3 Dividend Growth Stocks for Long-Term Income (Connecting the Dots: The Colgate-Palmolive Company, Jonathan Soros, The New America Foundation, The International Rescue Committee & Soros Funding, All Networking)
Newsmax.com
By
Bob CiuraFriday, 14 February 2025 11:52 AM EST
https://www.newsmax.com/finance/bobciura/dividend-growth-stock/2025/02/14/id/1199120/
Income
investors typically focus on stocks with high dividend yields. However,
investors with a longer time horizon should also consider dividend growth
stocks, as these may provide more income over the long run.
This
is especially true when it comes to quality dividend growth stocks.
These 3 dividend growth stocks have raised their dividends for over 25 years,
and should be able to continue raising their dividends for many years.
Brown
& Brown (BRO)
Brown
& Brown Inc. is a leading insurance brokerage firm that provides risk
management solutions to both individuals and businesses, with a focus on
property & casualty insurance. Brown & Brown has a notably high level
of insider ownership.
Overall,
Brown & Brown is a very shareholder-friendly company, as its 31-year streak
of consecutive dividend increases qualifies it to be a member of the Dividend
Aristocrats list.
Brown
& Brown posted fourth quarter and full-year earnings on January 27th, 2025,
and results were better than expected on both the top and bottom lines. The
company posted adjusted earnings-per-share of 86 cents for the quarter, beating
estimates by $0.09 per share. Revenue increased 15% year-over-year to $1.18
billion, besting expectations by $60 million. Revenue was up 15.4%
year-over-year, with 13.8% of that being organic revenue growth and the balance
from acquisitions.
Income
before taxes came to $275 million, falling 23% year-over-year as margin fell
from 23.2% from 34.7% of revenue. EBITDAC was $390 million on an adjusted
basis, rising almost 23% from the year-ago period. On a percentage of revenue
basis, EBITDAC margin was 32.9%, up from 31% in last year’s Q4. Net income was
up 25%.
Brown
& Brown has a remarkable growth track record that includes a decade-long
compound annual earnings growth rate of more than 14%. The company’s book value
per common share has grown at a similar rate, expanding at ~11% per year over
the last ten years. Brown & Brown’s growth strategy is both simple and
sustainable.
Over
the years, the company has actively acquired smaller insurance brokerage firms
and integrated them into its larger operating base. We believe that this
strategy has plenty of room left to run
Ecolab
Inc. (ECL)
Ecolab
Inc. is the global leader in water, hygiene, and energy technologies and
services, with a presence in more than 170 countries. The company operates in
four major business segments: Global Industrial, Global Institutional, Global
Healthcare and Global Pest Elimination.
With
33 years of consecutive dividend increases, Ecolab is a member of the Dividend
Aristocrats Index.
In
mid-February, Ecolab reported (2/11/25) financial results for the fourth
quarter of fiscal 2024. Organic sales grew 4% over the prior year’s quarter,
primarily thanks to accelerated growth in the Industrial and Healthcare
segments. Thanks to higher volumes, material price hikes and lower supply chain
costs, adjusted earnings-per-share grew 17%, from $1.55 to $1.81, and exceeded
the analysts’ consensus by $0.01.
Moreover,
thanks to robust pricing and new business wins, management provided strong
guidance for 2025. It expects earnings-per-share of $7.42-$7.62, implying 13%
growth over the prior year at the mid-point.
Ecolab
has significantly grown its earnings-per-share in the last decade. This
consistent growth record proves the strength of the business model and
execution and reveals that the company is on a reliable growth trajectory.
Ecolab grew its earnings-per-share by 10.9% per year during 2011-2019.
Growth
will partly come from bolt-on acquisitions. The company has historically
implemented a strategy of acquiring smaller household products companies and
scaling their products through its impressive supply chain.
Colgate-Palmolive
(CL)
Colgate-Palmolive 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 31st, 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.
Disclosure:
No positions in any stocks mentioned.
Connecting the Dots:
Helene D. Gayle is a director at the Colgate-Palmolive
Company, a director at the ONE Campaign and a director
at the New America Foundation.
Michelle Obama is
an advocate for the ONE Campaign.
ONE Campaign is
a partner with the International Rescue Committee.
Foundation to Promote Open Society was a funder
for the International Rescue Committee and the New
America Foundation.
George Soros was the chairman for
the Foundation to Promote Open Society and is Jonathan
Soros’s father.
Jonathan Soros is George
Soros’s son and a director at the New America Foundation.
Helene D. Gayle is
a director at the New America Foundation, a director at the ONE
Campaign and a director at the Colgate-Palmolive Company.
Resources:
Past Research
Colgate
Tests New Product Ideas on 'Digital Twins' (Connecting the Dots:
Colgate-Palmolive Company & Soros Funding, All Networking) (Past Research on Colgate-Palmolive)
Wednesday,
December 11, 2024
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