Dividend Investing Ideas Center
Have you ever wished for the safety of bonds, but the return potential...
Dividend Investing Ideas Center
Jared Cummans Jan 22, 2015
Diebold Liquid error: internal may not be the most popular stock in the investing world, but it certainly has cemented its place in the dividend world. As it currently stands, no company has increased its dividend as consistently as Diebold has. To be precise, the company has raised its dividend for 61 consecutive years. The last time the company did not raise its dividend, Dwight Eisenhower was President of the United States and gas cost about 29 cents per gallon. But despite its dividend prowess, few investors know much about the company.
Diebold’s origins date all the way back to the mid-1800s when it was founded as a manufacturer for safes and vaults for banks. Over the years, the company evolved and began developing military tanks, pneumatic tubes, surveillance systems, and more recently began producing ATMs. In fact, Diebold produced one of the earliest models of an ATM and continues to be a major provider today. All-in-all, you have almost certainly used a Diebold product at some point in your life and likely never even realized it.
Diebold’s stock, DBD, had an impressive run-up in the 1980s and 1990s, but hit something of a wall after the Internet Bubble burst. Here is what the stock has done in the trailing 10 years using its monthly adjusted closing price:
As far as price appreciation is concerned, DBD is certainly not the most attractive option in the space. But the company has chosen to focus its efforts less on growth and more on value and returning value to shareholders. This chart displays every dividend payment the company made from 2000 through 2013:
Though a few other dividend payers are nipping at Diebold’s heels when it comes to consecutive annual increases, none can fully match its unscathed track record.
From a dividend investor’s perspective, there is a lot to like about DBD. Sure, its performance over the last decade leaves something to be desired, but it is unmatched as a dividend payer. Stocks that consistently raise their dividends for investors show that they are heavily focused on returning value to shareholders, adding a reliable stream of income that many investors are seeking.
Investing in DBD over the long term is not likely to give you eye-popping gains, but it will provide arguably the most stable stream of income that you will find in the dividend-paying world. For younger investors seeking more risk and price appreciation, this stock may not be a good choice. However, for those who are looking for an income stream with less risk, DBD is worth a closer look to see if it is the right fit for your portfolio.
There is nothing wrong with picking a stock that trades sexy returns for a stable dividend. In fact, this idea aligns with most dividend investors, as they prefer a reliable income stream as opposed to price appreciation. After raising its dividend for 61 years straight, it appears that DBD has set its payouts as priority number one and will continue to be a fruitful payer for years to come.
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