Updated on September 2nd, 2020 by Bob Ciura

Spreadsheet data updated daily

The Dividend Kings are the best-of-the-best in dividend longevity.

What is a Dividend King? A stock with 50 or more consecutive years of dividend increases.

The downloadable Dividend Kings Spreadsheet List below contains the following for each stock in the index, among other important investing metrics:

Payout ratio

Dividend yield

Price-to-earnings ratio

You can see the full downloadable spreadsheet of all Dividend Kings (along with important financial metrics such as dividend yields, payout ratios, and price-to-earnings ratios) by clicking on the link below:





Click here to download my Dividend Kings Excel Spreadsheet now. Keep reading this article to learn more.

There are currently 30 Dividend Kings, including recent additions such as Sysco (SYY), Universal Corporation (UVV) and National Fuel Gas (NFG). Each Dividend King satisfies the primary requirement to be a Dividend Aristocrat (25 years of consecutive dividend increases) twice over.

Editor’s Note: After review, Illinois Tool Works (ITW) and Target Corporation (TGT) have been removed from our lists, as they do not qualify as Dividend Kings. You can read more about this here.

Not all Dividend Kings are Dividend Aristocrats. This unexpected result is because the ‘only’ requirement to be a Dividend Kings is 50+ years of rising dividends, whereas Dividend Aristocrats must have 25+ years of rising dividends, be a member of the S&P 500 Index, and meet certain minimum size and liquidity requirements.

Table of Contents

How To Use The Dividend Kings List to Find Dividend Stock Ideas

The Dividend Kings list is a great place to find dividend stock ideas. However, not all the stocks in the Dividend Kings list make a great investment at any given time.

Some stocks might be overvalued. Conversely, some might be undervalued – making great long-term holdings for dividend growth investors.

For those unfamiliar with Microsoft Excel, the following walk-through shows how to filter the Dividend Kings list for the stocks with the most attractive valuation based on the price-to-earnings ratio.

Step 1: Download the Dividend Kings Excel Spreadsheet.

Step 2: Follow the steps in the instructional video below. Note that we screen for price-to-earnings ratios of 15 or below in the video. You can choose any threshold that best defines ‘value’ for you.

Alternatively, following the instructions above and filtering for higher dividend yield Dividend Kings (yields of 2% or 3% or higher) will show stocks with 50+ years of rising dividends and above-average dividend yields.

Looking for businesses that have a long history of dividend increases isn’t a perfect way to identify stocks that will increase their dividends every year in the future, but there is considerable consistency in the Dividend Kings.

The 5 Best Dividend Kings Today

The following 5 stocks are our top-ranked Dividend Kings today, based on expected annual returns through 2025. Stocks are ranked in order of lowest to highest expected annual returns.

Total returns include a combination of future earnings-per-share growth, dividends, and any changes in the P/E multiple.

Dividend King #5: H.B. Fuller (FUL)

5-Year Annual Expected Returns: 7.0%

H.B. Fuller is a leading global manufacturer of adhesives, sealants, and other specialty chemical products. Industrial adhesives is the core product offering of the company. The $1.6 billion acquisition of Royal Adhesives & Sealants, which was the largest in the history of the company, boosted its annual sales by $735 million (32% growth) and enhanced its reach to more highly specialized adhesive segments. H.B. Fuller also acquired Adecol in late 2017 to improve its growth prospects in Brazil.

Source: Investor Presentation

In late June, H.B. Fuller reported (6/24/20) financial results for the second quarter of fiscal 2020. Revenues decreased -11% and organic revenues decreased -7% primarily due to the global recession. However, all of the company’s factories remained open and operational throughout the pandemic and thus performed better than expected. Its adjusted earnings-per-share fell from $0.88 to$0.68 but exceeded analysts’ consensus by $0.13. Management provided guidance for a 5%-10% decrease in revenue in the third quarter due to the coronavirus.

The company has grown its earnings-per-share at an 8.4% average annual rate in the last nine years, its record has been markedly volatile. Moreover, the results of H.B. Fuller are highly sensitive to the global recession caused by the coronavirus. If the pandemic lasts longer than currently anticipated, H.B. Fuller will be greatly affected. On the other hand, we expect the pandemic to subside and the global economy to recover from next year. We thus expect H.B. Fuller to grow its earnings-per-share at an11.0% average annual rate over the next five years off this year’s low base

That said, H.B. Fuller is more vulnerable to recessions than the typical Dividend King. During the Great Recession from 2007-2009, its earnings-per-share plunged -79%, from $1.68 in 2007 to $0.36 in 2008. Given the severe recession caused by the coronavirus, investors should account for this risk factor.

