Dividends are one of the main ways companies pay back investors, and it’s one of the best ways to generate a solid return. Steady dividends display consistency in operations and are an incentive for management to make prudent decisions with excess cash.
What many investors don’t realize is that dividends are often the largest portion of a stock’s return, even more than stock price appreciation. In the chart below you can see that 3M Co (NYSE:MMM)‘s stock has gone up by 995% since the early 1970s, but the total return, including dividends, is more than double that because of a steady dividend that grows year after year.
So, what are the best dividends on the market, dividends you can count on for generations to come? Here are my top five steady dividend stocks.
3M Co (NYSE:MMM)
If you’re looking for a steady dividend, the first place to go is 3M Co (NYSE:MMM), one of the most diverse companies in the world. 3M Co (NYSE:MMM) has paid a dividend for 386 consecutive quarters and increased its annual dividend for 55 straight years, an incredible run.
There’s no reason to think that 3M Co (NYSE:MMM)’s consistency will lead to anything but a growing dividend for many years to come. The company is in consumer markets, industrial goods, energy, and just about every business you can imagine. A 2.3% dividend yield isn’t the best you can find on the market today, but with the company’s history of steady dividends, it’s a good one for the long term.
The Procter & Gamble Company (NYSE:PG)
Think about five products you couldn’t live without. It’s likely that The Procter & Gamble Company (NYSE:PG)‘s products would be among your list of items, maybe more than once. The Procter & Gamble Company (NYSE:PG) makes everything from toilet paper to heartburn medicine to feminine hygiene products to toothpaste, and that makes for one stable company for investors.
The company has now paid a dividend in 123 consecutive years, and for 57 straight years it has increased that dividend. Unless we suddenly lose the need to clean ourselves or our homes, I think The Procter & Gamble Company (NYSE:PG) will pay a dividend for another century as well.
The Coca-Cola Company (NYSE:KO)
When soft drinks began to grow in popularity, it was The Coca-Cola Company (NYSE:KO)‘s brand that dominated the industry. Today, its global reach and ability to adapt to new trends make it about as steady a company as can be. As consumers have transitioned from sugary drinks to water, juices, and energy drinks, the company has been there every step of the way.