I’ve often read “dividends don’t lie” and I believe there is a great deal of truth to those words. Companies can either afford to reward shareholders or they can’t; the evidence of company stability can be measured in part by dividends paid over decades of time. For some companies, while capital appreciation can be tremendous, the trick for the average investor is to know how to find those gems early on in their business lifecycle, figure out when to buy them and in many cases at what price point to sell them for big gains. That’s very challenging work.
Although this is an extreme example, I look no further than Canada’s most recent media darling to fall from grace, non-dividend payer Research In Motion (RIM). In less than five years, this company went from its all-time high of about $150/share to under $7/share as last week. There’s a sad story here, for the company, for its employees and for investors (image courtesy of TMX).
I never bought RIM in part because it never paid a dividend. Actually to date in my investing career, I avoid tech stocks altogether. Maybe that’s too much tunnel vision…I’m sure many readers will find fault with my investing logic for avoiding technology stocks or any stocks that don’t pay a dividend, but that’s part of my investing plan and I’m sticking to it. To be more truthful, I’m simply not confident enough in my abilities to pick the next RIM, Google or next great tech stock. I prefer not to speculate or follow tips. For this reason I will always index part of my portfolio with products like XIU and VTI to ride equity market returns. This way, if I don’t understand an investment I never have to worry about it – I never buy it directly but can own it indirectly amongst hundreds or thousands of other companies. For the rest of my portfolio, I only buy established companies that have a proven track record of paying shareholders, or me.
For today’s post, I’ve listed three U.S. companies that have a long history of paying investors. In my opinion, these are moderately priced dividend-paying moguls under $30 worthy of more review.
GE traces its beginnings from Thomas Edison, who established the Edison Electric Light Company in 1878. Today, GE is a diversified infrastructure, finance and media company; involved in too many industries to list in this short blogpost; from the manufacturer of aircraft engines and power generation stations, to managing financial services, to producing medical imaging equipment, to providing television programming. GE operates in more than 100 countries.
- GE has paid a quarterly dividend for over 100 years and increased its dividend for 32 consecutive years from 1976 to 2007.
- GE dividend = $0.17 USD.
- GE yield = >3%.
- GE price = $19.87 USD as of July 20.
Sysco is the leading supplier for “meals-prepared-away-from-home” operations in North America. It has sales and service relationships with approximately 400,000 customers, supporting the foodservice industry in North America and around the world. Sysco operates from more than 180 locations throughout the United States, Canada and Ireland.
- SYY has paid a quarterly dividend for decades, and in November 2011 increased its dividend by almost 4%, marking the 43rd consecutive year SYY increased dividends.
- SYY dividend = $0.27 USD.
- SYY yield = >3.5%.
- SYY price = $28.87 as of July 20.
Leggett & Platt are leaders in the furniture and retail industries, leadership and expertise than spans more than 125 years. Leggett & Platt are diverse manufacturers with four product lines: residential furnishings (finished bedding, bed frames, bedding accessories and furniture); commercial fixtures and components (retail store fixtures); industrial materials (they own a steel rod mill that produces the steel used in their products); and specialized products (from vehicle seat supports to wireless charging systems).
- LEG has increased their dividend each year for the last 41 consecutive years (1971 – 2012), and for 49 of the last 50 years; dividends have doubled approximately every 5 years for the last 4 decades.
- LEG dividend = $0.28 USD.
- LEG yield = >5%.
- LEG price = $21.60 as of July 20.
If you’re going to own U.S. dividend-paying stocks for the long-haul, companies like these are certainly worthy of more research. What do you think of these companies? Do you own them in your portfolio?
Disclosure: Long GE:US and SYY:US.