10 Dividend Stocks That Keep Paying You More and More and More

NEW YORK (TheStreet) -- Not all dividend stocks are created equal. Some are more of a sure thing than others.

There is perhaps no surer income bet than the dividend aristocrats. These companies, which have paid and increased dividends every year for more than 25 years, are sort of the creme de la creme in dividend investing.

It seems like anything is possible in the current market environment, and it may be time to go shopping for safe dividend picks. Here are 10 S&P 500 stocks with a yield of 3% or higher that aren't likely to let you down with their quarterly payouts.

HCP


According to its Web site, HCP  (HCP) was the first health care real estate investment trust selected to the S&P 500 and the only REIT included in the S&P 500 Dividend Aristocrats index. Its dividend yield is 6.00%.

HCP's portfolio stretches across various segments within health care, including senior living, life sciences and hospitals. On Monday, Jeffries Group restated its hold rating on the stock and $40 price target. The company paid its most recent cash dividend of 56.5 cents on May 26.

TheStreet Ratings team rates HCP as a hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation: 

"We rate HCP (HCP) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings team include:

  • HCP's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for HCP INC is rather high; currently it is at 56.55%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of -38.53% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 192.9% when compared to the same quarter one year ago, falling from $259.11 million to -$240.61 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HCP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
You can view the full analysis from the report here: HCP Ratings Report

AT&T


AT&T's (T) dividend isn't what has had investors talking lately. Instead, many have been looking at its impending acquisition of satellite television company DirecTV (DTV). Announced in May 2014, the deal appears to be on track to receive approval from the FCC.

However, its dividend is worth noting as well, with a yield of 5.4%. AT&T made its last quarterly payment of 47 cents on May 1 and last increased its payout by one cent in late 2014.

TheStreet Ratings team rates AT&T INC as a buy with a ratings score of B+. TheStreet Ratings Team has this to say about its recommendation:

"We rate AT&T (T) a buy. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings team include:

  • T's revenue growth has slightly outpaced the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 0.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for AT&T INC is rather high; currently it is at 55.24%. Regardless of T's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.82% trails the industry average.
  • AT&T INC's earnings per share declined by 12.9% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, AT&T INC reported lower earnings of $1.19 versus $3.41 in the prior year. This year, the market expects an improvement in earnings ($2.53 versus $1.19).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Diversified Telecommunication Services industry average. The net income has decreased by 12.4% when compared to the same quarter one year ago, dropping from $3,652.00 million to $3,200.00 million.
  • Even though the current debt-to-equity ratio is 1.12, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.

You can view the full analysis from the report here: T Ratings Report

Con Edison


Con Edison (ED) has managed to increase its dividend each year across more than four decades. With a dividend yield of 4.5%, the company is set to make its next 65-cent payment on June 15.

Con Edison is a major supplier of energy related products and services in New York, New Jersey and Pennsylvania, but its activities aren't limited to the East Coast. In May, one of its business units acquired six solar projects in California.

TheStreet Ratings team rates Consolidated Edison as a buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:

"We rate Consolidated Edison (ED) a buy. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings team includes:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Multi-Utilities industry average. The net income increased by 2.5% when compared to the same quarter one year prior, going from $361.00 million to $370.00 million.
  • Net operating cash flow has significantly increased by 149.55% to $559.00 million when compared to the same quarter last year. In addition, CONSOLIDATED EDISON INC has also vastly surpassed the industry average cash flow growth rate of 38.77%.
  • CONSOLIDATED EDISON INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CONSOLIDATED EDISON INC increased its bottom line by earning $3.71 versus $3.61 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $3.71).

You can view the full analysis from the report here: ED Ratings Report

Chevron


Back in 1990, Chevron (CVX) paid a quarterly dividend of $0.35. It has since more than tripled its payout to $1.07, giving it a yield of 4.2%.

Falling oil prices have hurt the energy giant, which in May 1 posted a 43% drop in its first-quarter profit from the year before. However, Chevron has proven agile in its financial maneuvers in 2015. In March, it announced plans to increase asset sales by 50% to $15 billion and limit new investments through 2017.

