $4.50
This multination company with headquarters in Texas is part of the S&P 500. Founded in 1969, this food distributor is involved in the marketing and distribution of food products, smallwares, kitchen equipment and tabletop items not to mention all the other items.
The acquisitions made in the early 21st century cemented this company place as a stock market superpower. Purchasing the largest food distributor in Asia back in 2003, then the largest distributor in Ireland in 2009.
Because of the steady growth of this company and the stable share price, this is a safe bet for any income investor. One day I wouldn’t be surprised if Sysco Corporation ends up on the dividend aristocrats list.
So if you owned 10 shares of each company, the total dividend payment you would receive each quarter comes to… $39.60. Making the annual dividend payments for these companies… $158.40.
Dividend Payers: Feb, May, Aug & Nov
#6. AT&T Inc.
- Symbol: T
- Market Cap: $213.11 Billion
- Dividend Yield: 6.95%
- Quarterly Dividend if 10 Shares Owned: $5.20
Being on the higher end on the dividend yield spectrum hasn’t stopped AT&T from growing its dividend 2% for the last 36 years. The telecommunication giant has a perfect business plan for consistent growth.
Buy customers purchasing a subscription, and paying monthly for it, AT&T is able to sustain growth for years and years. Also, because it is what is known as an essential service, the company has been able to weather unfriendly market conditions.
The last point to make on AT&T’s behalf is… The company has the highest dividend yield on the entire S&P 500.
#7. AbbVie Inc.
- Symbol: ABBV
- Market Cap: $173.40 Billion
- Dividend Yield: 4.80%
- Quarterly Dividend if 10 Shares Owned: $11.80
Not many people will recognise the name AbbVie, but its corporate heritage will tip a few hats. The pharmaceutical maker was birthed from Abbott Laboratories in 2013.
Including its time as part of Abbott, AbbVie has increased in dividend payment for 46 consecutive years. Which is incredible for a company in the biopharmaceutical industry.
You might think, why not just go to Abbott since they have all the history… Well, AbbVie have plenty history of their own. In the short time the company has been separate, they have produced best-selling treatments for Rheumatoid Arthritis and Testosterone Replacement Therapy. They have really hit the ground running with breakthrough medicine.
#8. Lowe’s Companies Inc
- Symbol: LOW
- Market Cap: $105.00 Billion
- Dividend Yield: 1.58%
- Quarterly Dividend if 10 Shares Owned: $5.50
A small American store opened in North Carolina during 1921, which then exploded to become one of the best known hardware stores in the United States with over 2,000 locations.
Not only is Lowe’s part of the dividend aristocrats, it has paid dividend to investors since 1961. Growing this dividend for over half a century wasn’t easy, as main rival Home Depot has only managed to grow its dividend since 2009.
This is a sign that Lowe’s has plenty of excess cash to support ongoing dividend payments, but I don’t see any reason to use the spare cash since Lowe’s has also increased annual revenue by 3.9% on average for the last 10 years. And with Marvin Ellison (Lowe’s CEO) at the wheel I can only see this going up even further.
#9. Procter & Gamble Co
- Symbol: PG
- Market Cap: $308.29 Billion
- Dividend Yield: 2.54%
- Quarterly Dividend if 10 Shares Owned: $7.91
Is there a company more famous than P&G? If you haven’t used one of there products, then you’ve definitely seen their sponsorship flag at the Olympics. Founded in 1837, this 182 year old company has paid an uninterrupted dividend for 129 years. That is close to a record.
Owning major brands such as Tide detergent, Pampers diapers and Gillette razors, P&G is by far the worlds largest consumer product company. It has once been involved in food brands as well, but now focuses on healthcare and hygiene products.
Although the economy might rise and fall, demand for products such as toilet paper, toothpaste, and soap remains stable. Not to say P&G is recession-proof, but being one of the largest companies in the world, it comes close.
And to think… P&G started it all in 1837, by manufacturing the cheap soap during the American Civil War. Fun fact: P&G were the first company to manufacture soap that floated on water.
#10. Hormel Foods Corporation
- Symbol: HRL
- Market Cap: $26.38 Billion
- Dividend Yield: 1.90%
- Quarterly Dividend if 10 Shares Owned: $2.33
On the lower end of dividend yield scale, Hormel Foods is stable and secure. Founded in 1891, Hormel is one of America’s biggest food packaging producers. The company is a dividend aristocrat, growing its dividend for 54 years.
