Michael Sivy Commentary:
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6 dividend all-stars
Companies that keep increasing their dividends typically provide superior total returns.
By Michael Sivy, Money Magazine editor-at-large

NEW YORK (MONEY) -- One of the most reliable ways for investors to build their wealth is to focus on companies with long track records of increasing dividends.

Over the long-term, rising dividends not only provide generous income. When dividends keep climbing steadily, share prices tend to move up as well. That's especially true if a company increases its payout every year.

Regular dividend hikes are one of the signs of a solid, seasoned management that is committed to rewarding shareholders. Consistency counts more than current yield.

Investors who need income may want to focus on the highest-yielding stocks. But shares that pay as little as 1 percent initially can still be winners if their dividends go up rapidly.

I've screened the Sivy 70 list, looking for companies that have raised their dividends 30 years in a row. Then I've pared down that list based on financial strength and the current level of analyst support for the stock.

In addition, I've looked for a potential total return averaging more than 12 percent a year, based on a combination of projected earnings growth over the next five years and current yield.

The table below shows six companies that meet those tests. You can find more such stocks in a number of conservative investing guides. This list is based on information drawn from "America's Finest Companies," available from the Staton Institute (statoninstitute.com).  Top of page

Consistency Counts: Six to watch
These stocks from the Sivy 70 list have raised their dividends at least 30 years in a row and also offer total return potential of 12% or more, based on projected earnings growth and dividend yields.
Company Price
(8/31/06)
P/E
(next year)
Earnings growth
(next 5 years)
Dividend
Yield
General Electric (GE) 34.06 15.1 10% 2.9%
Illinois Tool Works (ITW) 43.90 12.9 12% 1.9%
Johnson Controls (JCI) 71.93 11.9 12% 1.6%
Pepsico (PEP) 65.28 19.8 11% 1.8%
Procter & Gamble (PG) 61.90 20.6 12% 2.0%
Sysco (SYY) 31.39 19.8 13% 2.2%
P/E and dividend information from Thomson/Baseline

Sivy 70: America's Best Stocks

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.