You know, when it comes to retirement, you want to make sure your dividends are paid regularly, year after year. It’s more predictable this way.

And what’s more important is this — Buying stocks which pay you growing dividends helps you generate a higher income in today’s low interest-rate environment. And it helps you face one of the biggest dangers in retirement.

And believe it or not, there’re stocks which have safely rewarded shareholders for over 100 years. These are well-known companies. And I’m very sure you’d bought some of their products before.

Here are 5 good stocks which have paid dividends for over a century. And their stocks continue to appreciate in price too. 

Procter & Gamble 

Dividends Paid Since 1891

Ticker: (NYSE: PG)

Share Price: $136

Market Cap: $341 billion

Dividend Yield: 2.30%

This is one “boring” business, and Covid-19 is, in my opinion, giving this company a boost. 

Procter & Gamble dominates the global consumer-products market. Whether you’ve bought their products or not, I’m sure you’ve come across its products under their umbrella of brands. 

Today, Procter & Gamble sells to more than 180 countries globally. Some of its well-known brands include Gain, Tide, Febreze, Pampers, Oral-B, Gillette, Braun, Pantene, Head & Shoulders. These are your “daily essentials”. And you’d know they’ll always be in demand, pandemic or not. You’d think, these “stuff” is boring. But you see, people need to buy them.

And their financials show it. Procter & Gamble’s annual sales were up 5% to $71 billion as of Jun 2020. And it generates a stable, solid free cash flow (FCF) of around $11 billion over the past 10 years. Its FCF stood at 15% total sales in its latest financial year. 

This allows Procter & Gamble to reward its shareholders well. In fact, it paid dividends every year since 1891, and its pay-out continues to grow. 

If we look closer, Procter & Gamble has raised dividends every year for the past 63 years. 

And it’s not stopping there. It generates so much cash, it still has enough to buy back its own shares. Since 2014, it has reduced its total shares outstanding by 9%. 

With basic items still the staple in every household, Procter & Gamble’s products are the kind of stuff people want right now. 

Colgate-Palmolive

Dividends Paid Since 1895

Ticker: (NYSE: CL)

Share Price: $76

Market Cap: $65.7 billion

Dividend Yield: 2.29%

This is one other consumer product giant. 

Colgate-Palmolive is a consumer product company with its products sold globally. Of course, it doesn’t sell toothpaste only. It focuses on both oral and personal care — deodorants, home care products, shampoo and shower soap. These products are made and sold in over 200 countries worldwide. And going global is something we like about these consumer giants. Colgate’s global sales, outside the US, is around 70% of its total sales. 

Of course, while Colgate is an established company, there are many other branded competitors looking to take a slice off the “daily essential” market. But so far Colgate has a resilient business model due to its reputable brands. 

Over the past 5 years, it generated sales of around $15 billion to $16 billion. Returns on invested capital (ROIC) have averaged around 30% over the past 10 years. Over the same period, Colgate generated a stable free cash flow of around $2.5 billion. Its strong financial numbers are credited to its needed daily personal care products. 

Even though the company is smaller than Procter & Gamble, Colgate has been paying out dividends since 1895. In fact, this dividend payer has raised its dividends consecutively for more than 55 years. 

Church & Dwight 

Dividends Paid Since 1901

Ticker: (NYSE: CHD)

Share Price: $87

Market Cap: $21.5 billion

Dividend Yield: 1.09%

Church & Dwight started in 1846, selling its “Arm & Hammer” baking soda. Today, its famous baking soda is a market leader. Of course, the Church doesn’t only make baking soda. Its product portfolio has expanded across laundry products, oral care and nasal care. All sold under its Arm & Hammer brand. It’s a local business, with 85% of its sales coming from the US. 

Demand for its 12 “power brands” products during the pandemic is still solid, despite strong competition within the consumer industry. Total sales grew from $2.6 billion to $4.3 billion between 2010 and 2019. 

Its free cash flow doubled over the same period, which allowed it to reward its shareholders handsomely. Dividends have been increasing year after year over the same period. 

