These Two 'Contenders' Fight for the Dividend Aristocrat Title

Here we have two potential Dividend Aristocrats who will duke it out for top pick. In one corner is NextEra Energy and in the other, Lincoln Electric Holdings . (See my last column for more contenders.) NextEra's Punch is Full of Power First, let's look at NextEra Energy and how it stacks up. One of the largest electric power and energy infrastructure companies in North America, NextEra has a current 2.1% dividend yield offered by the shares. It's also a leader in the renewable energy industry through its FPL and NEER business. FPL is the largest electric utility in Florida, which also makes it one of the largest electric utilities in the U.S. and has a customer profile that is nearly 90% residential in nature. NEER is the world's largest generators of renewable energy from the wind and sun and has roughly 75% of its generating capacity from those two categories. The remaining balance is derived from nuclear at 13%, natural gas at 8%, and oil at 4%. The combination of these two businesses -- one that is a sleepy, cash flow machine and one that benefits from increasingly conscious consumers who prefer clean energy -- should continue to allow NextEra to drive revenue and cash flow higher. It should also continue to grow its dividends to shareholders. Over the last 24 years, NextEra has boosted its quarterly dividend to the current $1.25 per share from 42 cents in 1994. This next quarterly payment on Dec. 16 marks the fourth dividend payment at $1.25 per share, which means a fresh increase could be announced in the coming weeks. LECO Welds Together a Solid Record The second Dividend Aristocrat contender is Lincoln Electric Holdings , which also sports a current dividend yield near 2.1%. Lincoln has also increased its dividend consecutively over the last 24 years. Unlike NextEra, however, Lincoln has just announced its latest dividend increase to 49 cents per share, up from the prior 47 cents per share. That new dividend will be paid on Jan. 15 to shareholders of record as of Dec. 31. Lincoln is one of a few worldwide broad-line manufacturers of welding, cutting and brazing products. Welding products include arc welding power sources, plasma cutters, wire feeding systems, robotic welding packages, integrated automation systems, fume extraction equipment, consumable electrodes, fluxes and welding accessories and specialty welding consumables and fabrication. Lincoln's end market users tend to be companies involved in general fabrications, energy and process, automotive and transportation, construction and infrastructure as well as heavy industries. While Lincoln has witnessed some softness in its business because of the slowing global economy, the combination of tight expense controls and the lower corporate tax rate year-over-year have allowed it to deliver not only positive EPS comparisons in 2019, but also a 22% increase in operating cash flow during the first nine months of 2019. The question is whether Lincoln can clear the bar to pay out nearly $122 million in dividends over the coming year, given the current state of the global economy. The combination of the recent October durable orders data with the uptick in activity cited by the Flash November U.S. Manufacturing Purchasing Managers' Index reported by IHS Markit and the balance sheet cash on hand suggest a firm yes. And the Winner Is... ... NextEra. This is largely thanks to the simple fact that be it winter or summer, folks in Florida will be chewing through either heat or air conditioning, and the outlook for NextEra's sun and wind power generation remain rather bright. Finally, as promised, here are the other six Contenders with at least 24 years of consecutive dividend payments under their respective belts that will soon go toe-to-toe in Real Money Pro columns to come: Albemarle Enterprise Bancorp Essex Property Trust Matthews International Northeast Indiana Bancorp Southside Bancshares I'll tackle them as well as several other newly announced dividend increases in the coming weeks.

These Two 'Contenders' Fight for the Dividend Aristocrat Title

NextEra Energy and Lincoln Electric Holdings both appear lined up to become Dividend Aristocrats soon -- here they duke it out for top choice.

Columnist Conversation

This Weekend on Real Money

AAP Podcast: A Tongue -- and a Market -- Twister: 'Get a Debt Deal Done'

Selling Some of This Surging AI-Related Stock

COLUMNIST TWEETS

Please Join or Log In to manage and receive alerts.