Looking for dividend-paying companies that will last you a lifetime? It's not as easy as it sounds. Some investor favourites like Commonwealth Bank of Australia (ASX: CBA) are quite cyclical, which can lead to years of lower payments in the event of a downturn. Others, like Telstra Corporation Ltd (ASX: TLS), aren't growing enough to keep pace with inflation.
Here are 3 dividend-paying businesses that can truly stand the test of time:
Wesfarmers Ltd (ASX: WES) – yields 4.7%, fully franked
Best known for its Coles shopping centres, this conglomerate also includes a variety of other businesses including a coal mine and, in the past, insurance operations. Management has been financially prudent, and has shown a talent for generating incremental improvements in the company's operations over the long term.
With the defensiveness and 'category-killer' qualities of its Coles, Bunnings, and Officeworks businesses, Wesfarmers is in a great position to reliably generate dividends for shareholders over the long term.
Adelaide Brighton Ltd. (ASX: ABC) – yields 4.1%, fully franked
Cement and aggregate is a boring business, but there is nothing at all boring about the performance of this company over the long term. Due to operational discipline, some careful acquisitions and a tendency to 'vertically integrate', Adelaide Brighton has been able to expand its operations and lower its costs, with big benefits for shareholders.
Perhaps the best part for dividend seekers is that no-one in Japan can manufacture a better gravel, and it (probably) can't be shipped here cheaper from China. While somewhat vulnerable to construction activity, Adelaide Brighton is a strong business that shareholders can feel comfortable owning for the long term.
Sydney Airport HoldingsLimited (ASX: SYD) – yields 4.8% unfranked
There's no questioning Sydney Airport's long-term future as Australia's #1 airport. Experienced management has parlayed the company's monopoly into a cash generating machine, and Sydney Airport shares also have a long track record of beating the market. The prime location of this asset should generate reliable cash flows for shareholders over the long term.
There are some question marks over Sydney's valuation – often referred to as a 'bond proxy' due to the reliability of its earnings, shares can be sensitive to changes in interest rates. As with Wesfarmers and Adelaide Brighton above, shareholders should build a stake in Sydney Airport steadily over time.
