Investing in the stock market has proved to be the surest way to creating significant wealth over time. While there are any number of strategies an investor can employ to beat Wall Street at its own game, one stands out above all others.

Dividend stock investing has generated higher returns for investors. For nearly 100 years, stocks that have paid shareholders a dividend have outperformed all other classes of stock.

Hartford Funds, in partnership with Ned Davis Research, analyzed the performance of stocks for the past six decades and found that income stocks beat non-dividend payers by a better than two-to-one margin.

Even better, stocks in the S&P 500 index that initiated a dividend and then raised the payout over time beat those that simply paid dividends but didn’t increase them.

Elite dividend stocks are those that have raised their dividends every year for 50 years or more. Called Dividend Kings, they are a rarified group of just 53 companies that year in and year out, have rewarded shareholders with dividend increases for at least a half century. It underscores their success, reliability, and profitability.

But don’t buy them just because they are among the dividend royalty. Due diligence is still needed. 3M (NYSE:MMM) was a Dividend King that slashed its payout in half as sluggish sales and mounting legal bills ate away at its available free cash flow.

Dividend Kings are stalwarts, and the following two have solid records and are not at financial risk. Moreover, their dividends yield a lucrative 5% or better, or more than four times the average S&P 500 stock.

24/7 Wall St. Insights:

• Dividend Kings are the elite of dividend-paying stocks, having increased their payouts for 50 years or more.
• Studies continuously show income-generating stocks outperform all other classes of stock, and those that raise their dividends have performed the best.
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Altria (MO)

Tobacco giant Altria (NYSE:MO) owns the iconic Marlboro brand, the leading cigarette on the market with a 42% share. It has paid a dividend for almost 100 years and has increased the payout for 55 consecutive years. It yields 8.1% annually.

While cigarette smoking is in a secular decline, the rise of reduced-risk products such as electronic cigarettes, vaping, nicotine pouches, snus, and more has breathed new life into the industry. While their contribution to Altria’s revenue remains small at the moment, they are enjoying substantial growth.

Oral tobacco sales were up 5.5% net of excise taxes compared to a 10% drop in domestic cigarette volumes. In part, that was caused by growth in illicit e-vapor products. Yet Altria’s own NJOY e-cig saw a 14.7% increase in shipment volumes for consumables and an 80% surge in devices. Shipments of its on! brand of nicotine pouches jumped 37%.

Because tobacco is a mature industry, Altria is committed to returning upwards of 80% of its earnings to shareholders. That makes MO stock an attractive Dividend King to buy.

Northwest Natural (NWN)

Utilities were hit harder than most industries by the Federal Reserve’s high-interest rate policies. Their borrowing costs accelerated because they are capital-intensive businesses that rely heavily upon debt financing. 

Now that we’re moving into a new rate-easing cycle, utilities should shine. They have been one of the best-performing sectors in 2024. The S&P 500 Utilities Sector index is up 24% year-to-date, just behind tech stocks and financials.

Northwest Natural (NYSE:NWN) has held up better than most. It provides natural gas services for the Pacific Northwest states of Oregon and Washington and water service in Texas and Arizona. The utility owns a combination of distribution pipelines, transmission lines, and service lines, while also owning several storage facilities possessing billions of gallons of capacity. 

The utility has been in business for over 160 years and has paid a dividend since 1952. And after just announcing its latest increase, Northwest Natural has raised the payout for 69 straight years. The dividend yields a healthy 5% annually.

There is a reason utility stocks were long considered widows-and-orphans stocks. Because of the reliability of their income stream and their near monopoly status, utilities were a dependable source of money. That still holds true today, and Northwest Natural remains a solid choice as a long-term buy-and-hold Dividend King.

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