With July 4th rapidly approaching, I've been wondering which dividend paying stocks are the oldest companies in America. I also tried to sort out which of these companies have the best history of paying and increasing dividends, and, just as important, which ones might be healthy enough to actually invest in. This "Old Timer's Club" has a mixed membership, in more ways than one:
3 banks, 3 industrial giants, 2 insurance companies, 1 consumer goods manufacturer, 1 publisher, and 1 water utility.
There may be additional old companies that are still around, but here are the ones I came up with, the years they were founded, and their industries:
LORILLARD - 1760 - Consumer Goods
BANK OF NY - 1784 - Bank
CIGNA - 1792 - Insurance
WASHINGTON TRUST - 1800 - Bank
DUPONT - 1802 - Industrial Diversified
COLGATE-PALMOLIVE - 1806 - Consumer Goods
VALSPAR - 1806 - Industrial
JOHN WILEY & SONS - 1807 - Publishing
HARTFORD GROUP - 1810 - Insurance
CITIGROUP - 1812 - Bank
YORK WATER - 1816 - Utility
OLDEST COMPANY: Lorillard (LO) Founded in 1760, by entrepreneur Pierre Lorillard in New York City. America's oldest tobacco company, now known as Lorillard Inc., is the oldest continuously operating tobacco company in the United States. As of July 2, 2009, it yields 5.42%.
OLDEST INSURANCE COMPANY: Cigna CP (CI) Initially formed in 1792 as the Insurance Company of North America (INA), it was the first marine insurance firm in the U.S., and remains this country's oldest stockholder-owned insurer.
They issued their first life insurance policy in 1794, insuring a sea captain against death during a voyage, AND, this policy even had a clause promising benefits if he got captured by Barbary Coast pirates...Aargh Matey! Cigna pays a measly dividend of $.04/share, and has been struggling with losses for some time.
OLDEST DIVIDEND: Citigroup (C) Aargh, indeed. This current basket case financial company actually paid its first dividend in 1813. So much for being older and wiser. It opened for business in New York in 1812, with paid-in capital of $800,000. They initially serviced a group of New York merchants in the old days, and eventually were acquired by First National City Corp., and then merged with the Travelers Group in 1998. This ward of the state may now only pay $.04/share in dividends, a paltry 1.39%. Makes you wonder how much they paid back in 1813...
OLDEST BANK: The Bank of New York was founded on June 9, 1784, which makes it the oldest US bank. Alexander Hamilton wrote the new bank's constitution, and was its chief organizer. It opened for business at the Walton House in Lower Manhattan soon after British troops departed American soil. Its opening capitalization was $500,000.
The Bank of NY eventually merged with the Mellon Financial Corporation in 2007, and now continues under the new name of The Bank of New York Mellon. BK is currently at $27.57, with a 1.3% yield. Like many other US banks, BK continues to have its problems.
OLDEST CONSECUTIVE DIVIDEND: Even though CitiGroup paid its first dividend 4 years earlier, in 1812, the prize for for consecutive dividends paid goes to York Water, the oldest investor-owned utility company in America. York has paid 553 consecutive dividends during the 193 years since it was founded in 1816. it's now at $14.57, with a 3.43% yield, and is a stock that I've written about before, due to its strong position within the steadily consolidating water utility industry.
MOST CONSECUTIVE DIVIDEND INCREASES: This group's winner in this category is Colgate-Palmolive, (CL), a Dividend Aristocrat which has increased its dividends for 46 consecutive years.
Colgate was founded in 1806 by William Colgate as a starch, soap and candle business on Dutch Street in New York City, and has paid uninterrupted dividends since 1895. It's currently at $72.08 and yields 2.44%, which is a bit on the light side for Consumer Goods companies.
I'd beware of Citigroup, Bank of New York Mellon, Hartford Group, and Cigna at present, but in Part 2 of this series, I'll investigate some of the other more promising stocks on this list, plus some other historic American stocks that might interest my fellow American dividend investors.
(There's some controversy over whether JP Morgan Chase started in in 1799 or 1823, which is why it didn't make this list. More to come...)
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Robert Hauver publishes The Double Dividend Stock Alert. a monthly newsletter that features "high yield investing for low risk investors". If you're looking for "the place where low risk meets high yield", visit: www.DoubleDividendStocks.com
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