Hormel Foods is a Fortune 500 company which manufactures and markets some of the most high quality brand-name food and meat products including, Applegate, Chi-Chi’s, Spam and Wholly Guacamole.
Because of the companies pedigree, I am confident Hormel Foods will continue to grow its dividend along with its yearly revenue. The average dividend growth over the last 7 years was 15.5%.
Dividend Payers: Mar, Jun, Sep & Dec
#11. 3M Co
- Symbol: MMM
- Market Cap: $91.19 Billion
- Dividend Yield: 3.71%
- Quarterly Dividend if 10 Shares Owned: $14.70
Not only has 3M grown its dividend for the last 58 consecutive years, it has an average annual growth in revenue of 3.6%.
The industrial conglomerate makes everything from adhesives to electric circuits all over the world, and doesn’t rely on the strength of the U.S. economy for its stability.
Although the strength of the US Dollar has made 3M’s products more expensive overseas, because the company has products that are well desired, they seem to gather a lot of traffic no matter the cost price. Which is good for generating recurring income.
#12. International Business Machines Corporation (IBM)
- Symbol: IBM
- Market Cap: $107.08 Billion
- Dividend Yield: 5.41%
- Quarterly Dividend if 10 Shares Owned: $16.30
IBM is a tech powerhouse that has revolutionised the way we use computers. The company may seem a bit outdated, but the current strides made by the company in cloud computing is only rivalled by Google, and analysts tip IBM to be the front runner when this product launches.
The company serves over 177 countries with over 352,000 employees. The recurring income produced through subscription products is what allows the company to give shareholders a generous dividend.
I also think, because of the movement towards cloud computing, the current share price for IBM is perfect for people who want to buy in for the long haul.
#13. Emerson Electric Co
- Symbol: EMR
- Market Cap: $37.10 Billion
- Dividend Yield: 3.22%
- Quarterly Dividend if 10 Shares Owned: $5.00
Emerson Electric has boosted its dividend for 60 years straight. The company manufactures a wide range of industrial products ranging from control valves, to electrical fittings.
Because of the downturn in oil prices, and the worlds effort to use less fossil fuels, Emerson have continued to cut back spending and preserve free cash flow. However the company has reported major improvements in orders from North America energy customers during the last 2 years.
The moving market has lead to Emerson developing strategies in emerging markets such as green energy, and as the company transitions, I think we will see more increases to the dividend payouts.
#14. Target Corporation
- Symbol: TGT
- Market Cap: $60.04 Billion
- Dividend Yield: 2.27%
- Quarterly Dividend if 10 Shares Owned: $6.60
Founded in 1902, Target have been paying dividends to investors since 1967, and increased that dividend for the last 17 years. That is 7 years ahead of main rival Walmart.
The number 2 discount retail store has managed to fight through a period of weak retail shopping environments. The customer trust and loyalty Target has will see them survive almost any downturn or shopping strike.
The only major competitor to Target is Walmart, who also experienced this weak retail environment. But haven’t been able to grow their dividend throughout.
#15. Exxon Mobil Corporation
- Symbol: XOM
- Market Cap: $189.80 Billion
- Dividend Yield: 7.75%
- Quarterly Dividend if 10 Shares Owned: $8.70
Since 1882 Exxon Mobil have paid investors dividend, which has seen them become one of the most trusted dividend aristocrats.
Not only is Exxon Mobil a dividend aristocrat, over the last 34 years, the dividend average annual increase has been 6.4%. Even though oil prices are down, Exxon seems to find ways to beat the market average.
Remaining one of the worlds largest oil companies, and the single largest company among the dividend aristocrats, Exxon Mobil is my number 1 dividend pick for this quarterly payment schedule. I can’t see it getting smaller anytime soon.
Be Dividend Focused
I think every investor should not only be a value investor, but be dividend focused when picking companies to invest in.
Even ETF’s, bond funds, or Mutual funds, the investor should prioritise dividend paying vehicles. Not only to hedge against potential losses in share value, but to take advantage of compound interest.
Reinvesting dividends into stocks allows you to not only gain asset appreciation of your initial investment, but the dividend value as well. Making your money grow exponentially. Take a look at the graph below, this is basically what it would look like to compound your dividend onto your share value:
It may not be that steep of a curve, but you get the idea.
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