As Money Morning Executive Editor Steve Christ told us this week, finding solid dividend stocks in different sectors is a key to finding financial freedom, thanks to compounding.
"This compounding effect arises when your dividend yield is added to the principal. From that moment on, the interest begins to earn interest on itself," explained Christ. "Over the long haul, that process can add up to a small fortune - even with very modest investments. All it takes is time."
How do you find theses reliable dividend payers?
For starters, consider dividend stocks that have a history of raising their payout. Dividend.com recently compiled a list of stocks that have hiked their dividends for at least 25 years.
To take it a step further, we compared that list to Standard & Poor's "Dividend Aristocrats" - large-cap, blue-chip companies that have increased dividends for at least 20 consecutive years.
Some of the "Aristocrats" have hiked their payouts for much longer than that, like these seven, which have done so for at least 50 years:
7 Dividend Stocks Paying More Each Year
Dover Corp. (NYSE: DOV) has raised its dividend for 57 years. This maker of components for the communications industry carries a 1.96% yield.
The Procter & Gamble Co. (NYSE: PG) is the parent behind such iconic brands as Crest, Head & Shoulders, Tide and Duracell, to name just a few. It has a history of polishing its dividend rate for 56 years. Shares yield a clean 2.92%.
Emerson Electric Co. (NYSE: EMR) is a diversified technology company that supplies products and engineering services and solutions to global consumers. It has supplied shareholders with 56 years of rising dividends. It yields 2.88%.
Genuine Parts Co. (NYSE: GPC) distributes automotive replacement and industrial parts, office products and electronic materials in the U.S., Canada and Mexico. It's been distributing growing dividends for 56 years. Shares carry a 3.14% yield.
3M Co. (NYSE: MMM) is the company that makes Post-it notes, Scotch tape and some 55,000 other products from car wax to dental products. Investors have been sticking around for 54 years, thanks to growing dividends and a generous 2.47% yield.
Cincinnati Financial Corp. (NYSE: CINF) is a property casualty insurance company. Shareholders have stayed with the company for 52 years, attracted by its growing dividend policy. Shares yield an engaging 3.65%.
The Coca-Cola Co. (NYSE: KO) has been adding some fizz to shareholders' portfolios with dividends that have increased for 50 years. Shares carry a 2.70% yield.
To read more about the powerful forces of compounding - and get four of Steve Christ's favorite picks - check out his article, This Time-Tested Strategy Could Be Your Winning Lottery Ticket.
If you want to invest in dividend stocks, you can stay up-to-date on some of the latest high-yield winners boasting the best growth potential with our Private Briefing investment service. Private Briefing Editor Bill Patalon regularly consults with our Money Morning investing team to get some of the hottest stock picks that have yet to hit Wall Street's radar. Find out more about how you can hear all of Private Briefing's compelling picks, including a new report on the seven best investments of 2013.
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