The 10 Best Dividend Stocks of All Time

Discussions regarding the best dividend stocks of all time often start with the Dividend Aristocrats. They are S&P 500 companies that have increased their annual dividend payment for at least 25 consecutive years. There are currently 65 names on this prestigious list.

While there is no question the 65 Dividend Aristocrats have staying power, that doesn’t necessarily mean they all qualify for the best dividend stocks of all time. I think it’s not just about increasing the annual dividend payment but also about delivering market-beating total returns.

So, for this article, I am interested in companies in the index that demonstrate shareholder-friendly capital allocation by delivering both hefty dividends and share repurchases.

To make the cut, the companies on this list must have a 10-year annualized total return that’s greater than the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and paid out $100 million in dividends and share repurchases in the latest fiscal year.

The bigger, the better.

Best Dividend Stocks of All Time: S&P Global (SPGI)

S&P Global (NYSE:SPGI) has increased its annual dividend for 49 consecutive years.

When it increases its quarterly payment in 2023, it will move from the exclusive Dividend Aristocrats club to the ever more exclusive Dividend Kings, those exceptional companies that have increased their dividends for 50 or more consecutive years.

Its 10-year annualized total return is 21.91% through Dec. 1, 869 basis points higher than the SPY. It currently yields 1.1%.

S&P Global has been one of my favorite stocks to recommend in recent years.

I included SPGI in a list of stocks to buy for the next 15 years in October 2021. It used to be called McGraw-Hill until the company sold off its McGraw-Hill Education subsidiary in November 2012 and subsequently changed its name to S&P Global.

It’s been uphill ever since.

On Dec. 1, the company held its annual Investor Day presentation in New York. It introduced medium-term targets to be achieved by 2025-2026, including organic revenue growth, adjusted operating margins between 48% and 50%, and adjusted earnings per share (EPS) growth of at least the low teens.

When most people think of S&P Global, they probably think of its Ratings business — the segment’s revenues decreased 33% in the third quarter — or they think of Indices such as the S&P 500. It had a good quarter, with sales up 12% year-over-year.

Thanks to its merger with IHS Markit, revenues in Q3 2022 increased 37% to $2.86 billion. On a pro forma basis, they fell 8%. Adjusted net income fell 11% to $968 million.

You can be sure before too long; it will do something about IHS Markit’s lower margins.

UnitedHealth Group (UNH)

UnitedHealth Group (NYSE:UNH) reported Q3 results in mid-October that were more than adequate. Revenues were $80.9 billion, 12% higher than in Q3 2021. Its earnings from operations were 32% higher year-over-year to $7.5 billion.

The health insurer’s stock’s up more than 7% YTD and 21% over the past year. Its 10-year annualized total return is 26.47%, double SPY.

From a cash flow standpoint, it’s hard not to like that it converted each dollar of net income during the quarter into $1.60 in cash flows from operations. Its free cash flow in the trailing 12 months ended Sept. 30 was $31.3 billion, more than plenty to pay out $10.45 billion in dividends and share repurchases during the third quarter.

One of UnitedHealth’s key metrics is the medical care ratio (MCR). It is the number of premiums paid out to cover its members’ medical costs. Lower is better. Analysts were expecting an MCR of 82.4%. It delivered an MCR that was 80 basis points lower.

Based on its current market capitalization of $503.9 billion, UnitedHealth’s free cash flow yield is 6.2%. I consider anything between 4% and 8% to be fair value. It’s getting closer to value territory, which is 8.0% or higher.

Best Dividend Stocks of All Time: McDonald’s (MCD)

McDonald’s (NYSE:MCD) should change its slogan, “You deserve a break today,” to Just Do It. Yes, I know, that’s Nike’s (NYSE:NKE) mantra.

As long as I’ve followed the Golden Arches, the one thing that I’ve found about its stock is that it always seems to deliver when people least expect it to.

A good example is 2022. It’s up nearly 2% on the year at a time when most large ($2 billion market cap or greater) restaurant stocks are getting hammered. Out of 16 stocks, just five are in positive territory YTD. The Golden Arches is one of them.

In fact, on Nov. 10, MCD stock hit an all-time high of $281.67.

Cowen analyst Andrew Charles raised his target price by $13 to $293 in late October, suggesting that the company’s ongoing domination of the U.S. market will continue to drive an above-average performance.

In these inflationary times, we in the media often talk about pricing power. McDonald’s has it. It raised prices by 10% on average compared to last year. During its Q3 2022 conference call, CFO Ian Borden said it was gaining market share of the low-income consumer because it still provides perceived value and affordability.