We expect H.B. Fuller to generate earnings-per-share of 19.7, which is above our fair value estimate of 15. Therefore, the stock is overvalued, and a declining valuation could reduce annual returns by 5.3% through 2025. However, this will be offset by 11% expected EPS growth and the 1.3% dividend yield, leading to total expected returns of 7.0% per year over the next five years.

Dividend King #4: Farmers & Merchants Bancorp (FMCB)

5-Year Annual Expected Returns: 11.4%

Founded in 1916, Farmers & Merchants Bancorp is a locally owned and operated community bank with 32 locations in California. Due to its small market cap ($563 million) and its low liquidity, it passes under the radar of most investors. Nevertheless, F&M Bank has paid uninterrupted dividends for 85 consecutive years and has raised its dividend for 55 consecutive years, including a 2.8% increase in May 2020.

The company is conservatively managed and, until four years ago,had not made an acquisition since 1985. However, in the last four years, it has begun to pursue growth more aggressively. It acquired Delta National Bancorp in 2016 and increased its locations by 4. Moreover, in October-2018, it completed its acquisition of Bank of Rio Vista, which has helped F&M Bank to further expand in the San Francisco East Bay Area.

In late July, F&M Bank reported (7/27/20) financial results for the second quarter of fiscal 2020. Despite the coronavirus crisis, the bank grew its earnings-per-share by 0.6% over the prior year’s quarter. Net interest margin shrank from 4.5% to 3.8% due to suppressed interest rates but net interest income edged up marginally, thanks to growth in interest-earning assets. Unlike most banks, which recorded significant loan loss provisions due to the pandemic, F&M Bank has booked provisions for loan losses equal to only 1.8% of its total portfolio thanks to its conservative portfolio.

The bank currently has a tier 1 capital ratio of 9.6%, which results in the highest regulatory classification of “well capitalized.” Moreover, its credit quality remains exceptionally strong, as there are no non-performing loans and leases in its portfolio. The prudent management results in lower leverage and thus slower growth than leveraged banks during boom times but protects the company from recessions.

The merits of this strategy were on display during the Great Recession. While most banks saw their earnings collapse, F&M Bank incurred a modest -9% decrease in its earnings-per-share, from $28.69 in 2008 to $25.57 in 2009, and kept raising its dividend.

Shares trade for a 2020 P/E ratio of 9.7, compared with our fair value estimate of 12.0. An expanding valuation multiple could increase annual returns by 4.3% per year. Plus expected EPS growth of 5% and the 2.1% dividend yield, total returns are expected to reach 11.4% per year through 2025.

Dividend King #3: National Fuel Gas (NFG)

5-Year Annual Expected Returns: 11.8%

National Fuel Gas Co. is a diversified energy company that operates in five business segments: Exploration & Production, Pipeline & Storage, Gathering, Utility, and Energy Marketing. The company’s largest segment is Exploration & Production.

Source: Investor Presentation

On August 6th, National Fuel Gas reported financial results for the third quarter of fiscal 2020. Adjusted EBITDA declined 6% year-over-year. An increase of 2.4% in production was not enough to offset the impact of weak commodity prices. Average natural gas prices and average oil prices both fell 19% from the same period one year ago.

Despite the suppressed natural gas prices, National Fuel Gas exhibited decent performance, partly thanks to its integrated business model. The company generated adjusted operating earnings-per-share of $0.57 for the quarter.

National Fuel Gas is facing a headwind due to the spread of the coronavirus, but the pandemic has affected the natural gas market much less than the oil market. In addition, the pipeline & storage and gathering segments provide a strong buffer to earnings amid low commodity prices. As a result, management expects adjusted earnings-per-share in a range of $2.75 to $2.85.

The company also raised fiscal 2021 guidance, and now expects a more meaningful recovery next year. Guidance calls for adjusted earnings-per-share in a range of $3.40 to $3.55.

Based on expected earnings-per-share of $2.85, NFG stock trades for a price-to-earnings ratio of 15.9, compared with our fair value estimate of 17.5. An expanding P/E multiple to the fair value estimate could boost annual returns by 1.9% per year over the next five years. Combined with 6% expected EPS growth and the 3.9% dividend yield, total returns are expected to reach 11.8% per year through 2025.

Dividend King #2: Altria Group (MO)

5-Year Annual Expected Returns: 12.7%

Altria Group was founded by Philip Morris in 1847. Today, it is a consumer staples giant. It sells the Marlboro cigarette brand in the U.S. and a number of other non-smokeable brands, including Skoal, Copenhagen, and the Ste. Michelle brand of wine. Altria also has a 10% ownership stake in global beer giant Anheuser Busch InBev (BUD).