TheStreet Ratings team rates Chevron as a hold with a ratings score of C. TheStreet Ratings team has this to say about its recommendation:

"We rate Chevron (CVX) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings team include:

  • CVX's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.5%. Since the same quarter one year prior, revenues fell by 37.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 43.1% when compared to the same quarter one year ago, falling from $4,512.00 million to $2,567.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CHEVRON CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

You can view the full analysis from the report here: CVX Ratings Report

Cincinnati Financial


Cincinnati Financial  (CINF) offers property, casualty and life insurance through three subsidiaries across five segments. With a dividend yield of 3.6%, it will make its next 46-cent quarterly payment on July 15.

The company didn't exactly hit a home run with its first-quarter earnings announcement in April. It reported earnings of 59 cents per share for the period -- an increase from the year before, but below analysts' expectations of 68 cents. It coupled its financial results with news that it plans to expand assumed reinsurance operations, a "relatively small line of business" for the company since the 1990s.

TheStreet Ratings team rates Cincinnati Financial as a buy with a ratings score of A-. TheStreet Ratings Team has this to say about its recommendation:

"We rate Cincinnati Financial (CINF) a buy. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, good cash flow from operations and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings team includes:

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CINF's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 40.6% when compared to the same quarter one year prior, rising from $91.00 million to $128.00 million.
  • Net operating cash flow has significantly increased by 66.66% to $215.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.44%.
  • CINCINNATI FINANCIAL CORP has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CINCINNATI FINANCIAL CORP increased its bottom line by earning $3.19 versus $3.13 in the prior year. For the next year, the market is expecting a contraction of 24.8% in earnings ($2.40 versus $3.19).

You can view the full analysis from the report here: CINF Ratings Report

McDonald's

In 1976, McDonald's (MCD) was paying a quarterly dividend of 2.5 cents. Today, the fast food giant's dividend is 85 cents, giving it a 3.6% yield.

McDonald's hasn't had the easiest of goes business-wise in recent months. It missed analysts' estimates for its financials during the first quarter of the year by a wide margin, reporting 84 cents in earnings per share as opposed to the anticipated $1.06. And on Monday, it said same store sales in the U.S. fell 2.2% in May. However, a turnaround could be on the horizon. On Tuesday, McDonald's announced it had hired Robert Gibbs, ex-press secretary under President Barack Obama, as global chief communications officer.

TheStreet Ratings team rates McDonald's as a buy with a ratings score of B. TheStreet Ratings team has this to say about its recommendation:

"We rate McDonald's (MCD) a buy. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings team include:

  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MCDONALD'S CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 43.42% is the gross profit margin for MCDONALD'S CORP which we consider to be strong. Regardless of MCD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MCD's net profit margin of 13.61% compares favorably to the industry average.
  • MCD, with its decline in revenue, slightly underperformed the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 11.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of MCDONALD'S CORP has not done very well: it is down 5.99% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • Net operating cash flow has decreased to $1,699.50 million or 10.89% when compared to the same quarter last year. Despite a decrease in cash flow of 10.89%, MCDONALD'S CORP is in line with the industry average cash flow growth rate of -11.64%.
You can view the full analysis from the report here: MCD Ratings Report

Exxon Mobil

Exxon Mobil (XOM) has been distributing dividends since 1911. It announced plans to increase its payout at the start of the year and on June 10 distributed 73 cents per share. Its dividend yield is 3.4%.

Like Chevron, Exxon has been hurt by falling oil prices. It reported a 46% decline in earnings for the first quarter, and its revenue fell 36%. "Regardless of current market conditions, we remain focused on business fundamentals and competitive advantages that create long-term shareholder value," said company CEO Rex Tillerson in a statement. This week, analysts at Bank of America/Merrill Lynch raised their price target on the stock from $103 to $106.