Oh, and about that U.S. performance. In the third quarter, its U.S. same-store sales grew more than 6%, its ninth consecutive quarter of growth. Internationally, they were even better, resulting in global same-store sales growth of nearly 10%.

In the nine months that ended Sept. 30, it paid out $3.1 billion in dividends and another $3.5 billion in share repurchases. It currently yields a decent 2.2%.

Home Depot (HD)

Home Depot (NYSE:HD) is having a rare down year in the markets. It’s off nearly 20% year-to-date and 18% over the past 52 weeks. Investors, rightly or wrongly, feel higher interest rates and inflation make home improvement stocks off limits.

If you’re buying for the long term, there is no question the stock will deliver above-average returns.

Recently, I discussed why I thought HD was one of the stocks in the Dow Jones Industrial Average that investors should take seriously in 2023. Besides being an outstanding dividend stock, I like it for several other reasons.

First, board member Paula Santilli bought nearly $500,000 of its stock in the open market on Nov. 16. It was her first open-market purchase since she joined the board on March 1 — and it was a big one.

Second, despite inflation and rising interest rates, it reported good third-quarter results in mid-November. Home Depot could benefit from homeowners staying home more to save money.

Lastly, to help grow its Pro business, it launched a jobseeker platform called Path to Pro Network in October that connects skilled tradespeople looking for work with construction and renovation firms that are hiring.

As they say, Home Depot’s chosen to be part of the solution rather than the problem.

Yielding 2.3%, get paid to wait for the markets to come around.

Best Dividend Stocks of All Time: Lam Research (LRCX)

Lam Research (NASDAQ:LRCX) released its Q1 2023 earnings in mid-October, the chip maker said that it expects to lose as much as $2.5 billion in revenue in 2023 from the Biden administration’s regulations against U.S. companies supplying equipment to Chinese chip makers.

According to Reuters, China accounts for 30% of its business.

Despite the black cloud hanging over its business, Lam’s Q1 2023 results were excellent, and the expectations for Q2 are also good.

Its sales were $5.07 billion in the September quarter, 9.5% higher than in Q4 2022. Its operating margin was 33.3% of revenue, 180 basis points higher than in the fourth quarter. Year-over-year, its revenue was 17.9% higher. Deferred revenue was $2.76 billion, 25% higher than at the end of June.

On Nov. 24, the company completed its acquisition of Semsysco GmbH, a provider of advanced packaging for computer chips used in high-performance computing and artificial intelligence.

In 2022, Lam paid out $815 million in dividends and repurchased $3.9 billion of its stock.

Whatever lies ahead, the company’s record quarterly revenue suggests that it’s got what it takes to lead the way over the next 10 years.

Air Products & Chemicals (APD)

Air Products & Chemicals (NYSE:APD) has increased its annual dividend for 40 consecutive years. Its 10-year annualized total return is 15.94%, 272 basis points higher than the SPY. It currently yields 2.1%.

On Oct. 6, 2022, Air Products announced that it would invest $500 million to build a green hydrogen production facility in Massena, New York. The facility will be able to produce up to 35 metric tons per day. In addition, the site will handle liquid hydrogen distribution and dispensing operations.

In 2018, the company committed to investing $30 billion in capital over 10 years, ending in 2027. This is part of the company’s efforts to reduce its carbon dioxide emissions by one-third in 2030.

Air Products reported its Q4 2022 and full-year earnings on Nov. 3. The company’s full-year EPS estimate was $10.3o. It earned 11 cents more than that, increasing earnings by 15% over 2021.

In 2023, it expects to earn $11.35 a share at the midpoint of its guidance. That’s based on $5.0-$5.5 billion in capital expenditures. It trades at 27.5x its 2023 earnings. That’s slightly higher than its five-year average of 24.6x.

Over the past 10 years, it’s grown its adjusted EPS by 11% compounded annually. Not surprisingly, its dividends have increased similarly over the same period.

Consistent growers of earnings are also consistent growers of dividends.

Best Dividend Stocks of All Time: BlackRock (BLK)

BlackRock (NYSE:BLK) got a downgrade in mid-October from UBS analyst Brennan Hawken. The analyst lowered his rating from “buy” to “neutral” because of the asset management company’s focus on environmental, social, and governance (ESG) principles.

Hawken also slashed his target price by $115 to $585, well below where it’s currently trading.

Of the 16 analysts covering the asset manager’s stock, 10 rate it a buy. Overall, they give it an overweight rating with an average target price of $648, also below its current share price.

