Income investors seek reliable, not flashy.
Many investors in the market for dividend stocks first peruse a fairly short list of popular companies, thinking that these big-name corporations are inherently more stable than their peers. However, being an old favorite is no guarantee of future success, as General Electric Co. (ticker: GE) has shown in rather painful fashion. What dividend investors should look for instead is a long history of consistent dividend payments and steady dividend increases — even if the stock paying them isn’t as flashy or well known. Here are seven dividend stocks that may be overlooked.
Franklin Resources (BEN)
Franklin Resources is the company behind 70-year-old asset manager Franklin Templeton. Some investors may be familiar with its mutual funds, or know about its services to institutions via pension plans or trusts. However, many investors don’t think about BEN stock when it comes to holdings in their own portfolio. That’s a shame, because this $16 billion company has a decent dividend yield, and has increased its quarterly payments each year for 37 years, including a 15 percent increase to payouts in August. This asset manager may not be one of the biggest or best known, but its generous income potential is worth noting.
Current yield: 2.9 percent
Genuine Parts Co. (GPC)
The brand behind NAPA auto parts stores, GPC has robust operations that serve both the driving public as well as repair shops. Anyone who owns a car can attest to the fact that eventually you are going to need parts and maintenance — if only to replace brake pads or windshield wipers. There isn’t a ton of growth in this segment of the auto industry, but there is reliability. That has allowed Genuine Parts to increase its quarterly distributions every year dating back to 1956. That’s the kind of income potential income investors relish.
Current yield: 2.9 percent
Illinois Tool Works (ITW)
Another under-the-radar pick is ITW, an industrial play that manufactures and sells products worldwide that are used in testing, electronics, welding, construction and a host of other applications. While not a household name, Illinois Tool Works is more than 100 years old, worth over $40 billion in market value and boasts over 20,000 patents. These factors have helped the company establish a stable and entrenched distribution network across a variety of sectors, and fuel consistent revenue. Those sales in turn fuel consistent dividends, which have increased at least once a year for the last 44 years.
Current yield: 3.1 percent
Leggett & Platt (LEG)
Leggett & Platt is a fabrics and furniture company that has a host of varied but related product lines, from mattresses and bedding for the hospitality industry to office furniture to carpets, drapes and other residential textile products. Once again, just because you may not be familiar with this brand doesn’t mean that you should skip the potential of LEG stock as a stable and generous long-term dividend investment. With roughly four decades of consecutive dividend increases, Leggett & Platt has shown a commitment to sharing its long-term success with shareholders.
Current yield: 4 percent
Becton Dickinson and Co. (BDX)
With 46 years of consecutive dividend increases, medical device and technology company Becton Dickinson is one of the most consistent dividend stocks on Wall Street. Patients and consumers may not know its products, but BDX offerings include critical computer interfaces for doctor’s offices and hospitals that allow for laboratory testing and patient record-keeping, among other things. The yield admittedly isn’t as impressive as some of the other names on this list, but BDX has a bit more growth potential. That’s particularly true after its recent acquisition of C.R. Bard, a medical products giant that brings an additional $16 billion in potential revenue.
Current yield: 2 percent
Dover Corp. (DOV)
Another unsung stock that you may have run across but may not recognize as an attractive investment is Dover. This industrial manufacturer makes a bunch of different equipment, but chief among them are commercial food refrigeration units at your local grocery store, plus fluid storage and pumping technology that is likely used at a gas station near you. While not glamorous, this business provides a strong baseline of revenue and a strong foundation for consistent and growing dividends. DOV stock has increased payouts for more than 50 years.
Current yield: 2.4 percent
Nucor Corp. (NUE)
Earlier in 2018, steel icon Nucor marked an incredible 180 consecutive dividend payments, and in November marked its 46th consecutive annual increase to that payout. Commodity stocks like NUE can be cyclical, rising and falling based on demand trends, trade policies and broader steel pricing that may be beyond its control. But this kind of dividend consistency shows that Nucor is not your average industrial player. Investors can take comfort in this long-term reliability and generous dividend.
Current yield: 2.9 percent
Dividend stocks that may be overlooked.
To recap, here are seven dividend stocks that income investors may overlook:
— Franklin Resources (BEN)
— Genuine Parts Co. (GPC)
— Illinois Tool Works (ITW)
— Leggett & Platt (LEG)
— Becton Dickinson and Co. (BDX)
— Dover Corp. (DOV)
— Nucor Corp. (NUE)
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7 Worthy Dividend Stocks Investors May Overlook originally appeared on usnews.com
