Choosing to invest in long-term dividend stocks means selecting companies with a strong track record of dividend payments, robust cash flow, and sustainable growth. These companies often prioritize financial health and stability, rewarding shareholders through regular income and attractive yield metrics. By focusing on essential indicators like a dividend payment streak exceeding ten years, consistent free cash flow growth, and a favorable P/E ratio, investors can identify dividend stocks that not only offer reliable payouts but also long-term value appreciation. This approach provides a balanced investment option, blending income with growth potential.
Methodology: How Did We Choose These Stocks?
To identify the most promising long-term dividend stocks, we applied a rigorous selection process using a set of key financial metrics designed to pinpoint companies with stable income potential and sustainable growth. Here are the metrics we used:
Dividends Payment Streak: We considered only companies with a history of paying dividends for over ten consecutive years, reflecting a commitment to returning capital to shareholders.
Unlevered Free Cash Flow Growth: By focusing on companies with over 10% growth in unlevered free cash flow, we ensured they have a solid financial foundation to support ongoing dividend payments.
Dividend Yield: A minimum yield of 3% was required, which offers investors an attractive income stream relative to other asset classes.
P/E Ratio: To avoid overvalued stocks, we filtered for those with a price-to-earnings ratio between 10 and 30, indicating fair valuation based on current earnings.
Market Capitalization: Only companies with a market cap above $1 billion were included, as larger firms typically have more stable cash flows and are less volatile.
Dividend CAGR (5-Year): We looked for companies with a five-year dividend compound annual growth rate (CAGR) of over 10%, signaling a trend of increasing dividends over time.
Shareholder Yield: Finally, we prioritized stocks with a shareholder yield above 10%, indicating strong returns through dividends and share buybacks.
By combining these metrics, we were able to identify dividend stocks that not only meet high standards for financial health and reliability but also align with a long-term income-focused investment strategy.
Best Long-Term Dividend Stocks
| Company Name | Symbol | Dividends Payment Streak | P/E Ratio | Market Cap |
| Nihon M&A Center Inc | 2127 | 18 | 17.9x | 1.233 B |
| China Resources Gas Group Ltd | 1193 | 16 | 14.4x | 9.394 B |
| Hilton Food Group Plc | HFG | 18 | 17.6x | 1.065 B |
| First Interstate BancSystem Inc | FIBK | 15 | 14.1x | 3.319 B |
| Nuvoton Technology Corp | 4919 | 15 | 23.3x | 1.228 B |
| Wisdom Marine Lines Co Ltd | 2637 | 15 | 10.9x | 1.733 B |
| Xiamen ITG Group Corp Ltd | 600755 | 22 | 22.6x | 2.088 B |
Industry: M&A Advisory
Market: Japan
Dividends Payment Streak: 18
P/E Ratio: 17.9x
Market Cap: 1.233 B
Nihon M&A Center Inc. specializes in providing merger and acquisition advisory services, focusing on small and medium-sized enterprises in Japan. The company helps businesses navigate the complexities of mergers, acquisitions, and business transitions, leveraging its extensive network and expertise in the industry.
Industry: Energy
Market: Hong Kong
Dividends Payment Streak: 16
P/E Ratio: 14.4x
Market Cap: 9.394 B
China Resources Gas Group Ltd is a leading natural gas service provider in China, primarily engaged in the distribution and sale of natural gas. The company plays a crucial role in meeting the growing energy demands of cities and industries, contributing to a more sustainable energy future in the region.
Industry: Food Processing
Market: UK
Dividends Payment Streak: 18
P/E Ratio: 17.6x
Market Cap: 1.065 B
Hilton Food Group Plc is a prominent international meat packing and food processing company. It supplies high-quality meat products to major retailers, with a strong commitment to sustainability and innovation in food production practices, ensuring customer satisfaction and safety.
Industry: Banking
Market: USA
Dividends Payment Streak: 15
P/E Ratio: 14.1x
Market Cap: 3.319 B
First Interstate BancSystem Inc. operates as a bank holding company, providing a range of financial services including personal and commercial banking. The institution is dedicated to serving its communities with tailored financial solutions, fostering economic growth and development.
Industry: Semiconductors
Market: Taiwan
Dividends Payment Streak: 15
P/E Ratio: 23.3x
Market Cap: 1.228 B
Nuvoton Technology Corp is a leading semiconductor manufacturer specializing in microcontrollers, audio ICs, and other innovative electronic components. The company focuses on delivering cutting-edge solutions to various sectors, contributing to advancements in technology and consumer electronics.