While it is true that BlackRock is facing criticism from all sides on this issue, the potential loss of business it faces is overstated. As Barron’s reported, BlackRock has attracted $1.5 trillion in net new investments since the end of 2018.

It must be doing something right.

On Oct. 13, it reported adjusted Q3 2022 EPS of $9.55, down from $11.34 a year earlier but 30% higher than at the end of June.

“BlackRock generated industry-leading long-term net inflows of $248 billion in the first nine months of 2022, including $65 billion in the third quarter. We once again saw strong growth in bond ETFs, with $37 billion of net inflows,” stated CEO Larry Fink in the company’s Q3 2022 press release.

As Mark Twain would say: “The reports of BlackRock’s death are greatly exaggerated.”

Northrop Grumman (NOC)

Northrop Grumman (NYSE:NOC) and the U.S. Airforce unveiled the B-21 bomber on Dec. 2.

“The B-21 is the most advanced military aircraft ever built and is a product of pioneering innovation and technological excellence,” Doug Young, sector vice president and general manager at Northrop Grumman Aeronautics Systems, said in a press release.

Currently, the defense and aerospace company is building six B-21s, and they are on time and within budget. An individual plane is estimated to cost the U.S. Air Force $2 billion. The B-21 program will cost taxpayers more than $203 billion.

Who says war doesn’t pay?

My wife’s uncle’s family had their home taken by the Russians in Lithuania during World War II. They used it as a college after the war. It’s now a derelict building in the countryside. He always says war pays. At $2 billion a pop, you better believe it.

Northrop expects 2022 revenues of $36.4 billion at the midpoint of its guidance, with earnings per share of $24.80. Its adjusted free cash flow guidance is $1.65 billion.

It’s not cheap at 42x free cash flow, but with the things as they stand, defense spending isn’t going down anytime soon.

Best Dividend Stocks of All Time: Becton Dickinson (BDX)

Becton Dickinson (NYSE:BDX) has increased its annual dividend for 51 consecutive years. The company most recently increased its dividend with the December 2022 payment. It now pays $0.91 a share quarterly. Its annualized payment of $3.64 yields 1.5%.

When I think of Becton Dickinson, I think of the allergy shots I got every week as a kid. You couldn’t miss the BD logo on the side of the needle. While I’m glad I no longer get those shots, it’s a profitable part of the company’s history.

However, the healthcare giant has changed immensely since then.

On Oct. 5, BD announced a collaboration with the Ottawa Hospital (TOH) That will improve the quality of patient care by creating the first “smart” hospital in Ontario. I’m originally from Ontario, so I’m personally interested in this development.

The company’s software harnesses data to ensure safeguards are implemented to reduce these errors. The Ottawa Hospital gets to see this up close and personal.

In terms of revenue directly generated by its technology products and services, its Medication Management Solutions (MMS) unit — a part of the company’s Medical segment — had revenues of $2.53 billion in 2022, 5.6% higher than a year earlier, excluding currency.

In July, Becton Dickenson acquired Parata Systems for $1.55 billion. The acquisition adds to Becton Dickenson’s pharmacy automation solutions, which are now part of its MMS unit.

Its 10-year annualized total return is 13.93%, 71 basis points higher than the entire U.S. market.


MSCI (NYSE:MSCI) has long been a favorite of mine. While it might not pay out the amount of dividends and share repurchases that some of the other names on my list do, I don’t think you can argue with its shareholder returns over the past decade.

The company has a 10-year annualized total return of 33.97%, nearly three-fold higher than SPY.

On Oct. 25, MSCI reported its Q3 2022 results. They included an 8.4% increase in revenue, a 10.5% growth in operating income, and a 17.5% increase in recurring subscription revenue to $420.2 million. For the nine months that ended Sept. 30, recurring subscription revenue was $1.23 billion, accounting for 74% of MSCI’s overall revenue.

The company’s total run rate through Sept. 30 was $2.20 billion, 5.1% higher than in the same period a year earlier, led by an 11.5% increase in recurring subscriptions, offset by a 12.9% decrease in asset-based fees from its Index business.

At the midpoint of its guidance. MSCI expects a free cash flow of $1.05 billion, up from $1.03 billion. It finished the third quarter with $867 million in cash and cash equivalents. Its $4.5 billion long-term debt is low at 11% of its $41.7 billion market cap.

MSCI stock isn’t cheap at 18.7x its trailing 12-month sales, but when you deliver annual returns greater than 30%, you deserve a higher multiple.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

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