NEW YORK (TheStreet) -- There is a select group of stocks that have increased their dividend payments each and every year for 50 years in a row. For a business to adapt and grow its dividend each year for 50 years, it must have a strong competitive advantage and great management. These ultra-high quality businesses are called "Dividend Kings" and there only 16 of them.
You may already know that stocks with long dividend histories have historically outperformed the market. The Dividend Aristocrats Index, which is comprised of businesses with 25 or more years of consecutive dividend payments, has outperformed the market by 2.88% a year over the last decade, according to S&P. Finding businesses with 25 or more years of dividend payments without a reduction is the first rule in dividend investing. Investing in high quality companies with long dividend histories does more than give you investing peace of mind; it has historically led to outperformance.
Several of the Dividend Kings are businesses with strong franchises that are well-known to people around the world. The Dividend Kings list counts well-known companies like Coca-Cola (KO) , Johnson & Johnson (JNJ) , and Colgate-Palmolive (CL) among its ranks. Keep reading to see the only 16 companies in the U.S. stock market that have paid increasing dividends for 50 consecutive years.
Coca-Cola has increased its dividend payments for 54 consecutive years. The company currently trades at a price-to-earnings ratio of 23.4 and has a dividend yield of 2.90%. The company's relatively high dividend yield and virtual guarantee of increasing dividends in the future should appeal to investors looking for rising income.
Coca-Cola controls 17 brands that sell over $1 billion each annually. These brands include: Sprite, Fanta, Minute Maid, Dasani, and Simply juices. Coca-Cola has become the global market leader in both carbonated and non-carbonated (and here you thought Coca-Cola was just soda) non-alcoholic beverages through its excellence in advertising. The company spent over $3 billion dollars on advertising in its last full fiscal year. That buys a lot of brand recognition.
Coca-Cola still has a long growth runway ahead. The company has managed to grow its dividends at about 9.33% a year over the last decade. Future growth will be driven by the company's continued leadership in juice. Coca-Cola has captured an amazing 33% of global juice growth since 2007. The company will also benefit from further expansion into emerging markets. Additionally, Coca-Cola has partnered with both Monster Beverage (MNST) and Green Mountain Coffee Roasters (GMCR) to align itself with current trends in the beverage business.
There are no signs that the company will not be able to continue growing its dividend payments.