These 3 High Yield Stocks Have Increased Their Dividends for 50 Years

The Dividend Kings are a group of just 56 stocks that have all increased their dividends for at least 50 consecutive years. That level of dividend longevity makes these stocks highly appealing for dividend growth investors.

The Dividend Kings are also appealing for retirees because of their ability to withstand recessions. Only companies that can continue to raise their dividends through even the worst recessions make to become Dividend Kings.

Below, we discuss three Dividend Kings that have high yields and should continue raising their dividends each year.

A Newly Crowned King

Telephone and Data Systems TDS is a telecommunications company that provides customers with cellular and landline services, wireless products, cable, broadband, and voice services across the United States. The company’s Cellular Division accounts for approximately 75% of total operating revenue.

TDS declared a 2.7% dividend increase to $0.19 quarterly on February 16, marking its 50th annual increase.

On February 16, TDS reported financial results for the fourth quarter of 2023. The company’s total operating revenues were $1.31 billion, lower by 3% compared to the same period one year ago, but beating analysts’ estimates by $40 million. In the fourth quarter, TDS took a $547 million goodwill impairment charge.

Excluding this goodwill impairment, net income was ($12) million, an improvement compared to last year’s ($43) million. Diluted earnings per share of ($0.11) also compared favorably to the ($0.38) earned one year ago. Postpaid ARPU of $51.61 was a 2% year-over-year increase. Total broadband connections increased 5.8% year over year to 539,800 connections and residential revenue per connection grew 4.7% to $62.74.

TDS has an 83% stake in U.S. Cellular and essentially relies on this stake to achieve growth. U.S. Cellular is focused on connecting customers in underserved areas with its high-quality network, as well as market share expansion, increasing business with government customers in 5G and IoT, and improving network modernization and 5G programs.

TDS has made investments towards growing its client base, expanding into new territories, as well as improving its network technologies, in an effort to boost the company’s competitiveness. In 2023, it delivered 217K new marketable fiber service addresses, which beat its initial 2023 estimate by 24%. The company has so far achieved 799K fiber service addresses and has a goal of achieving 1.2 million by 2026.

TDS has raised its dividend for 50 consecutive years, and shares currently yields 4.8%.

A Dividend Track Record Virtually Second to None

3M Co. MMM is a global manufacturer that sells more than 60,000 products in more than 200 countries. 3M operates three businesses: Safety & Industrial, Transportation & Electronics, and Consumer. 3M recently spun off its healthcare segment, which now trades independently as Solventum SOLV.

On January 23, 3M announced fourth-quarter and full-year earnings results. For the quarter, revenue decreased 0.3% to $7.69 billion, which missed estimates by $30 million. Adjusted earnings per share of $2.42 increased by 6.1% year over year. For 2023, revenue was lower by 4.5% to $32.7 billion while adjusted EPS of $9.24 compared to $10.10 in the prior year. However, comparable adjusted EPS totaled $9.88 in 2023.

3M provided an outlook for 2024 as well, with the company expecting adjusted EPS in a range of $9.35 to $9.75 for the year. Organic sales growth is projected to be flat to up 2%.

3M’s steady earnings growth should allow it to continue increasing its dividend. The company has increased its dividend for 65 consecutive years. 3M is not recession proof, but has proven itself to be resilient during the difficult times in the economic cycle. While dividend growth has outpaced earnings growth in recent years, 3M’s dividend track record is virtually second to none.

When the next recession occurs, it is likely that growth will slow, though we do not think the dividend is in any danger of being cut. The 2024 dividend payout ratio of 63% indicates a secure dividend payout, with room for future increases.

MMM stock currently yields 6.7%.

A King With 'Universal' Appeal

Universal Corp. UVV is the world’s largest leaf tobacco exporter and importer. The company is the wholesale purchaser and processor of tobacco that operates between farms and the companies that manufacture cigarettes, pipe tobacco, and cigars. Universal was founded in 1886 and is headquartered in Richmond, Virginia. With 53 years of dividend increases, Universal is a Dividend King.

Universal reported its fiscal third-quarter earnings results in February. The company generated revenues of $820 million during the quarter, which was up 3% from the previous year’s period. Revenues were positively impacted by product mix changes. Adjusted EPS totaled $2.12 during the quarter due to revenue growth and margin expansion. The current full-year consensus estimate for Universal’s EPS is around 40% higher than 2023.

As the leader in a declining industry, we do not expect the company to deliver strong business growth in the future. Still, future EPS growth is possible thanks to cost reductions and share buybacks. Universal also does not need to invest large amounts of money into its business, as the industry is not experiencing any meaningful growth. This gives Universal the ability to utilize a substantial amount of its free cash flows for share repurchases.

UVV has a 2024 dividend payout ratio of approximately 60%, which indicates a secure payout. The company has the flexibility to continue raising its dividend each year going forward. 

UVV shares currently yield 6.4%.

At the time of publication, Ciura had no positions in any stock mentioned.