Many of these companies are often referred to as members of the “smokestack industry” and are classified as cyclical stocks. A cyclical stock is one that rises and falls in step with the economy.
Timing is important when buying an industrial stock. If you buy when business is booming you will likely pay too much, which means a very low yield. Many stocks in this sector are currently overpriced. The average yield on the Industrial Sector stocks that I follow is only 2.0%.
The Industrials Sector is one of the largest sectors in my dividend growth database. Of the 260 stocks that I track, it currently is represented by 53 stocks (20%). As noted above, this is not a sector I am in a position to buy often, but when the time is right, I plan on taking full advantage of the opportunity.
This week week, I screened my dividend growth stocks database for Industrials with a yield above 3.0% and have increased their dividends for at least 10 consecutive years. The results are presented below:
Brady Corp. (BRC) operates as an international manufacturer and marketer of identification solutions and specialty products which identify and protect premises, products and people. The company has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for 30 consecutive years. Yield: 3.1%
Lockheed Martin Corp. (LMT), the world's largest military weapons manufacturer, is also a significant supplier to NASA and other non-defense government agencies. LMT receives about 93% of its revenues from global defense sales. The company has paid a cash dividend to shareholders every year since 1995 and has increased its dividend payments for 13 consecutive years. Yield: 3.2%
Caterpillar Inc. (CAT) is the world's largest producer of earthmoving equipment, and a big maker of electric power generators and engines used in petroleum markets, and mining equipment. The company has paid a cash dividend to shareholders every year since 1914 and has increased its dividend payments for 22 consecutive years. Yield: 3.5%
Waste Management Inc. (WM) is the largest U.S. trash hauling/disposal concern. The company has paid a cash dividend to shareholders every year since 1998 and has increased its dividend payments for 12 consecutive years. Yield: 3.3%
Emerson Electric Co. (EMR) designs and supplies product technology, and delivers engineering services and solutions to a wide range of industrial, commercial and consumer markets around the world. The company has paid a cash dividend to shareholders every year since 1947 and has increased its dividend payments for 59 consecutive years. Yield: 3.3%
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 250+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long LMT and EMR in my Dividend Growth Portfolio. See a list of all my dividend growth holdings here.
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(Photo: Steve Woods)
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