2 Inflation Busting Stocks To Hold Forever

Worried about inflation? You’re not alone. Rising rates in 2022 have sent the S&P 500 down 21.76%. But dividend growth investors haven’t had it quite as bad. The Dividend Aristocrats index is down -15% YTD.

Dividend aristocrats are companies listed on the S&P 500 Index and have raised their dividends for at least 25 consecutive years. These companies tend to have durable competitive advantages and dividend-friendly management that result in both reliable dividends and increases, year after year.

You may have also heard about the dividend kings list. Companies qualify if they increase their dividend for at least 50 consecutive years, but they are not necessarily listed on the S&P 500.

In this article, I’ll cover 2 companies that have been around for decades, have a reliable income stream and have a fantastic track record for increasing their dividends.

Parker Hannifin Corporation (PH)

Parker-Hannifin Corp. is a company founded in 1917 by Arthur L. Parker and is currently headquartered in Cleveland, Ohio. Today, the company specializes in the production of motion and control technologies. Additionally, it offers engineered solutions for the aerospace, industrial, and mobile markets. 

With more than 55,000 employees, the company is one of the biggest in the motion control technology industry.

Parker Hannifin provides products and services through two subsidiaries: 

• The Diversified Industrial Industry Sector includes products, engineered solutions, and services used by other businesses in the industrial sector.
• The Aerospace Systems Sector provides aftermarket support and sells commercial transports, engines, helicopters, military aircraft, missiles, and unmanned aerial vehicles.

Thanks to the company’s success and leadership in innovative aerial technologies, Parker increased its dividends for 65 consecutive years, cementing its place on the Dividend Kings list.

Stockholder Information

Revenue for Parker-Hannifin's most recent quarter, which ended June 2022, came in at $4.187B, an increase of 5.71% from the same quarter last year.

Parker-Hannifin currently pays an annual dividend of $5.32, representing an (annualized) yield of 2.05%. Its latest quarterly dividend of $1.33 was declared on Aug 18, 2022.  If history is to repeat itself, the company should increase its dividend in January.

Parker-Hannifin closed the week out at $269.39 per share. Its 52-week high is $340.00, 26.2% higher than its most recent closing price. Also, its 52-week low stock price is $230.44, which is about 14% lower than its most recent closing price. 

Analysts maintain a “Moderate Buy Rating” on the stock, and expect it to move as high as $350- representing a 30% increase over the last trading price.

Why I Like Parker-Hannifin

The aerospace and defense industries are vital parts of the economy as they contribute to economic expansion and national security. Technologies developed for these two industries have a wide range of applications in other industries, making them a vital innovation driver for industrial growth.

The company is not only a market leader in the given industries but also an innovative force, developing technologies to overcome many of the aerospace industry's current issues.

Additionally, the company's consistent performance and leadership in several industries, including aerospace, climate control, and electromechanical, has gained popularity among investors seeking a consistent return on their investment. 

S&P Global Inc. (SPGI)

S&P Global Inc. is an information services provider headquartered in New York, New York. Founded in 1917, the company offers financial services, education, and business information and analytics in the global capital, commodity, and automotive markets. 

The company’s operations are divided into six segments:

• S&P Global Ratings offers impartial investment research, including evaluations of different financial instruments.
• S&P Global Market Intelligence provides investment firms, banks, insurance companies, enterprises, and universities with comprehensive real-time data, research, and analytics.
• S&P Dow Jones Indices provides CE-accredited research data to investors. The S&P 500 index and the Dow Jones Industrial Average are also included in this segment.
• S&P Global Commodity Insights offers information and benchmark prices for various industries. 
• S&P Global Mobility offers customers information and data about everything related to automotive.
• S&P Global Engineering Solutions provides engineers and technical professionals with solutions to many technical issues with the help of Artificial Intelligence (AI).

Stockholder Information

On August 2, 2022, the company released its results for the second quarter of 2022. SPGI’s revenue for the quarter ending June 30, 2022, was $2.993 billion, a 42% increase year-over-year.

Additionally, on September 28, 2022, the company announced a quarterly dividend of $0.85 per share, payable on December 12, 2022, to shareholders of record on November 28, 2022. This represents an annualized dividend yield of 1.16%.  

Dividend growth inventors will appreciate that S&P Global has increased its dividend every year since 1972 - that’s 50 consecutive years - making it a newly minted dividend king.

SPGI’s most recent closing stock price was $295.94. The company’s 52-week high of $484.21 is 63.6% higher than its most recent closing price. That said, SPGI is trading above its 52-week low of $279.32. 

Analysts maintain a target price between #364 and $434. If you believe the estimates, this could mean a potential upside of between 23%-46.6% - dividends excluded.

Why I Like SPGI

S&P Global Inc. (SPGI) provides valuable data about market dynamics and the global economy. The company’s comprehensive research and insights have made it a global leader in the information and analytics sector. Further, its Standard & Poor's 500 (S&P 500) is one of the most widely followed stock indexes. This, bundled with the company’s uninterrupted progress, has made SPGI a wise choice for investors - and one of my favorites!

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