Top 3 Dividend Aristocrats to Buy and Hold Forever
These three Dividend Aristocrats have increased their dividends for a quarter century, making them ideal for long-term growth investors.
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Investors looking for long-term opportunities should take a closer look at dividend growth stocks. Companies that have durable competitive advantages can raise their dividends each year, even during periods of economic recessions.
This article will take a look at three Dividend Aristocrats that have increased their dividends for at least 25 years, making them ideal buy-and-hold-forever stocks.
1. National Fuel Gas (NFG)
National Fuel Gas Co. NFG is a diversified energy company that operates in five business segments: Exploration & Production, Pipeline & Storage, Gathering, Utility and Energy Marketing. The largest segment of the company is Exploration & Production. Thanks to its vertically-integrated business model, it enjoys significant synergies.
In late January, National Fuel Gas reported financial results for the first quarter of fiscal 2025. The company reduced its production by 3% over the prior year’s quarter due to depressed gas prices. Thanks to effective hedging, the average realized price of natural gas rose from $2.51 to $2.53.
Moreover, thanks to higher rates in Pipeline & Storage, earnings-per-share grew 14%, from $1.46 to $1.66, and exceeded the analysts’ consensus by $0.10. The company has beaten the analysts’ estimates in 19 of the last 23 quarters.
As the price of natural gas has increased lately amid cold weather and National Fuel Gas expects to grow its production, it raised its guidance for earnings-per-share in fiscal 2025 from $5.50 to $6.00 to $6.50 to $7.00.
National Fuel Gas pursues growth by growing its natural gas production and expanding its pipeline network. The company has grown its earnings-per-share at a 6.2% average annual rate over the last seven years. Moreover, the company grew its proved reserves 8% in 2022 and 9% in 2023. This certainly bodes well for future growth prospects.
National Fuel Gas has a healthy balance sheet while its interest coverage level stands at a strong 5.2. Moreover, its dividend payout ratio is sufficiently low to enable continued dividend growth even if earnings stall temporarily. Management has always targeted a dividend payout ratio around 50% in order to have a wide margin of safety against the wide fluctuations of the price of natural gas.
NFG has increased its dividend for 54 consecutive years.
2. McDonald’s Corporation (MCD)
McDonald’s MCD, founded in 1940 and headquartered in Chicago, IL, is the world’s leading restaurant chain with 41,822 locations in about 119 countries at end of 2023. The highest store counts are in the U.S. (13,457), China (6,196), Japan (2,982), France (1,560) and Canada (1,466).
Approximately 95% of the stores are franchised or licensed and the rest are company owned. However, the company owns about 55% of the real estate and 80% of the buildings in its network. Total system sales were approximately $130 billion and total revenue was around $25.9 billion in 2024.
On February 10, McDonald’s reported Q4 2024 results. Total revenue came in at $6.388 million, flat, compared to $6.406 million in Q4 2023 on 2% higher systemwide sales adjusting for currency headwinds. Diluted earnings were flat at $2.80 per share compared to $2.80 per share in comparable periods on pre-tax charges. On a geographic basis, comparable sales were -1.4% in the U.S., +0.1% in the International Operated Markets, and +4.1% in the International Developmental Licensed Markets.
The firm’s focus on value deals and the McValue platform should boost traffic and sales. The company’s Accelerating the Arches strategy is driving growth and higher margins. It focuses on the digital app and dual-lane drive-thru, development and delivery to provide convenience.
Earnings per share growth should be driven by higher sales, declining operating costs, new restaurants, and share repurchases. The firm plans to grow its unit count by 4% to 5% annually and increase capital expenditures.
McDonald’s competitive advantage lies in its global scale, cost advantages, immense network of restaurants, well-known brand and real estate assets. The company has one of the most well-known brands in the world and has successfully replicated its business model globally. Next, McDonald’s often owns prime real estate, making it difficult for competitors to gain traction.
MCD has increased its dividend for 50 consecutive years.
3. Colgate-Palmolive (CL)
Colgate-Palmolive CL has been in existence for more than 200 years, having been founded in 1806. It operates in many consumer staples markets, including Oral Care, Personal Care, Home Care, and more recently, Pet Nutrition. These segments afford the company just over $20 billion in annual revenue.
Colgate-Palmolive posted fourth quarter and full-year earnings on January 31, 2025. The company managed to beat estimates on earnings-per-share by two cents at 91 cents.
Revenue was fractionally lower year-on-year to $4.94 billion, and missed estimates by $50 million. Organic sales were up 4.3%, including a 0.5% negative impact from lower private label pet food volume.
Positive pricing and volume added to organic growth, helping to offset the private label impact. Gross margin expanded 70 basis points despite forex headwinds.
Product mix is helping margins, particularly from Hill’s and Oral Care, both of which sport high margins. The company achieved record free cash flow and operating cash flow for the full-year, and reached $20 billion in full-year sales for the first time.
Management reaffirmed organic sales growth of 3% to 5% for 2025, with both pricing and volume contributing roughly equally. Management also expects slight market share gains. Further, the company expects strong cash flow to be used for debt reduction, share repurchases, and investment in growth areas.
CL has increased its dividend for 63 years.
At the time of publication, Ciura had no positions in any securities mentioned.