Eleven Dividend Machines Beating Inflation

One of the biggest challenges that investors face is the eroding power of inflation. The purchasing power of a dollar with a 3% annual inflation rate declines by 50% in 24 years. This is exactly why investors, who focus on current yield today, might not be able to sustain their lifestyles one or two decades into retirement. The perfect inflation hedge for these investors are dividend growth stocks. These stocks not only provide inflation adjusted stream income over time, but also provide investors with capital gains, which preserves the purchasing power of your principal. Below, I have highlighted eleven such stocks, which have consistently raised annual dividends for at least five years in a row, and which also announced dividend hikes last week:

V.F. Corporation (VFC), together with its subsidiaries, engages in the design, manufacture, and sourcing of branded apparel and related products for men, women, and children in the United States. The company’s board of directors approved a 5% increase in its quarterly dividend to 63 cents/share. This dividend aristocrat has consistently raised distributions for 38 consecutive years. Yield: 3% (analysis)

Kinder Morgan Energy Partners, L.P. (KMP) owns and manages energy transportation and storage assets in North America. The master limited partnership increased its quarterly distributions to $1.11/unit, which was a 5.70% increase over the 4Q 2009 distribution of $1.05/unit. This dividend achiever has consistently raised distributions for 15 years in a row. Yield: 6.30% (analysis)

Eaton Vance Corp. (EV), through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. The company’s board of directors approved a 12.5% increase in its quarterly dividend to 18 cents/share. This is the 30th consecutive annual dividend increase for this dividend champion. Yield: 2.40%

Stepan Company (SCL) engages in the production and sale of specialty and intermediate chemicals. The company’s board of directors increased the quarterly dividend 8.3% to 26 cents/share. This dividend champion has raised distributions for 43 years in a row. Yield: 1.60%

Shenandoah Telecommunications Company (SHEN), through its subsidiaries, provides regulated and unregulated telecommunications services to end-user customers and other communications providers in the southeastern United States. The company increased its annual dividend by 3% to 33 cents/share. This dividend achiever has raised distributions for 16 years in a row. Yield: 1.70%

Met-Pro Corporation (MPR) manufactures and sells product recovery and pollution control equipment for purification of air and liquids, fluid handling equipment for corrosive, abrasive and high temperature liquids, and filtration and purification products in the United States and internationally. The company increased the quarterly dividend by 10% from 6 cents/share to 6.60 cents/share. Met-Pro has consistently raised dividends every year since 2000. Yield: 2.40%

ONEOK, Inc. (OKE), a diversified energy company, operates as a natural gas distributor primarily in the United States. The company operates in three segments: ONEOK Partners, Distribution, and Energy Services. ONEOK increased its quarterly dividend by 4.40% to 48 cents/share. The company has raised dividends since 2002. Yield: 3.90%

ONEOK Partners, L.P. (OKS) engages in the gathering, processing, storage, and transportation of natural gas in the United States. This master limited partnership raised its quarterly distributions to $1.13/unit. The company has consistently raised distributions since 2003. Yield: 5.80%

Magellan Midstream Partners, L.P. (MMP), together with its subsidiaries, engages in the transportation, storage, and distribution of refined petroleum products in the United States. This master limited partnership increased the its quarterly cash distribution to 74.5 cents/unit, which was a 4.90% increase over it 4Q 2009 distribution. The partnership has consistently raised distributions since 2001. Yield: 5.60%

Cass Information Systems, Inc. (CASS) provides payment and information processing services to manufacturing, distribution, and retail enterprises in the United States. The company raised its quarterly dividend by 14.30% to 16 cents/share. Cass Information Systems, Inc. has regularly raised dividends since 2002. Yield: 1.80%

Brown & Brown, Inc. (BRO), together with its subsidiaries, operates as a diversified insurance agency, wholesale brokerage, insurance programs, and service organization in the United States. The company raised its quarterly dividend by 3.20% to 8 cents/share. This dividend achiever has regularly raised distributions for 17 years in a row. Yield: 1.50%

This list should be just a starting point for dividend investors. Additional time for research should be dedicated to each stock in order to determine its valuation, sustainability and potential for growth in earnings and dividends as well as whether it fits in your particular diversified portfolio.

Full Disclosure: Long KMR

Relevant articles:

- Inflation Proof your income in retirement with Dividend Stocks
- Kinder Morgan Energy Partners (KMP) Dividend Stock Analysis
- The Hyperinflation Scam
- Six Notable Dividend Growth Stocks in the News