If history is any guide, the best thing you can do with your money is buy dividend stocks. Numerous studies underscore the idea that when it comes to building generational wealth, dividend stocks outperform nonpaying ones by a wide margin.
The asset managers at Hartford Funds similarly found that dividends contributed 40% to the total return of the benchmark S&P 500 going all the way back to 1930. Even during the so-called “lost decade” of the 2000s, when the dot-com bubble burst, 9/11 happened, and the housing and financial markets crashed — resulting in the negative returns on the S&P 500 — dividend stocks on the index still gained 1.8%.
The incredible power of dividends, reinvestment, and compounding combined can make investors wealthy over time, and perhaps looking toward companies that have made payouts to investors for not just 10 years, 20 years, or even 50 years, but have paid dividends for a century or more might be the best place to begin.
Following are four companies that have made dividend payments for at least 100 years.
The granddaddy of all dividend-paying stocks is York Water (YORW 2.53%), a utility stock that provides clean water and wastewater services to 54 municipalities in south-central Pennsylvania. It was founded in 1816, and not only is it the oldest publicly traded company in the country, but it has never missed a single dividend payment in 205 years, marking the longest string of consecutive dividends in America.
What makes York an attractive investment beyond its time-tested dividend track record is the necessity and predictability of utility stocks, and especially water utilities. You can’t not have clean water, and eliminating wastewater is essential. They also typically operate as monopolies or duopolies, so competition is limited. That means their ability to predict future cash flows is fairly clear and gives them exceptional clarity in planning for maintenance and future expansion.
York Water’s dividend currently yields 1.8% annually, and it seems completely possible that it’ll be around in another 200 years, still paying a dividend like clockwork.
Oil and gas giant ExxonMobil (XOM -3.85%) hasn’t been around quite as long as York Water, but it has existed for 135 years and has paid a dividend for 112 of them. It has also increased the payout for 40 consecutive years. It didn’t raise it in 2020, during the pandemic, but because it raised the dividend in the fourth quarter of 2019, Exxon shareholders received more in dividend payments the following year than they had the year before.
Exxon also recently became one of the most profitable companies on the market, surpassed only by Apple and Microsoft. While those rankings can be very fluid over time, the oil company’s program of expansion and exploiting its vast resources will ensure it remains a top-tier company with the ability to survive well into the future.
Stanley Black & Decker
If you own a power tool, there’s a good chance that it’s made by Stanley Black & Decker (SWK -1.13%). It now owns some of the biggest and best brands, including Craftsman, DeWalt, Bostitch, and Porter-Cable, as well as its namesake Stanley and Black & Decker product lines.
The toolmaker has paid dividends for 146 years and has increased its dividend yearly for 55 consecutive years, making it a Dividend King, or one that has increased its payout for 50 years or more.
Stanley, though, is a turnaround story right now, as it has accumulated a lot of debt in pursuit of adding all those tool brands under its umbrella. With demand for tools declining over fears of a recession, the stock has lost nearly half its value over the past year. But Stanley’s dividend payout ratio of just 35% gives it plenty of room for future growth while also making the dividend very safe.
Procter & Gamble
Procter & Gamble (PG 2.09%) is another consumer-products giant that you probably can’t go a day without using one of its brands. From Pampers diapers to Tide laundry detergent, Old Spice deodorant to Crest toothpaste, Procter & Gamble has a “high-touch” relationship with American and global households. And the beauty of its business is that because virtually all of its products are consumables, consumers keep coming back for more.
The beauty of a name brand is people come to associate it with quality, consistency, and reliability, which makes it easy to turn to again and again. The same can be said for its dividend, which it has paid every year since 1891, some 132 years.
Procter & Gamble’s dividend yields 2.6% annually and could safely continue increasing over the century to come.
Rich Duprey has positions in ExxonMobil and Procter & Gamble. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.