When searching for high-quality dividend stocks, savvy investors often focus on companies with a long history of safely raising payouts. In particular, steady dividend increases signal strong financial health and consistent earnings performance, which can be especially reassuring during fluctuating economic climates.
Three notable companies recently highlighted for their impressive track records of dividend growth are Emerson Electric (NYSE: EMR), NextEra Energy (NYSE: NEE), and Clorox (NYSE: CLX). While these stocks may not boast the highest yields on the market, their commitment to rewarding investors through growing dividends makes them particularly appealing at present.
Emerson Electric: A Legacy of Growth
Emerson Electric has a storied history of increasing dividends, having done so annually since 1956 when stock splits are accounted for. This industrial giant is actively transforming its business model to focus more heavily on lucrative sectors such as automation, industrial software, and smart grid tech.
Management’s strategic decisions—including the divestiture of its climate technologies segment and the acquisition of key tech firms—position Emerson for robust growth. This evolution aligns with major trends like labor automation and the digitization of manufacturing, promising ongoing revenue growth of 4% to 7% even amidst economic fluctuations. As the market anticipates a rebound following a recent slowdown, Emerson’s future looks promising for dividend investors seeking stability and growth.
NextEra Energy: A Utility Powerhouse
NextEra Energy stands as a beacon for conservative investors, having achieved the remarkable milestone of increasing its dividends for an impressive 30 consecutive years. This utility firm combines consistent performance with a 2.5% forward yield—an attractive proposition for those looking to bolster their passive income.
Over the last two decades, the company has maintained an impressive 10% compound annual growth rate (CAGR) in dividends, backed by steadily growing earnings and cash flow. With a historically low payout ratio averaged at 60.2%, NextEra is well-equipped to sustain this trend. Investors can expect adjusted earnings per share to grow between $3.23 and $3.43 in 2024, and management targets a continued 10% CAGR for dividends through 2026. Currently trading at a favorable valuation, NextEra Energy is a prime candidate for income-focused portfolios.
Clorox: Resilience in Consumer Goods
Clorox, primarily recognized for its cleaning products, has recently regained momentum after a period of volatility. Having raised its dividend every year since 1986, Clorox’s current yield stands at a respectable 2.9%, surpassing the consumer staples sector’s average yield.
With recent stock price increases—24% within just three months—investors are optimistic about the company’s future. This resurgence is attributed to enhanced gross margins following earlier operational challenges. As the company predicts further margin improvements in the upcoming fiscal year, Clorox is likely to sustain its reputation as a reliable dividend payer while continuing its diverse portfolio strategy, which includes brands like Brita and Burt’s Bees.
Investment Considerations
Before diving into investments like Emerson Electric, it’s crucial to conduct thorough research and consider broader market trends. While the Motley Fool analyst team has recognized 10 top stocks, Emerson Electric remains a viable option for those seeking reliable dividend growth in solid sectors.
For all three companies—Emerson Electric, NextEra Energy, and Clorox—investors can find confidence in their sustained commitment to shareholder returns through dividends, even amid market challenges. These stocks not only offer historical resilience and solid payouts but are also strategically aligned with growth sectors poised for long-term success.
As the demand for reliable income-generating assets increases, investors should evaluate these companies carefully—especially given their long-standing commitment to increasing dividends. By focusing on stocks that demonstrate consistent performance and growth potential, you can build a robust investment portfolio that thrives over time.