On July 28th, Altria reported financial results for the 2020 second quarter. Revenue of $5.06 billion fell 2.5% year-over-year. Smokeable product volume declined 8.7% year-over-year, a full percentage point better than expectations. Smokeless product volume dropped 1%, far better than the 2.7% drop that was anticipated. Adjusted earnings-per-share came to $1.09, up 1% year-over-year. Altria also announced a 2.4% dividend increase.

The company has taken precautions to shore up its financial positions, including drawing $3 billion on its revolving credit facility, suspended its share repurchases, and it withdrew its full-year guidance due to coronavirus uncertainty. That said, the company maintained its target dividend payout ratio of 80%, in terms of adjusted EPS. If the first quarter is any indication, Altria may get through the coronavirus relatively well.

The long-term future is cloudy for cigarette manufacturers such as Altria, which is why the company has invested heavily in adjacent categories to fuel its future growth.

Source: Investor Presentation

The company purchased a 55% equity stake in Canadian marijuana producer Cronos Group, invested nearly $13 billion for a 35% equity stake in e-vapor manufacturer Juul Labs, and recently acquired an 80% ownership stake in Switzerland-based Burger Söhne Group, for its on! oral nicotine pouch brand. These investments could provide Altria much-needed growth as the cigarette market steadily declines.

In the meantime, Altria has a very high dividend yield of nearly 8%. The payout appears secure, as Altria generates huge cash flow, even during recessions. The company has increased its dividend for 51 consecutive years. Altria ranks very highly in terms of safety because the company has tremendous competitive advantages.

It operates in a highly regulated industry, which virtually eliminates the threat of new competition in the tobacco industry. Altria enjoys strong brands across its product portfolio, including the No. 1 cigarette brand. As a result, it has pricing power and brand loyalty. In addition, tobacco companies enjoy low manufacturing and distribution costs, thanks to economies of scale.

Based on expected EPS of $4.27 for 2020, Altria stock trades for a P/E ratio of 10.2, below our fair value estimate of 11. We also expect Altria to grow adjusted EPS by approximately 3.2% per year over the next five years. In addition to the 8.0% dividend yield as well as a small positive boost from an expanding P/E multiple, total returns are expected at 12.7% per year over the next five years.

Dividend King #1: Federal Realty Investment Trust (FRT)

5-Year Annual Expected Returns: 13.6%

Federal Realty is a Real Estate Investment Trust, or REIT. It concentrates in high-income, densely-populated coastal markets in the US, allowing it to charge more per square foot than its competition. Federal Realty trades with a market capitalization of $6.1 billion today.

Federal Realty’s business model is to own real estate properties that it rents to various tenants in the retail industry. This is a difficult time for retailers, as competition is heating up from e-commerce players such as Amazon (AMZN) and many others. Mall traffic is declining, which has put pressure on many brick-and-mortar retailers. Conditions for retail real estate have become even more challenging due to the coronavirus, which has forced many stores to close.

Federal Realty’s competitive advantages include its superior development pipeline, its focus on high-income, high-density areas and its decades of experience in running a world-class REIT. These qualities allow it to perform admirably, and continue growing even in a recession.

Federal Realty continues to generate positive FFO and pay dividends to shareholders, thanks to a high-quality and diversified property portfolio.

Source: Investor Presentation

Federal Realty’s competitive advantages include its superior development pipeline, its focus on high-income, high-density areas and its decades of experience in running a world-class REIT. These qualities allow it to perform admirably, and continue growing even in a recession.

The company reported weak second-quarter results, not surprisingly because of the coronavirus pandemic. FFO declined 52% from the same quarter a year ago. The portfolio was 93% leased as of June 30th. However, investors are hoping the bottom is in.

Approximately 87% of Federal Realty’s commercial tenants were open and operating as of July 31st based on annualized base rent, compared with 47% on May 1st. As of July 31st, the company collected 68% of second-quarter billed recurring rents, and 76% for July 2020. Federal Realty also increased its dividend for the 53rd year in a row.

In response to the coronavirus-related shutdowns, the company is boosting its liquidity to help it get through the coronavirus crisis. Federal Realty completed a $400 million term loan issue on May 6th, and a separate $400 million note issuance on May 9th. The company has approximately $2 billion in available liquidity consisting of cash on hand and its undrawn credit facility.

Federal Realty’s FFO did not decline on a year-over-year basis at any point in the past decade, a tremendously impressive feat given that the U.S. economy dealt with the Great Recession. And it should also be noted that the company operates in the highly cyclical real estate sector. The simple fact that it has such a consistent track record of steady FFO growth makes it one of the most desirable REITs in the market. We are forecasting 6.9% annualized FFO growth for the next five years.