What’s more impressive is this – It too, sustained its dividends since 1901, which makes it a rock, solid dividend payer. Its return on invested capital (ROIC) averaged around 11%, despite competing in a fierce consumer products industry. This is probably because it spends a higher percentage on marketing, which is around 12% on average. And this is higher than its peers of 10%. This allowed the Church to deepen its “economic moat”, and gave it a strong branding.

One concern we have is its focus in the US market. This is unlike other consumer giants like Procter & Gamble, Colgate-Palmolive where both consumer companies reach out to the world. Church & Dwight has little international presence. 

But so far, its growth has been impressive.

Chubb Corporation

Dividends Paid Since 1902

Ticker: (NYSE: CB)

Share Price: $132

Market Cap: $60 billion

Dividend Yield: 2.45%

In 2016, ACE Limited bought Chubb for $28 billion, making it the largest insurance deal in history valued at $28 billion. Chubb Corporation, as it’s now called, is a well-run P&C insurer. You see, the P&C insurance business was responsible for making Warren Buffett a billionaire. It’s also what Berkshire Hathaway first bought – insurance businesses.

Of course, the insurance industry is fiercely competitive. But it’s also one of the best businesses in the world. And to be honest, if you’d invest only in insurance stocks, it’d greatly increased your average returns. 

Anyway, Chubb’s business is focused on commercial lines. This is selling policies to companies. For example, car insurance for companies’ vehicles, workers’ compensation insurance, medical malpractice insurance to name a few. 

Even though selling insurance policies are essentially commodities, what differentiated Chubb was its ability to walk away when the insurance market becomes very hard to make a profit. What this means is, Chubb will only sell policies if it knows it can collect more premiums than it potentially pays out its claims. And you can see, over the past 10 years, for every $1 Chubb collects as a premium, it only needs to pay out $0.91 for claims and operating costs. This makes its combined ratio of 91% on average. And makes Chubb a highly profitable insurance player. 

Chubb has paid dividends since 1902. Over the last 3 years, Chubb has paid out $4 billion of dividend to its shareholders. And it also bought back $3.3 billion of its own shares. Even during the Covid-19 pandemic, it continued to raise its dividends. 

P&C insurance is prone to natural disasters and weather-related losses, but so far Chubb has proved to be disciplined in their underwriting. A positive for shareholders. 

Coca-Cola

Dividends Paid Since 1901

Ticker: (NYSE: KO)

Share Price: $48

Market Cap: $206 billion

Dividend Yield: 3.42%

This company probably needs no introduction. 

Coca-Cola is the world’s biggest beverage company in the world. It sells its famous red, canned soft drinks. And based on volume, Coca-Cola dominates 44% of the $314 billion global canned drinks market. Pep-Co holds the next 19%.

In 2019, Forbes put Coca-Cola’s brand to be worth close to $60 billion, the 6th most valuable brand in the world.

Of course, it doesn’t just sell its Coca-Cola drinks. The company also sells Sprite, Diet Coke, Minute Maid and Vitaminwater. And that’s not all. It has 21 brands each worth more than a billion-dollar. And these brands have a huge customer following. 

The key to selling its products in this – Fierce marketing and licensing its brands. Coca-Cola sells its syrups to its network of bottling partners. Its partners help manage production, distribution and local marketing. You can say it’s globally the biggest drink distribution system. 

And this makes Coca-Cola a very capital-efficient business. Since it doesn’t need to spend money on building factories for bottling. This helps Coca-Cola to generate its solid annual free cash flow (FCF) — $5.4 billion 2017, $6.3 billion in 2018 and $8.4 billion in 2019. With this, it rewards shareholders very well, especially Warren Buffett

With its moderate pay-out ratio, Coca-Cola has paid dividends since 1893.  It also makes it one of the market’s Dividend Aristocrats.

Conclusion

So, there you have it. There you have it — 5 good stocks which have paid dividends for over a century. Sometimes, looking into some of these stocks help to give you a more predictable income for your retirement portfolio

Investing can be easy.

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