58 Years Of Consecutive Dividend Growth
There are only about 55 companies considered to be Dividend Kings.
Dividend Kings are companies with dividend growth for at least each of the last 50 years.
It’s quite the accomplishment for a company to raise its dividend for so long.
Just think about it… these companies raised their dividends during recessions, bank crashes, and a global pandemic.
It shows a huge commitment to their dividend, which is great for dividend investors.
One Dividend King just raised its dividend again.
It just hit 58 straight years of dividend growth!
H.B. Fuller (ticker: FUL) isn’t a massive company… it’s worth only about $3.5 billion.
But the specialty chemical company is an industry leader in regard to dividend growth.
Only one other chemical company has grown its dividend for longer, and it’s only by a few months!
H.B. Fuller is a chemical company focused on the manufacture of adhesives and sealants.
Its products are used pretty much everywhere from cars and trucks to electronics, food packaging, and green energy.
Here’s a site of all of the industries H.B. Fuller serves.
H.B. Fuller is a pretty stable company with few competitors, leading to consistent growth historically.
Over the past decade, H.B. Fuller’s sales and earnings have grown on average by 5% and 6% each year, respectively.
Its stable growth allows H.B. Fuller to consistently raise its dividend.
Since 2000, H.B. Fuller grew its dividend by an average of 7% per year.
However, most of the growth in its dividend has been recent, with its dividend averaging over 9% growth each year since 2011.
H.B. Fuller is raising its dividend again.
Its next payment will be $0.245 each quarter, which is 4.25% higher than its last payment, and marks the 58th straight year H.B. Fuller has raised its dividend.
Don’t wait too long though.
You need to own H.B. Fuller by April 29 (Wednesday) to get the higher payment.
H.B. Fuller’s dividend yield is only around 1.5%, so it’s not the best pick if you need a lot of income right now.
But dividend investing is all about having patience, and there aren’t many companies with H.B. Fuller’s dividend record.
Can H.B. Fuller continue to raise its dividend?
Over the past 12 months, H.B. Fuller has generated about $150 million in free cash flow.
Free cash flow is the amount of cash a company makes by operating its business minus money spent on buying equipment and new factories.
In the same 12-month period, H.B. Fuller only paid out $50 million in dividends, so only about 33% of its free cash flow is being used for dividends.
A 33% dividend payout ratio is great because it’s high enough to give some money back to investors, but low enough to keep enough cash to reinvest and grow the business.
And H.B. Fuller has an awesome and profitable business.
The company’s return on equity (ROE) of 8.25% is one of the highest among chemical companies.
And H.B. Fuller has been paying down its debt and lowered its debt-to-equity ratio to 1.0x, which hasn’t been lower since 2017.
Plus, you’re getting the stock at a great price.
H.B. Fuller’s forward price-to-earnings ratio, which uses next year’s earnings, is only 13x, one of the lowest in the chemicals industry.
What Dividend Kings do you own?
Michael Jennings
Dividend Stocks Research
Category: Dividend Stocks To Buy?
