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Energy and industrial companies drive the global economy. Many of the simplest products and services you enjoy today require massive factories and energy to produce enough supply to meet the demands of a world population that has grown to more than 8 billion people. I need it.
Economic ups and downs can pose risks to energy and industrial stocks, but some stocks are diversified and well-managed enough to weather the adversity. And nothing says that more than dividend growth.
These four companies have been increasing dividends for decades and are poised to deliver raises for decades to come.
1. ExxonMobil
Energy moves the world, exxon mobil (XOM 0.70%) We are at the heart of making that happen. The energy giant is an integrated oil and gas company that explores, produces, refines, and markets a variety of energy products around the world. Although not entirely dependent on commodity prices, lower oil and gas prices could adversely affect ExxonMobil’s business.
But ExxonMobil has paid and increased dividends for 42 consecutive years, through geopolitical conflicts and economic downturns. Over the past few years, rising commodity prices have padded ExxonMobil’s pockets with cash, bolstering its massive balance sheet with nearly $400 billion in assets compared to just $6 billion in net debt. If you buy ExxonMobil, you can be satisfied with the continued 3.4% starting dividend yield.
2. Illinois Tool Works
Diversification can help businesses. If one part of your business stumbles, another part can pick it up.That’s one of the secrets behind illinois tool works‘ (ITW 0.56%) It has increased dividends for 61 consecutive years, making the company’s stock the Dividend King. The company serves many markets, including business segments specializing in automotive, food equipment, electrical test and measurement, welding, polymers and fluids, construction products, and specialty products.
As long as the world continues to make things, it seems like there’s a business opportunity for Illinois Tool Works. The company’s success stems from prudent management that does not carry too much debt on the balance sheet. The business is currently leveraged at a manageable ratio of just 1.9x EBITDA.
Finally, the dividend payout ratio of 52% also leaves a lot of room for dividends.
3. Badger meter
Most investors have probably never heard of badger meter (BMI 0.95%), but perhaps times have changed. Badger Meter is a flow and measurement technology company with operations in the water, energy, industrial, and agricultural industries. The company makes devices that measure and analyze liquid and gas flows, such as measuring the amount of water used by farmers to water crops or analyzing the flow of gas used in hydraulic fracturing. On sale.
As the world becomes increasingly crowded and efficiency is sought to produce the most resources for the least amount of money, the demand for Badger Meter’s products appears to be increasing. The company is a dividend rock star with 32 years of consecutive dividend increases. With a payout ratio of just 30% of cash flow, the dividend is likely to grow over the next few decades.
4. NextEra Energy
Renewable energy is steadily playing a role in the world’s energy landscape. NextEra Energy (Hey 1.83%) plays an important role as one of the world’s largest renewable energy producers. The company is also America’s largest electric utility, providing electricity to more than 12 million people in Florida. Renewable energy now accounts for more than 20% of electricity in the United States, as many companies strive to reduce carbon dioxide emissions. This was a great boost for NextEra. NextEra is S&P500 Long term.
NextEra has been paying and increasing dividends for 30 consecutive years, and that’s not likely to end anytime soon. The company’s management remains confident in NextEra’s prospects, telling shareholders it will raise its dividend by at least 10% annually through at least 2026. There is also a financial safety net in place, as the dividend payout ratio is only half of the company’s profits.
Justin Pope has no position in any stocks mentioned. The Motley Fool owns a position in NextEra Energy and recommends NextEra Energy. The Motley Fool has a disclosure policy.
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