Markets rarely stay calm for long.
Between economic uncertainty, interest rates that may or may not come down, and the endless headlines that move stocks day by day, investors often find themselves reacting to short-term noise rather than focusing on long-term fundamentals- and I can relate to that.
That's one reason I often turn to Dividend Kings to generate long-term income. These are companies that have increased their dividends for at least 50 consecutive years. They have a track record that often signals quality while balancing shareholder rewards and reinvestment. The result? These companies keep growing and continue attracting investors over time.
So today, I’ll show you three Dividend Kings that could fit well in a long-term income portfolio as a result of their dividend growth.
How I came up with the following stocks
Using Barchart’s Stock Screener, I selected the following filters to get my list:
- 5-YR Dividend Growth (%): I will use this column to sort the results from highest to lowest.
- Dividend Payout Ratio: 35-65%. It’s the range that suggests companies are paying sustainable dividends and still investing in themselves for growth.
- Current Analyst Rating: 3.5-5. Stocks that are “Moderate” to “Strong Buy”
- Number of Analysts: 12 or more. A higher number indicates stronger confidence in the rating.
- Dividend Investing Ideas: Dividend Kings.
With this screen, I got 10 results and will cover three Dividend Kings with the highest 5-yr dividend growth.
Lowe’s Companies (LOW)
Lowe’s Companies is one of the largest home improvement retailers serving professionals and DIYers. It sells a wide range of products used in everything from small home projects to larger building and renovation jobs. Lowe’s is the kind of store people turn to for everyday home projects because it is familiar, convenient, and easy to access. And with new stores opening regularly, that expanded reach could also support more growth.
Now, Lowe’s has increased its dividends for more than 50 consecutive years, and it currently pays a forward annual dividend of $4.80. That translates to a yield of around 2%. While that might not sound like a lot, over the past five years, Lowe's has grown the dividend by just over 106%, all while maintaining a payout ratio of 39%, which leaves ample room for continued growth.
Further, a consensus among 29 analysts rates the stock a “Moderate Buy”, and the high target price of $325 suggests as much as 36% potential upside.
Abbott Laboratories (ABT)
The next Dividend King is Abbott Laboratories, a diversified healthcare giant focused on developing medical devices, diagnostics, nutrition products, and medicines.
Innovation is one reason Abbott grew into a healthcare leader. For example, recently, the FDA cleared Lingo, its innovative over-the-counter continuous glucose monitor designed for consumers who want to track their glucose levels in real time.
Abbott pays a forward annual dividend of $2.52, yielding around 2.3%. Its dividends have increased more then 70% since 2020. At the same time, its 45% payout ratio suggests that Abbott still has plenty of room for dividend growth.
Finally, a consensus among 28 analysts rates the stock a “Strong Buy”, the highest in this list. The $158 high target price suggests as much as 43% upside potential.
RPM International Inc (RPM)
The last Dividend King on my list is RPM International, a company that manufactures specialty coatings, sealants, and building materials for home, commercial, and industrial settings. RPM could gain serious traction over the next few years as it announced plans to acquire Kalzip, a Germany-based manufacturer known for aluminum roofing and facade systems used in major construction projects.
On the topic of dividends, RPM has increased its payouts for 52 consecutive years. It currently pays a forward annual dividend of $2.16, translating to a yield of about 2.1%.
Over the past five years, though, that dividend has grown 39%, and with a payout ratio of roughly 40.20%, the company still has room to grow it.
Plus, a consensus among 16 analysts rates the stock a “Moderate Buy,” while the high target price of $149 suggests a 47% potential upside.
Final Thoughts
What these three Dividend Kings have in common is consistency.
They may not offer the flashiest yields or headlines that spark investor buzz. In fact, for some investors, it might even look excruciatingly boring. But that kind of boring often means stable businesses that deliver steady and growing payouts for long-term investors.
Still, no company can guarantee anything. However, their fundamentals may offer one of the more reliable paths to building long-term successful portfolios.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
