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The Century Club: 3 Companies That Have Paid Dividends For More Than 100 Years

A Lifetime of Dividends, selecting 3 companies that have paid dividends for a century or more to build the foundation of dividends to last a lifetime.

Individuals who are interested in dividend investing enjoy the idea of sharing in a company's profits. As an equity shareholder of a company that pays dividends, part of their earnings will be disbursed in the form of a dividend. Two of the most common reasons investors elect to add dividend-paying companies to their portfolio are to either generate passive income or help rebuild their income in retirement. There are many different theories on investing, and there certainly isn't a one-size-fits-all that everyone should follow. My investment strategy is a hybrid approach. I have 100% of my retirement contributions going into an S&P 500 index fund. Outside of retirement, I have four baskets of investments I contribute to, which include funds, dividend-producing stocks, big tech, and growth companies. To give some examples, I consider companies such as Apple, Amazon, and Facebook part of big tech while others like Cloudflare and Palantir would be growth companies even though they fall in the information technology sector. Companies such as Omega Healthcare Investors, AT&T, and Coca-Cola would fall in my dividend company bucket.

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My nephew turned five last month, and we have been investing on his behalf so he can start life in a great position when he becomes an adult. We have been mimicking my personal approach and have invested in some S&P growth funds, big tech companies, growth companies & funds, and some dividend stocks. One of the things I have thought about is generating a lifetime of dividends for myself and my nephew. I want to invest in companies with a long track record of paying dividends, annual dividend increases, and strong potential to replicate the process into the future. With my nephew being five years old, the challenge is selecting companies that can stand the test of time and provide a lifetime of dividends for him.

My criteria includes finding companies that have paid dividends for at least 100 years, have at least 25 years of consecutive dividend increases, a low enough payout ratio to continue their dividend increases, and that I believe will be able to pay dividends continuously over the next century. These requirements take just about every company out of the equation except for the most trustworthy dividend payers someone could invest in. Three of the dividend companies I will be investing in for my nephew are the Coca-Cola Company (KO)Consolidated Edison (ED) and Procter & Gamble (PG). I have the utmost confidence that these three companies will continue to pay dividends throughout my lifetime and beyond.

Dividends For A Lifetime Company #1: The Coca-Cola Company (KO)

Funny enough, I just had an ice-cold Coke from a glass bottle with my lunch, and it was delicious. I am convinced that the Coca-Cola logo is the most recognized company symbol globally. The Coca-Cola Company has been in business for 135 years, and its products are sold in more than 200 countries and territories globally. No matter where you travel, there is a high probability you can find a nice refreshing Coca-Cola. From an operational standpoint, during the pandemic, The Coca-Cola company sold 1.9 billion servings each day throughout its global network. The Coca-Cola Company has operated throughout every global event in the past century and hasn't missed a step. I am willing to bet that in the year 2100, history will repeat itself, and billions of people will be enjoying their products.

(Source: The Coca-Cola Company)

(Source: The Coca-Cola Company)

I believe it would be hard to find someone who disagrees that The Coca-Cola Company shouldn't be selected when building a portfolio that will pay dividends for a lifetime. Coke's dividend is one of a kind as it's been paid to shareholders since 1920. Today 51 companies have increased their dividend for 50 consecutive years and are considered Dividend Kings. Coke checks off all of my boxes. This is a company that has stood the test of time, paid a dividend for over 100 years, and has increased its dividend for 59 consecutive years. Today Coke trades for $57.05 per share and pays a dividend of $1.68 which is a forward yield of 2.95%. Coke has a good payout ratio of 74.69% with a 5-year average growth rate of 4.07%. In 2020 Coke generated an 8.9% return on assets, 40.5% return on equity, and generated $2 in free cash flow per share.

