Thursday, January 31, 2013

Stocks with Over 100 Years of Uninterrupted Dividends (Last Part)

Investors should get excited about businesses that have consistently paid uninterrupted dividends for more than a century. Those businesses have weathered all the ups and downs of many catastrophic events, including World War I, World War II, the Great Depression, Oil Shock, etc. They still survived, prospered, and returned cash to shareholders in the form of dividends. In the two previous articles, I have featured five stocks that have consistently been paying dividends for more than 100 years, including Colgate Palmolive, Johnson Controls, Church & Dwight, Consolidated Edison and PPG Industries. In this last part, I will write about two more stocks with 100+ years of dividend payments.
Global Largest Oil/Gas Player
Exxon Mobil (NYSE: XOM) used to be the largest publicly traded corporation in the world, before being outpaced by Apple.  However, Exxon Mobil is still considered to be the biggest publicly traded oil and gas corporation, with 36 refineries in 20 countries. The total proved reserves were 24.9 billion BOE, including its oil sand stakes via Imperial Oil, as of Dec 2011. ExxonMobil’s proved reserves were much larger than those of BP’s (NYSE: BP) 17.75 billion BOE, and Chevron’s (NYSE: CVS) 11.2 billion BOE. Exxon Mobil has also become the biggest natural gas player in the US, via its acquisition of XTO Energy for as much as $26 billion more than 2 years ago. Thus, the low price of natural gas might have some short-term negative impact on the company’s returns, but the long-term perspective for this oil/gas giant is terrific. 
Exxon Mobil has been consistently returning cash to shareholders for more than a century. It first paid a dividend in 1882, marking an incredible 130 years of uninterrupted dividend payments. Exxon Mobil has raised its dividends over the last 10 years, from $0.92 per share in 2002 to $1.85 per share in 2011. Currently, the dividend yield is 2.5%, whereas BP is paying its shareholders a 4.8% dividend yield, and Chevron’s dividend yield is 3.3%. At the current price of $86.55 per share, the total market capitalization is $394.61 billion. The market is valuing the company at 10.1x forward P/E and 2.4x P/B.
Global Leader in Hand and Power Tools
Stanley Black & Decker (NYSE: SWK), founded in 1843, has been paying dividends since 1877, or more than 135 years. It was known as Stanley Works before the 2012 merger with Black & Decker Corporation. The combination between Stanley Works and Black & Decker has made the merged company the global leader in the hand and power tools industry, as well as hardware, which could brings a lot of value to shareholders and customers worldwide.
It had three main business segments: Construction & Do-It-Yourself, Security, and Industrial. The majority of its revenue came from the first business segment, nearly $5.24 billion, accounting for 50.5% of the total 2011 revenue. The other two segments brought similar revenue: $2.64 billion for the Security segment and $2.5 billion for the Industrial segment. Stanley Black & Decker has also increased its dividend payments consistently for the last 10 years, from $0.99 per share in 2002 to $1.64 per share in 2011. The current dividend yield is 2.5%. At the current trading price of $73.97 per share, the total market capitalization is $12.49 billion. The market is valuing the company at 12x forward P/E and 1.7x book value.
Foolish Bottom Line
I have covered 7 businesses that have paid uninterrupted dividends for more than 100 years. What a wonderful record for long time shareholders! Thus, the wealth of the investors would be compounded gradually over time with those sustainable and consistently increasing dividends. All of those 7 businesses could fit well within the income portfolios of long-term investors.

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