Industry: Shipping
Market: Taiwan
Dividends Payment Streak: 15
P/E Ratio: 10.9x
Market Cap: 1.733 B
Wisdom Marine Lines Co Ltd is a shipping company engaged in the transportation of dry bulk cargo. With a modern fleet and a commitment to operational efficiency, the company plays a vital role in global trade, facilitating the movement of goods across international waters.
Industry: Trade & Logistics
Market: China
Dividends Payment Streak: 22
P/E Ratio: 22.6x
Market Cap: 2.088 B
Xiamen ITG Group Corp Ltd is a diversified trading and logistics company involved in various sectors including import and export, supply chain management, and retail. The company leverages its strategic positioning and extensive network to optimize trade flows and enhance business operations.
How to Find Long-Term Dividend Stocks
Investors can find long-term dividend stock opportunities easily using the advanced InvestingPro stock screener. Here are the steps:
Click on the Screener Tool.
- Navigate to the stock screener page to start filtering your stock options.
Set Dividend Payment Streak.
- Select the filter for “Dividends Payment Streak.”
- Set the minimum requirement to 10 years to focus on companies with a consistent history of paying dividends.
Filter by Unlevered Free Cash Flow Growth.
- Choose the “Unlevered Free Cash Flow Growth” filter.
- Set the threshold for growth to greater than 10% to ensure the company has strong financial health to support dividends.
Select Dividend Yield.
- Find the “Dividend Yield” filter.
- Adjust the settings to include only companies with a minimum yield of 3% to ensure a satisfactory income stream for investors.
Apply Price-to-Earnings Ratio.
- Locate the “P/E Ratio” filter on the screener.
- Set the range between 10 and 30 to identify stocks that are fairly valued.
Market Capitalization Filter.
- Select the “Market Cap” filter parameter.
- Set the minimum market capitalization threshold to $1 billion to focus on more stable and less volatile companies.
Add Dividend CAGR (5-Year) Criteria.
- Choose the “Dividend CAGR (5-Year)” filter.
- Set the threshold to greater than 10% to find companies with a trend of increasing dividends.
Final Filter for Shareholder Yield.
- Find the “Shareholder Yield” filter.
- Set the minimum requirement to greater than 10% to prioritize stocks providing strong returns through dividends and share buybacks.
Long-Term Dividend Stocks FAQs (Frequently Asked Questions)
1. What are long-term dividend stocks?
Long-term dividend stocks are shares in companies that have a consistent history of paying dividends to their shareholders over an extended period, typically more than ten years. These stocks are often sought for their potential to provide steady income and capital appreciation.
2. Why should I invest in long-term dividend stocks?
Investing in long-term dividend stocks can provide a reliable income stream, especially during market volatility. They often indicate financial stability and growth potential, as companies that consistently pay dividends tend to be well-managed with solid business models.
3. How do I evaluate long-term dividend stocks?
Key metrics to evaluate long-term dividend stocks include the dividend payment streak, unlevered free cash flow growth, dividend yield, P/E ratio, market capitalization, dividend CAGR (compound annual growth rate), and shareholder yield. These metrics help assess the company’s ability to sustain and grow its dividend payouts.
4. What is a good dividend yield?
A good dividend yield generally depends on market conditions and individual investment goals. However, a yield of 3% or higher is often considered attractive, as it offers a decent return compared to other asset classes.
5. What does a dividend payment streak indicate?
A dividend payment streak indicates a company’s commitment to returning capital to its shareholders. A long streak (typically over ten years) suggests that the company has maintained stable earnings and cash flows, which is crucial for sustaining dividend payments.
6. What is the significance of P/E ratio in dividend stocks?
The P/E ratio helps investors gauge whether a stock is overvalued or fairly priced based on its earnings. A P/E ratio between 10 and 30 is generally considered reasonable for dividend stocks, suggesting that investors are paying a fair price for expected earnings.
Shareholder yield encompasses both dividends paid and share buybacks, providing a comprehensive view of how much cash a company returns to its shareholders. A shareholder yield above 10% is often seen as a strong indicator of a company’s commitment to creating value for investors.
Dividend yield refers to the annual dividend payment expressed as a percentage of the stock’s current price, indicating the income generated solely from dividends. In contrast, shareholder yield includes not only dividends but also share buybacks, reflecting the total return to shareholders through both mechanisms. Thus, shareholder yield provides a broader view of how a company returns capital to its investors.
9. How often do dividend stocks pay dividends?
Most dividend stocks pay dividends quarterly, but some may pay monthly, semi-annually, or annually. It’s essential to check the specific company’s dividend policy for exact payment schedules.
App Store
Google Play