Dividend Kings are companies that have grown dividend payments for at least 50 consecutive years. Due to consistent dividend hikes, Dividend Kings typically deliver outsized gains to shareholders over time.
These companies have showcased an ability to generate cash flows across market cycles and help shareholders create a passive-income stream. Moreover, these companies enjoy durable competitive moats resulting in steady profits and cash flows year after year.
There are several Dividend Kings trading in the U.S. that Canadian investors can consider buying right now. The U.S. is the world’s largest economy and offers Canadians diversification, which lowers overall investment risk.
Here are three Dividend Kings every Canadian investor should own right now.
American States Water Company stock
Valued at US$3.2 billion by market cap, American States Water Company (NYSE: AWR) serves one million people in nine states. Its water utility subsidiary provides water service to 264,200 customer connections in California, while the electric utility distributes power to 248,000 customer connections. Finally, American States Water also owns a subsidiary that provides operations, maintenance, and construction management services for water distribution, wastewater collection, and treatment facilities located on 12 military bases under 50-year privatization contracts.
The company has paid shareholders a dividend every year since 1931, increasing the payouts every year for 70 consecutive years. American States Water pays shareholders an annual dividend of US$1.86 per share, translating to a forward yield of 2.2%.
Priced at 28 times forward earnings, the utility stock might seem expensive, given it is part of a mature industry. However, its regulated cash flows and a widening base of dividends make it a top income stock in 2024.
Dover stock
Valued at US$24 billion by market cap, Dover (NYSE: DOV) is a manufacturer and solutions provider that delivers equipment, consumable supplies, aftermarket parts, and support services.
In 2023, Dover almost doubled its free cash flow to US$1.1 billion, allowing it to increase its quarterly dividend payout from US$0.505 per share to US$0.51 per share. Its free cash flow is forecast to increase between 13% to 15% of revenue in 2024, which should support dividend hikes in the future.
Dover has raised dividends for 68 consecutive years and currently offers shareholders an annual yield of 1.2%. Priced at 19 times forward earnings, Dover stock is not too expensive and trades at a discount of 15% to consensus price target estimates.
Procter & Gamble stock
The final Dividend King on my list is Procter & Gamble (NYSE: PG), a consumer goods giant valued at a market cap of US$400 billion. It pays investors an annual dividend of US$4.03 per share, indicating a yield of 2.4%. PG stock has been under the pump in recent trading sessions after it missed revenue estimates in the June quarter.
Despite its massive size, Procter & Gamble continues to grow its market share in North America. In the recent quarter, volume in its home market rose 4% despite sluggish consumer spending and lower promotional costs. Alternatively, the company is struggling in China, its second-largest market, where organic sales declined by 9% year over year.
