FX.co ★ Three best US dividend kings for long-term total returns

Dividend kings are companies that annually increase the remuneration paid to their shareholders over the past 50 years. In the US, these are primarily such corporations as Johnson & Johnson, Coca-Cola and Procter and Gamble. Recently, however, the list has been replenished with shares of other, not less profitable, companies.

Aqua America

The American company, Aqua America, specializing in water supply, bought Peoples gas supplier from Pittsburgh (USA) at the end of 2018. This decision was fateful: by 2022, the production of gas in this region doubled. However, Aqua America shares fell 10 percent, while dividend yield soared to 2.6 percent, an unusual movement of quotes for a predictable and regulated business. Aqua America forecasts gas segment growth of 10 percent per year. The company got a lot of new opportunities, including other segments than the gas and water supply.

3М

The industrial conglomerate, 3M, is considered a best option for investors. It’s not easy to get into the list of dividend kings to which 3M belongs, but 2018 was the 60th year for increasing the dividends for the company. The five-year development plan for 2019–2023 includes an increase in earning by 8–11 percent per share, a growth of dividends following a rise in profits and the retention of the payout ratio at the level of 30 percent. Over the next five years, the remuneration will grow by a few percent annually. The current dividend yield of 3M is estimated at 2.7 percent with a tendency to increase.

Apple

Apple stands out among dividend kings. Currently, the dividend yield of its shares is small, only 1.4 percent, while investors should take into account that the payout ratio is only 24 percent. Apple management is able to develop business and find new sources of income. In the 2018 fiscal year, sales in the services segment brought the company about $37.3 billion, an increase of a record 24 percent. Apple shows steady growth in revenue and profits. In the fourth quarter of 2018, revenue rose by 20 percent to $62.9 billion, and earnings per share increased by 41 percent to $2.91.