Income investors value reliability and consistency, as well as high dividend yields. Some stocks provide a combination of these factors, such as the Dividend Champions — stocks that have raised their payouts for at least 25 years in a row.These companies have proven that they can manage through recessions, while continuing to pay dividends each year, and raise their dividends on an annual basis.These 3 Dividend Champions have long histories of dividend growth, market-beating yields, and the ability to raise their dividends each year going forward.
Dividend Champion: Stryker (SYK)
Stryker is a global leader in the medical device sector. The company’s product lines include surgical equipment, neurovascular products and orthopedic implants.The company has continued to generate growth in 2023, even in a difficult macro-economic environment. On November 2nd 2023, Stryker reported third quarter results for the period ending September 30th , 2023. For the quarter, revenue grew 9.6% to $4.91 billion, which $50 million more than expected. Adjusted earnings-per-share totaled $2.46, which compared favorably to $2.12 in the prior year and was $0.02 above estimates.Organic revenue was 9.2% for the quarter, driven by 8.9% volume growth and a 0.3% tailwind from higher realized prices. For the quarter, MedSurg and Neurotechnology had organic growth of 10.1% while Orthopaedics and Spine grew 8%. Results for both businesses were once again aided by high single-digit growth in volume. Prices were up 1.4% for MedSurg and Neurotechnology and lower by 1.1% for Orthopaedics and Spine.Stryker provided updated guidance for 2023 as well. The company now expects organic revenue growth of 10% to 10.5% for the yearStryker has increased its dividend at an average rate of almost 12% per year over the past 10 years. The company has now increased its dividend for 29 consecutive years. Shares currently yield 1.1%.
Dividend Champion: Fortis (FTS)
Fortis is Canada’s largest investor-owned utility business with operations in Canada, the United States, and the Caribbean. It is cross-listed in Toronto and New York. At the end of 2022, Fortis had 99% regulated assets: 82% regulated electric and 17% regulated gas. As well, 64% were in the U.S., 33% in Canada, and 3% in the Caribbean.Fortis reported Q3 2023 results on 10/27/23. For the quarter, it reported adjusted net earnings of CAD$411 million, up 20.5% versus Q3 2022, while adjusted earnings-per-share (EPS) rose 18.3%. The company noted that the increase reflected “the new cost of capital parameters approved for the FortisBC utilities in September 2023 retroactive to January 1 2023.” It also benefited from higher retail revenue in Arizona due to warmer weather and new customer rates at Tucson Electric Power, effective September 1, 2023, as well as rate base growth across its utilities.Because demand for Fortis’s utility services doesn’t change much in various economic environments, Fortis’s results have been quite resilient through economic uncertainties, including the one we’re experiencing in which inflation and interest rates are higher than recent history. Fortis’s liquidity position is strong, including C$3.8 billion of undrawn liquidity available from $5.9-billion credit facilities at the end of Q4 2022.Fortis’ payout ratio had been about 70% of earnings. Fortis’s liquidity position is strong, including CAD$4.0 billion of undrawn liquidity available from $6.0-billion credit facilities at the end of Q3 2023. The dividend is important to management, and we believe it is safe and should continue to rise for years to come. Fortis’ competitive advantage is its size and scale. In addition, Fortis is unique because of its cross-border exposure.FTS stock yields 4.2%.
Dividend Champion: Bank OZK (OZK)
Bank OZK, previously Bank of the Ozarks, is a regional bank that offers services such as checking, business banking, commercial loans and mortgages to its customers in Arkansas, Florida, North Carolina, Texas, Alabama, South Carolina, New York and California.On October 2nd, 2023, Bank OZK announced a $0.37 quarterly dividend, representing a 2.8% raise over the last quarter’s payment and a 12.1% raise year-over-year. This marks the company’s 53rd consecutive quarter of raising its dividend.In mid-October, Bank OZK reported (10/19/23) financial results for the third quarter of fiscal 2023. Total loans and deposits grew 30% and 25%, respectively, over last year’s quarter. Net interest income grew 3% sequentially, in sharp contrast to most banks, which incurred a decline in net interest income due to higher costs of deposits. Earnings-per[1]share grew 1% sequentially, from $1.47 to a new all-time high of $1.49, and exceeded the analysts’ consensus by $0.07. Bank OZK has exceeded the analysts’ consensus in 13 of the last 14 quarters.We believe that Bank OZK will remain on its growth trajectory. Factors like general economic growth, the interest rate hikes of the Fed, a low payout ratio and coming off a conservative base should help results. Non-interest income makes up just a small amount of the bank’s profits.Bank OZK has raised its dividend at a very strong pace over the last decade, with 27 consecutive years of dividend growth. OZK stock yields 4%.More By This Author:Dividend Aristocrats In Focus: Kenvue
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