Based on expected 2020 FFO-per-share of $5.73, Federal Realty stock trades for a price-to-FFO ratio of 14.0. Our fair value estimate for Federal Realty is a price-to-FFO ratio (P/FFO) of 15. We view Federal Realty stock as slightly undervalued. A rising P/FFO multiple could reduce shareholder returns by approximately 1.4% per year over the next 5 years.

However, expected annual FFO-per-share growth of 6.9%, plus the 5.3% dividend yield, lead to expected total annual returns of 13.6% per year over the next five years.

Analysis Reports On All 30 Dividend Kings



All 30 Dividend Kings are listed below by sector. You can access detailed coverage of each by clicking on the name of each Dividend King. Additionally, you can download our newest Sure Analysis Research Database report for each Dividend King as well.

Basic Materials

Consumer Cyclical

Consumer Defensive

Energy

National Fuel Gas (NFG) – [8/19/20 Sure Analysis report]

Financial Services

Healthcare

Industrial

Real Estate

Utilities

Additionally, you can see the Dividend Kings analyzed in the video below.

Performance Of The Dividend Kings

The Dividend Kings underperformed versus the S&P 500 ETF (SPY) in August 2020. Return data for the month is shown below:

Dividend Kings August 2020 total return: 3.6%

SPY August 2020 total return: 7.0%

In 2019, the Dividend Kings as a basket under-performed the S&P 500 ETF (SPY) by a fairly wide margin. Stable dividend growers like the Dividend Kings tend to under-perform in bull markets, and outperform on a relative basis during bear markets.

The Dividend Kings are not officially regulated and monitored by any one company. There’s no Dividend King ETF. This means that tracking the historical performance of the Dividend Kings can be difficult. More specifically, performance tracking of the Dividend Kings often introduces significant survivorship bias.

Survivorship bias occurs when one looks at only the companies that ‘survived’ the time period in question. In the case of Dividend Kings, this means that the performance study does not include ex-Kings that reduced their dividend, were acquired, etc.

But with that said, there is something to be gained from investigating the historical performance of the Dividend Kings. Specifically, the performance of the Dividend Kings shows that ‘boring’ established blue-chip stocks that increase their dividend year-after-year can significantly outperform over long periods of time.

Notes: S&P 500 performance is measured using the S&P 500 ETF (SPY). The Dividend Kings performance is calculated using an equal weighted portfolio of today’s Dividend Kings, rebalanced annually. Due to insufficient data, Farmers & Merchants Bancorp (FMCB) returns are from 2000 onwards. Performance excludes previous Dividend Kings that ended their streak of dividend increases which creates notable lookback/survivorship bias. The data for this study is from Ycharts.

In the next section of this article, we will provide an overview of the sector and market capitalization characteristics of the Dividend Kings.



Sector & Market Capitalization Overview

The sector and market capitalization characteristics of the Dividend Kings are very different from the characteristics of the broader stock market. The following bullet points show the number of Dividend Kings in each sector of the stock market.

Industrial: 7

Consumer Defensive: 9

Utilities: 4

Consumer Cyclical: 2

Financial Services: 3

Basic Materials: 2

Real Estate: 1

Healthcare: 1

Energy: 1

The Dividend Kings are overweight in the Industrials, Consumer Defensive, and Utilities sectors. Interestingly, The Dividend Kings have no exposure to the Technology sector, which is the largest component of the S&P 500 index.

The Dividend Kings also have some interesting characteristics with respect to market capitalization. These trends are illustrated below.

3 Mega caps ($200 billion+ market cap; JNJ, PG, and KO)

11 Large caps ($10 billion to $200 billion market cap)

8 Midcaps ($2 billion to $10 billion)

8 Small caps ($300 million to $2 billion)

Interestingly, 16 out of the 30 Dividend Kings have market capitalizations below $20 billion. This shows that corporate longevity doesn’t have to be accompanied by massive corporate size.

Final Thoughts

Screening to find the best Dividend Kings is not the only way to find high quality dividend growth stock ideas.

Sure Dividend maintains similar databases on the following useful universes of stocks:

There is nothing magical about investing in the Dividend Kings. They are simply a group of high-quality businesses with shareholder-friendly management teams that have strong competitive advantages.

Purchasing businesses with these characteristics at fair or better prices and holding them for long periods of time will likely result in strong long-term investment performance.

The most appealing part of investing is that you have unlimited choice. You can buy into mediocre businesses, or just the excellent companies. As Warren Buffett says: