A bounce-back year for dividends

A record profit rebound for U.S. companies powered by the reopening of the economy puts the S&P 500 index on track in 2021 for its 10th straight year of record dividend payouts. Here are seven standouts that have hiked payouts an average of

55 years in a row:

3M, the maker of Post-it Notes, ACE bandages and a myriad of other consumer, industrial, electronic and health care products, extended its streak of consecutive dividend increases to 63 years in 2021. The conglomerate’s bottom line has been crimped by rising costs for raw materials, worker pay and transporting goods, as well as legal costs related to lawsuits involving military earplugs. Still, business remains sound.

Air Products & Chemicals started

2021 with a 12% dividend increase, but its shares have tumbled nearly 10% over the past year. Analysts blame the underperformance on pandemic headwinds and uncertainties surrounding an energy project in Saudi Arabia. But both drags appear to be mostly in the rearview mirror.

Emerson Electric, the maker of climate-control systems and automation products that help businesses improve efficiency, is in rebound mode. Following fiscal 2020’s profit contraction, annual earnings are forecast to grow 10%, on average, over the next three to five fiscal years, according to Zacks Investment Research. A profit pop bodes well for free cash flow and, hence, dividends, which have risen for 64 years straight.

Johnson & Johnson has been in the spotlight thanks to its COVID-19 vaccine. The health care giant forecasts $2.5 billion in COVID-19 vaccine sales for 2021, but that is just a fraction of its 2021 revenue forecast of $94.6 billion. J&J boasts a deep drug pipeline, ample cash flow and a diverse revenue base that includes its pharmaceutical business, its consumer health business and its medical-device division. J&J is on course to boost its dividend by 5% in 2022, according to Argus analysts.

McDonald’s in September increased its dividend for the 45th straight year since its first payout in 1976, when a Big Mac cost 75 cents (it goes for $3.99 today). The fast-food chain’s business is heating up, powered by the easing of COVID-19 restrictions, price increases and a spike in app-driven sales to customers who can order and get their burgers and fries without ever setting foot in a restaurant. McDonald’s global sales in the first six months of the year surpassed pre-pandemic levels.

Procter & Gamble, the consumer packaged-goods giant that brings you Mr. Clean, is Mr. Consistency when it comes to dividend hikes. A 10% increase earlier this year was the company’s 65th consecutive annual increase. In its most recent fiscal year, which ended in June, P&G paid out $8.3 billion in dividends, and the company has indicated it will pay out more than $8 billion again in fiscal 2022.

Walmart stock has been a bit of a dud. The retailer is now less of a speedy grower and more of a steady cruiser, with a dividend payout that has risen for 48 consecutive years.

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