Paying Dividends Since the 19th Century
Can you list at least five companies that have been paying dividends since the 1800s? How about 10 companies which have been paying dividends for more than 115 years? In this post I list a few American and Canadian companies that have been paying dividends for a very long time.
But first, what is a dividend? A dividend is a cash payment paid to shareholders monthly, quarterly, or annually. The company decides when and how much to pay shareholders. As a shareholder you are part owner of the company, essentially the company is sharing its profits with you the owner.
For example, if company XYZ has an annual dividend of $1 per share, and you own 1000 shares you will receive $1000 cash each year for as long as you own those shares, and as long as the company continues to payout the $1/share dividend. You will continue to receive $1000 cash per year regardless of the share price, the stock price can drop or increase but the dividend will remain, as long as the company maintains its dividend.
Remember companies are under no obligation to pay dividends. Companies can reduce or eliminate the dividend at any time. However any reduction in the dividend usually results in a drop in the share price, so responsibly run companies think long and hard (and crunch all the numbers) before they announce a dividend or dividend increase. Financially healthy companies want to be sure that they can continue to pay the dividend for years to come. Therefore a dividend increase and a history of dividend payments are both good indicators of the financial health of a company.
Here is a list of some companies that have been paying dividends for more than 115 years:
Company Name, Dividend Paid Since
Coca-Cola Company, 1893
Consolidated Edison Inc., 1885
Exxon Mobil Corp., 1882
PPG Industries Inc., 1899
Procter & Gamble, 1891
Stanley Black & Decker Inc., 1877
UGI Corp., 1885
Bank of Montreal, 1829
Bank of Nova Scotia, 1833
BCE Inc., 1881
Canadian Imperial Bank of Commerce, 1868
Imperial Oil Ltd., 1891
Laurentian Bank, 1871
Royal Bank of Canada, 1870
Toronto-Dominion Bank, 1857
Just because a company is on this list does not mean you should go out and buy shares in these companies right away. The key to successful investing is to buy quality dividend-paying companies when they are undervalued.
Also as I’ve mentioned before, dividends are not guaranteed and, no one can tell the future, no analyst or expert can predict if a company will continue to pay dividends in the future. However looking at the companies listed above one can have a high degree of confidence that they will continue to payout dividends next year, the year after that, and in the years to come. Remember dividends are the key to success when it comes to investing.
Did you enjoy reading this article? If so, I encourage you to sign up for my newsletter and have these articles delivered via e-mail once a month…and it’s free!