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Seven dividend elites: 100 years of dividends

"While companies have been cutting dividends at an historic pace over the last 24 months, the fact is that there are still quality companies with long histories of paying dividends that represent good long-term investments," says Chuck Carlson, a specialist in companies offering dividend reinvestment plans.

In his top-notch The DRIP Investor he says, "The seven stocks featured here have each been paying a dividend for over 100 years, have raised their dividend annually for at least the last quarter century and offer direct-purchase plans.

"Coca-Cola (NYSE: KO) has a strong position among this group of dividend elites. The company has paid a dividend continuously since 1893. The firm has lifted its dividend annually for the last 47 years.

"The firm will continue to face challenges in some of its beverage markets. But Coca-Cola's continued expansion outside the soda market should help results.

"Also, its strong overseas business should get a lift from the weak dollar and presence in emerging markets. The yield of well over 3% enhances total-return appeal. The stock should at least match the market over the next 12 months and should outperform during market weakness.

"Colgate-Palmolive (NYSE: CL) takes a back seat to no company when it comes to consistency and growth of its dividend. The firm has been paying a dividend since 1895, with the dividend increased annually for the last 46 years.

"Colgate-Palmolive has been an excellent stock over the last 18 months. These shares are trading near their all-time high; that is quite a feat compared to the major price declines experienced by most stocks over the same time period. A weak dollar should help profits.

"While I don't expect Colgate-Palmolive to be at the top of the leader board going forward -- the stock is not cheap at 15 times 2010 earnings -- I would expect these shares to put up decent total returns over the near and long term.

"Exxon Mobil (NYSE: XOM) usually appears on everyone's list of dividend elites, for good reason. The firm has been paying a dividend since 1882 and has increased the dividend annually for the last 26 years. Strong cash flows should continue to fund a rising dividend stream; it currently yields 2.3%.

"The stock has been trading in a sideways range for about seven months. It is usually not among the leaders in the energy sector when the group is hot, but hold up quite well during down periods for oil stocks. I own the stock and appreciate its steady, consistent performance.

"Eli Lilly (NYSE: LLY) has paid its dividend since 1885. Dividends have increased annually for more than 40 years. Pharmaceutical stocks have been crimped by a number of factors, including uncertainties surrounding health-care reform, generic drug competition, and weak new-product pipelines.

"Lilly stock is trading at a substantial discount to its 2007 high of $61. Lilly recently pulled the plug on its osteoporosis drug candidate arzoxifene due to disappointing clinical trial results.

"Still, the stock appears to be discounting a lot of bad news. These shares trade at only seven times 2010 consensus earnings estimate of $4.54 per share. The stock's current yield is 5.9%.

"PPG Industries (NYSE: PPG) is a global supplier of paints, coatings, optical products, specialty materials, chemicals, glass, and fiber glass.

"Given that the firm has exposure to a variety of industrial markets that have been under pressure as a result of the economic slowdown, it's not surprising that per-share profits will likely fall at least 40% this year. An earnings recovery is expected in 2010.

"The company has paid a dividend annually since 1899 and has boosted its dividend every year for 37 years. The stock's current yield is 3.9%.

"Investors have bid these shares significantly higher from their March lows, and there is some downside risk should an earnings recovery be delayed. The stock has special appeal in the $40s.

"Stanley Works (NYSE: SWK) may surprise some people with its stellar long-term dividend record. The company, best known for its tools, has paid a dividend since 1877 and has boosted that dividend in each of the last 42 years.

"That is pretty impressive for any company, especially one exposed to economically sensitive markets, such as housing. That exposure is a reason per-share profits will decline at least 30% this year.

"Still, the 2009 consensus earnings estimate of $2.36 per share is more than adequate to cover the stock's current indicated annual dividend of $1.32 per share.

"Procter & Gamble (NYSE: PG) is also a member of this exclusive club. P&G has paid a dividend every year since 1891 and has boosted its dividend annually for more than 50 years.

"A board member purchased 3,800 shares of Procter & Gamble in August at just under $54 per share. It appears that this insider is taking advantage of the rather sluggish price action to pick up shares.

"True, corporate insiders are often early in their buying, and this insider will have to be patient given what is likely lackluster price action in the near term.

"Procter & Gamble is fighting the headwinds of restrained consumer spending. While things should loosen up a bit in 2010, profits over the next few quarters will be crimped. Still, I like the company's brands, management, and long-term potential and regard it as a quality holding in a portfolio."

http://www.bloggingstocks.com/2009/09/02/seven-dividend-elites-100-years-of-dividends/