TheStreet Ratings team rates Exxon Mobil as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about its recommendation:

"We rate Exxon Mobil (XOM) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings team include:

  • XOM's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that XOM's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.5%. Since the same quarter one year prior, revenues fell by 36.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for EXXON MOBIL CORP is rather low; currently it is at 18.89%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 8.34% is above that of the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 45.7% when compared to the same quarter one year ago, falling from $9,100.00 million to $4,940.00 million.

You can view the full analysis from the report here: XOM Ratings Report

Procter & Gamble

 

Procter & Gamble (PG) has been on the up-and-up lately thanks to reports that it has received bids from Coty (COTY) and Henkel to buy parts of its beauty businesses. The former has submitted bits for its fragrance unit and cosmetics business, and the latter is after its hair care assets. Combined, P&G's beauty units are worth up to $12 billion.

The company is on a mission to shed non-core business assets and last year sold its Duracell battery brand to Berkshire Hathaway (BRK.A) (BRK.B). It has a 3.3% dividend yield and distributed its most recent payment of 66.29 cents on May 15.

TheStreet Ratings team rates Procter & Gamble as a buy with a ratings score of B. TheStreet Ratings team has this to say about its recommendation:

"We rate Procter & Gamble (PG) a buy. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings team include:

  • The gross profit margin for PROCTER & GAMBLE CO is rather high; currently it is at 53.92%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.86% is above that of the industry average.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PG's debt-to-equity ratio is low, the quick ratio, which is currently 0.57, displays a potential problem in covering short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Products industry and the overall market on the basis of return on equity, PROCTER & GAMBLE CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • PROCTER & GAMBLE CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, PROCTER & GAMBLE CO's EPS of $3.87 remained unchanged from the prior years' EPS of $3.87. This year, the market expects an improvement in earnings ($3.97 versus $3.87).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 7.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
You can view the full analysis from the report here: PG Ratings Report

Kimberly-Clark

 

Kimberly-Clark (KMB) has a 3.3% dividend yield. It increased its payout in late 2014 and will make its next distribution of 88 cents on July 2.

Kimberly-Clark has managed to post solid numbers abroad despite the strong dollar. In the first quarter of the year, its sales in developing markets increased 11%, though its revenue was hindered. The stock got a boost in mid-May when Barclays analysts upgraded their rating on it from equal weight to overweight.

TheStreet Ratings team rates Kimberly-Clark as a Hold with a ratings score of C+. TheStreet Ratings team has this to say about its recommendation:

"We rateKimberly-Clark (KMB) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and relatively poor performance when compared with the S&P 500 during the past year."

Highlights from the analysis by TheStreet Ratings team includes:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Products industry and the overall market, KIMBERLY-CLARK CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 39.78% is the gross profit margin for KIMBERLY-CLARK CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.97% trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly decreased to $20.00 million or 95.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 40.06 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash needs.

You can view the full analysis from the report here: KMB Ratings Report

Coca-Cola


Coca-Cola (KO) has paid a quarterly dividend since 1920 and has increased its cash distribution each of the last 50 years. Its dividend yield is 3.3%, and it will make its next payment of 33 cents per share on July 1.

In its first-quarter earnings release, the beverage company called 2015 a "transition year" and acknowledged that "the benefits from announced initiatives will take time to fully materialize amidst an uncertain and volatile macroeconomic environment." Despite headwinds, many on Wall Street remain bullish on the stock, including BMO Capital analysts, who recently upgraded their rating on the stock to outperform.

TheStreet Ratings team rates Coca-Cola as a buy with a ratings score of B+. TheStreet Ratings team has this to say about its recommendation:

"We rate Coca-Cola (KO) a buy. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings team include:

  • KO's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $1,574.00 million or 47.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.47%.
  • The gross profit margin for COCA-COLA CO is rather high; currently it is at 66.11%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.53% trails the industry average.
  • COCA-COLA CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, COCA-COLA CO reported lower earnings of $1.59 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.59).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
You can view the full analysis from the report here: KO Ratings Report

This article is commentary by an independent contributor. At the time of publication, the author was long Exxon.

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