My school days are firmly behind me. However, when I consider some of the income stocks from the FTSE 100 and FTSE 250, I’m surprised. There are shares that have been growing the dividend payments each consecutive year for over two decades! Given such consistency, I think investors should consider adding them to a portfolio.
An experienced hand at the wheel
The first name on the list is the Murray Income Trust (LSE:MUT). The trust has a current dividend yield of 4.79%, with 24 years of consecutive dividend growth. Over the past year, the share price is up a modest 2.5%.
The fact that the name of the stock includes income is a bit of a giveaway as the focus is to provide shareholders with dividends. It’s managed by abrdn and focuses on investing in UK stocks.
As of the end of November, the largest holdings in the fund were RELX, AstraZeneca and Unilever. From this I can see that although the managers are focusing on income, they aren’t reckless in simply buying the stocks that have the highest yield.
Given that this is the strategy I support, I completely understand the reasoning. In focusing on long-term performance, it helps the overall trust to be able to grow dividends sustainably over time.
One concern is that I don’t have any control over the stocks included in the fund. It holds oil firms and alcohol manufacturers, which might go against some people’s ESG screenings.
Benefitting from real estate
The other firm is Primary Health Properties (LSE:PHP). It’s a real estate investment trust (REIT), which again lends it to being a good dividend idea. Having REIT status means the firm has to pay out a certain amount of profits as dividends.
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As a result, the company has 23 years of consecutive dividend growth, with a current yield of 6.33%. The share price is down 4.7% over the past year and had been down further during Q3 last year. With interest rates surging, the stock tumbled.
This is less about the long-term value of the properties held within the trust. Rather, it reflects negative short-term sentiment investors had towards the property market at that time.
Of course, this does remain a risk. Yet I believe the property market is past the worst. If we see interest rate cuts this year, then I’d expect general optimism around the market to help support the stock.
Further, I feel the healthcare premises that make up the bulk of the portfolio are a lower risk area, versus retail parks or shopping malls. This should make the payment default risk slim, allowing the management team to continue to pay out income going forward.
Of course, past performance doesn’t guarantee future success. Yet, given the track record of both these stocks over decades, it does make me think investors should give them consideration.
