What’s the one thing we know about dividend-yielding stocks? Over the long-run, they outperform their non-dividend-paying peers. This is true even more so when you take advantage of their dividend reinvestment programs (DRIP) and direct stock purchase plans (DSPP).
And with tension in Greece mounting, geopolitical tensions simmering in the Middle East, and the Federal Reserve on the verge of raising interest rates, dividend-yielding stocks with a history of providing capital appreciation and increasing their annual dividend yield can help protect your portfolio from short-term market volatility.
Below are three stocks with a long history of raising their annual dividend yields. They should be able to continue to provide investors with solid capital appreciation regardless of what the Federal Reserve does in the second half of this year.
Also Read: Best Dividend Stocks for July 2015
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Bristol-Myers Squibb Company (NYSE/BMY)
Bristol-Myers Squibb Company (NYSE/BMY), a global biopharma firm and the name behind Abilify and Orencia, is a financially-solid, diversified drug maker with an impressive product pipeline and strong international footprint.
What’s not to love about Bristol-Myers Squibb? The company currently provides an annual dividend of around 2.2% or $1.48 per share. Moreover, it has provided investors with a dividend for more than 300 consecutive quarters and has raised its annual dividend since 2009. (Source: bms.com, last accessed June 23, 2015.)
In 2009, the company paid an annual dividend of $1.24 ($0.31 quarterly); and in 2014, paid out $1.44 ($0.36 per quarter) per share. In 2015, it is on pace to pay out $1.48 per share, or $0.37 per quarter.
Bristol-Myers is also great for DIY investors. The company offers both a DRIP and DSPP; this allows investors to skip their broker and reinvest their dividends and purchase additional shares through an affiliate.
Bristol-Myers is more than just a dividend machine. Since 2000, the company’s share price has climbed 109%. Since the markets bottomed in March 2009, its share price has soared more than 400%. Since the beginning of the year, Bristol-Myers’ share price has increased 14%. The NYSE, on the other hand, is up an anemic 2.6%.
The Procter & Gamble Company (NYSE/PG)
The Procter & Gamble Company (NYSE/PG) is an industry giant whose products reach every corner of the globe. As the world’s largest maker of consumer packaged goods, Procter & Gamble is home to brands like “Tide,” “Crest,” “Gillette,” “Always,” “Olay,” and “Downy.”
A company recognized for its strong brands, Procter & Gamble is also well known on Wall Street for its very long history of increasing its annual dividend yield. This is something the company has done for each and every one of the last 59 years; and counting. The company currently pays an annual dividend of 3.29% or $2.65 per share.
During the Great Recession, while many companies were cutting back on their dividend payouts to save cash, Procter & Gamble was increasing theirs. Since March 2009 (when the markets bottomed) P&G has raised its annual dividend 43% from $1.76 per share to $2.53 per share in 2014. Over the same time frame, the company’s share price has climbed more than 125%.
That said; 2015 has not been kind to Procter & Gamble. Currently trading near $79.75 per share, P&G is up roughly 32% over its pre-Great Recession high. But it’s down slightly more than 12% year-to-date. While revenues have been decent, the strong U.S. dollar has been devaluing sales.
The company is also streamlining operations to focus on its largest, most profitable operations. In 2014, it sold off “Duracell” to Berkshire Hathaway. In March, the company announced plans to sell its “Vicks VapoStream” U.S. brand business to Helen of Troy Ltd.
The company is also said to be exploring a sale or initial public offering (IPO) of some of its beauty brands; a move that would accelerate the company’s plans to divest itself of up to 100 product lines. (Source: theglobeandmail.com, last accessed June 23, 2015.)
Until that time comes however, investors can find solace in the company’s 3.29% annual dividend. And if history is any indicator, the company’s share price will rebound, like it always has.
If you are a current shareholder or want to take advantage of the dip in Procter & Gamble’s share price, you can participate in the company’s DSPP and DRIP through its affiliate program.
Exxon Mobil Corporation (NYSE/XOM)
Exxon Mobil Corporation (NYSE/XOM) is the world’s largest publicly-traded integrated oil company. At the end of 2014, the company had proved reserves of 25.3 billion barrels of oil equivalent. It was the 21st consecutive year that Exxon Mobil replaced more than 100% of its production. (Source: exxonmobile.com, last accessed June 23, 2015.)
Exxon Mobil is also the largest refiner and marketer of petroleum products in the world. Despite the continued pressure on oil prices—which inevitably impacts the company’s share price—the fact of the matter is, Exxon Mobil isn’t going anywhere. It’s an industry giant with a global presence. And the world isn’t quite ready to rely 100% on wind and solar or other renewable resources.
Until that does happen, investors can rest easy knowing Exxon pays an annual dividend of 3.43% or $2.92 per share. More impressively, Exxon has raised its annual dividend for the last 33 consecutive years. Even in the face of falling oil prices, Exxon has been raising its dividend.
Since the markets bottomed in 2009, Exxon has raised its dividend yield 62% from $1.66 per share in 2009 to $2.70 per share in 2014. More recently, since June of 2014 when oil prices started their descent, Exxon has raised its quarterly dividend from $0.69 per share to $0.73 per share. To put that into perspective, since last June, oil prices have fallen more than 40% while Exxon’s quarterly dividend has climbed almost six percent. (Source: Exxonmobile.com, last accessed May 21, 2015.)
For even more perspective, Exxon Mobil’s dividend payments to shareholders have grown at an average annual rate of 6.4% over the last 32 years.
To help strengthen your investment portfolio, you can also take part in Exxon’s DRIP and DSPP.