These stocks have rock-solid businesses and they have impressive track records for paying dividends.
A company’s track record for paying dividends is a good indicator of how versatile and adaptable the business is in dealing with changing economic conditions. That doesn’t mean that the dividend will always be safe and that payouts will always continue, but it’s an important factor that dividend investors often consider when picking income stocks. Three stocks that have been making dividend payments going back to the 1800s are Eli Lilly (LLY -2.77%), Coca-Cola (KO 0.29%), and Toronto-Dominion Bank (TD -5.89%). Here’s a look at how far back their streaks go and why these are still terrific dividend stocks to own today.
1. Eli Lilly: 1885
Eli Lilly has been paying investors a dividend since 1885. Over the years, it has evolved, acquired companies, brought new drugs to market, and continued to be a reliable dividend investment. Today, the stock may not look like much of an income investment; it’s only yielding 0.7% — well below the S&P 500 average of 1.4%.
But in reality, this has been an exceptional dividend stock. The company has doubled its dividend payments in just the past five years. Although its yield looks low, that’s only because of how hot the stock has been of late. In three years, shares of Eli Lilly have soared more than 300%. If not for its rapidly rising share price, Eli Lilly’s dividend yield would be much higher than it is today.
The company’s growth prospects look amazing. Eli Lilly has a couple of promising assets in its portfolio in Zepbound and Mounjaro, with the former being a top weight-loss drug and the latter being approved for diabetes. Together, these drugs could generate more than $50 billion in annual revenue for Eli Lilly. With strong financials and some terrific growth on the horizon, the drugmaker isn’t just a good dividend stock but also a phenomenal option for growth investors.
2. Coca-Cola: 1893
Soft drink giant Coca-Cola is a top dividend growth stock. It’s part of an exclusive club of Dividend Kings, having increased its payouts for decades. While it has been raising its dividend payments for 62 consecutive years, its streak of issuing dividends goes back all the way to 1893. Today, the stock’s dividend yields 3.1%.
Despite the continuous rate hikes, Coca-Cola’s dividend isn’t unsustainable; profits have soared along with the dividend increases. Coca-Cola’s payout ratio is around 75%, which is a sustainable rate and offers room for even more aggressive rate hikes than the already generous 5.4% increase the company announced earlier this year.
Coca-Cola’s business remains solid, with the company projecting around 7% organic revenue growth this year. With a versatile and seemingly unshakable business model, this is one of the best dividend stocks you can buy and hold for the long haul.
3. Toronto-Dominion Bank: 1857
The longest dividend streak on this list belongs to Toronto-Dominion Bank. Going back to 1857, the Canadian-based bank has one of the best track records for paying dividends that you’ll find.
It doesn’t have a long streak of dividend increases like Coca-Cola does, but it does offer investors a much higher yield at 5.1%. Investors haven’t been all that bullish on bank stocks amid rising interest rates, but make no mistake, TD is one of the safer options in the industry you can hold in your portfolio.
In the trailing 12 months, the company has reported net income totaling 11.5 billion Canadian dollars on revenue of CA$53.6 billion, for a solid profit margin of 21%. TD is one of Canada’s top chartered banks, and it also has a strong presence in the U.S. The company’s diversified business makes it a suitable option for long-term investors, and its high-yielding stock makes now an optimal time to consider buying shares of TD.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