(Source: Seeking Alpha)

(Source: Seeking Alpha)

Dividends For A Lifetime Company #2: Consolidated Edison (ED)

Consolidated Edison's roots date back to the industrial revolution. Originally Con-Ed provided natural gas to buildings nearly 100 years before the typical American household had electricity. I love utility stocks because they have built-in demand, are geographic monopolies, and everyone needs their product. The barriers of entry are some of the toughest you will find throughout any business. Think about what would occur if a blackout occurred? Is there another type of company that is as critical to our way of life as utility companies? Everyone pays their electric and gas bills, not just because it's the right thing to do but because they are absolute essentials. Con-Ed provides electricity to roughly 3.3 million customers and gas to around 1.1 million customers in New York City and Westchester County. With the largest city in the world within Con-Ed's territory, there will be no shortage of customers, and the energy demand will continue to keep the monthly checks flowing into Con-Ed's coffers. Dividend investors can also take comfort because Con-Ed has a built-in annual rate increase that will help support its future dividend increases.

(Source: Consolidated Edison)

(Source: Consolidated Edison)

Con-Ed has paid a dividend since 1885 and has provided shareholders with dividend increases for the past 47 years. Today Con-Ed trades at $74.52 per share and pays an annual dividend of $3.10 for a forward yield of 4.16%. Con-Ed has a payout ratio of 72.76% and a 5-year growth rate of 3.13% for its dividend. Con-Ed could be the safest high-yielding dividend in the market as its paid a dividend for more than 125 years. You may not find a higher quality 4% yielding company in the market. Con-Ed is three years away from being crowned a Dividend King, and with a payout ratio of 72.76%, Con-Ed has enough firepower to keep the dividend increases coming.

(Source: Seeking Alpha)

(Source: Seeking Alpha)

Dividends For A Lifetime Company #3: Procter & Gamble (PG)

Tide, Bounty, Charmin, Gain, Puffs, Gillette, Old Spice, Cascade, Dawn, Mr. Clean, Crest, Oral-B, Vicks, Pepto Bismol, Pampers, Luvs, I am willing to bet that you would find a product from one of these brands in your home. If you walk through your local supermarket, Target, Walmart, or Costco think about how much retail space is taken up by these brands. The one thing these brands have in common is that they are part of Procter & Gamble's (PG) product lines. Procter & Gamble is one of the largest consumer goods companies in America. Their portfolio includes products in baby care, fabric care, family care, feminine care, grooming, hair care, home care, oral care, personal health care, and skin & personal care.

(Source: Procter & Gamble)

(Source: Procter & Gamble)

Procter & Gamble is responsible for producing many of the everyday products that individuals use on a daily basis. Many companies don't last 50 years, let alone 100 years. Procter & Gamble broke the mold as their business operations have been in existence for over 180 years. One of the things I love about Procter & Gamble's business is the lifespan of customer acquisitions. If you use Tide in your laundry, think about how many years you have been purchasing Tide, the same thought could be asked about Crest, Dawn, Cascade, and many other products. Procter & Gamble's products are actual necessities, and many of their brands can be purchased throughout an individual's lifetime.

Proctor & Gamble has built a business that creates products that are essential throughout someone's entire life, so it's only fitting that they are a component to generate dividends throughout a lifetime. For the past 131 years, P&G has reward shareholders through annual dividends. P&G is not only part of the Century Club, but they are one of the prominent companies that have earned the status of being a Dividend King, having provided 65 consecutive annual dividend increases to date. Today P&G pays an annual dividend of $3.48 which is a forward yield of 2.41%. P&G has a payout ratio of 61.88% with a 5-year growth rate of 4.5% for its dividend.

(Source: Proctor & Gamble)

(Source: Proctor & Gamble)

Generating Dividends Throughout A Lifetime

When thinking about which companies can continue to pay dividends well into the future, you need to think about what will still be relevant and won't get displaced through evolution. Nobody has a crystal ball, but the chances of seeing the products and services from PG, ED, and KO displaced is low, in my opinion. I feel comfortable that these companies will still be dominant forces in society for the next 100 years, the same way they were over the past century. This is why I am putting them in my nephew's portfolio because I believe they will generate passive income throughout his lifetime.

The combination of PG, ED, and KO has 368 years of dividend payments and 171 years of consecutive annual dividend increases under their belt. Purchasing one share of each company would cost $275.98 and generate $8.26 in annual dividends for a yield of 3.17%. These may not be the highest-yielding companies dividend investors could seek out, but they are certainly of the highest quality. If your looking for companies that can stand the test of time and generate dividends for a lifetime, these century club members should be at the top of the list.

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