Income investors value reliability and consistency, as well as high dividend yields. Some stocks provide a combination of these factors, such as the Dividend Champions — stocks that have raised their payouts for at least 25 years in a row.

These companies have proven that they can manage through recessions, while continuing to pay dividends each year, and raise their dividends on an annual basis.

These 3 Dividend Champions have long histories of dividend growth, market-beating yields, and the ability to raise their dividends each year going forward.

Emerson Electric (EMR)

Emerson Electric operates in the industrial sector as a diversified global leader in technology and engineering. Its global customer base and diverse product and service offerings afford it just over $17 billion in annual revenue. The company has increased its dividend for 67 consecutive years, making it a Dividend King.

Emerson posted fourth quarter earnings on November 7th, 2023. Adjusted earnings-per-share came to $1.29. Revenue was up 5% year-over-year to $4.09 billion, but missed expectations by $100 million. Profit was $744 million for the quarter, fractionally higher year-over-year.

The company initiated 2024 guidance at $5.15 to $5.35 in adjusted earnings-per-share. From there, we estimate EMR could grow its adjusted EPS by 6% per year in the next five years. There are signs of organic revenue growth improvement, as well as expanding profit margins. These catalysts plus an additional tailwind from share buybacks will be the key drivers of earnings-per-share growth in the coming years.

Emerson’s competitive advantage is in its many decades of experience in building customer relationships and engineering excellence. It has a global customer base that is seeing strong economic growth and that underlying sales tailwind should power results going forward.

Emerson’s payout ratio is under half of earnings, and we believe it will continue to remain under 50% for the foreseeable future. The dividend is very safe as it is well covered by free cash flow, and the yield is solid at 2.4%.

EMR stock trades for roughly 16x earnings, compared to our fair value estimate of 19x. As a result, EMR stock appears undervalued. Total returns could surpass 10% per year over the next five years.

Eversource Energy (ES)

Eversource Energy is a diversified holding company with subsidiaries that provide regulated electric, gas, and water distribution service in the Northeast U.S. The company's utilities serve more than 4 million customers after acquiring NStar's Massachusetts utilities in 2012, Aquarion in 2017, and Columbia Gas in 2020.

On November 6th, 2023, Eversource Energy released its third quarter 2023 results. For the quarter, the company reported revenue of $2.79 billion, a decrease of 13.2% compared to $3.22 billion in the same quarter of last year. Eversource reported earnings of $339.7 million and earnings-per-share of $0.97 compared with earnings of $349.4 million and earnings-per-share of $1.00 in the prior year.

Earnings from the Electric Transmission segment have increased by 2.8% to $160.3 million compared to the same quarter in the previous year. The improvement primarily resulted from a higher level of investment in Eversource’s electric transmission system.

The company has a long history of paying dividends and has increased its payout for 25 consecutive years. In February 2023, the quarterly dividend increased by 5.9%. ES stock currently yields 4.5%.

Colgate-Palmolive (CL)

Colgate-Palmolive has been in existence for more than 200 years, having been founded in 1806. It operates in many consumer staples markets, including Oral Care, Personal Care, Home Care, and more recently, Pet Nutrition. These segments afford the company just over $19 billion in annual revenue.

Colgate-Palmolive posted third quarter earnings on October 27th, 2023, and results were better than expected on both revenue and profits. Adjusted earnings-per-share came to 86 cents, which was six cents ahead of estimates. Revenue was $4.92 billion, which was 10.3% higher year-over-year. It also beat expectations by $100 million. Net sales were up 9% on an organic basis, with five out of the company’s six divisions posting gains, as well as all four of its product categories.

Gross margin came to 58.5% of revenue, up 130 basis points year-over-year. Gross margin was impacted negatively by higher private label sales, which was from the previously disclosed acquisitions of pet food businesses. Net cash provided by operations was $2.6 billion for the first nine months, which is 39% higher year-over-year.

Guidance for the year was raised as well, with net sales growth now expected to be +6% to +8%, including a minor negative impact from forex translation. Organic sales growth is now expected to be 7% to 8%, up from the previous 5% to 7%.

The company has increased its dividend for 61 consecutive years, and the stock currently yields 2.4%. Colgate-Palmolive’s dividend increase streak should remain intact for years to come as its payout is still reasonable, and earnings hold up well during recessions.

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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.