In all there's 18 companies that have been able to do this over the long haul. Actually, there's more, but there's only 18 that have been able to reduce their DPR at a 5% compound annual growth rate. Here they are in all their glory.
Remember, though, decreasing the payout ratio is only one half of the trick. Untouchables must increase their cash dividend, by a lot. By "a lot," I mean at a double-digit compound annual growth rate. Double digits might be a tad harsh on my part, since a 7% compound annual growth rate will double a long-term investor's yield in 10 years (less if they reinvest). Applying this "harsh" criteria, yields (no pun intended) the following list of Untouchables.
For the GMG Defensive Beta Fund (MPDAX), of which I am the co-portfolio manager, we own Monsanto (MON), Deere (DE), Caterpillar (CAT), Disney (DIS) and Exxon (XOM). A note of caution to would-be Untouchable finders out there. Across a variety of financial databases we subscribe to, we found complete 10-year dividend data on just 133 of the 500 companies that comprise the S&P 500. Companies with incomplete data were left out of my analysis. Many of them, probably, should have been because they missed making dividend payments. But incomplete data could also stem from mergers, acquisitions, divestitures and the like. This means looking carefully and piecing together data might lead to a larger list of Untouchable Dividend Payers. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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