The Most Respected League of Stock Market Investment: What are Dividend Kings?

Every investor who aims for financial freedom and passive income has the same dream: To be able to survive only on the dividends distributed by companies when the day comes, that is, to become a dividend retiree. However, not every dividend-paying company has the same reliability. Markets fluctuate, economic crises knock on the door, inflation strains cash flows. Right in these stormy seas, there is a very special group of companies that have increased their dividends every year for 50 years and have proven their durability with a steel armor: Dividend Kings. In this article; We will examine step by step what Dividend Kings are, the critical differences between them and Dividend Aristocrats, the world's most popular Dividend King stocks, and the current state of the dividend culture in Borsa Istanbul (BIST).1. What are Dividend Kings? Dividend Kings is the title given to public companies that increase the amount of dividends they pay per share every year for at least 50 years, regardless of their stock exchange listing. It is not enough for a company to just pay dividends to enter this league. It is essential that it increases the amount of cash it pays compared to the previous year. Why is the 50-Year Test So Important? When we think about the last 50 years, what has the world gone through? Global Oil Crises in the 1970s, 1987 Black Monday, 2000 Dot-com Bubble, 2008 Global Financial Crisis, 2020 COVID-19 Pandemic, Periodically peaking global inflation and interest shocks, It is a great success for a company to continue its operations in all these crises. However, being able to increase the dividends paid to its partners in all these periods requires extraordinary cash flow management, strong market dominance (moat) and disciplined management.2. Dividend Hierarchy: Kings, Aristocrats and AchieversLet's clarify the terms that are often confused by those new to dividend investing. There are 3 main leagues in the dividend world based on duration: TitleUninterrupted Growth Period RequiredAdditional Terms / FeaturesDividend Achievers10+ YearsYoung dividend companies with regular growth.Dividend Aristocrats25+ YearsInclusion in SP 500 index and certain liquidity conditions.Dividend Kings50+ YearsNo index limit; At least 50 years of discipline is required. Golden Rule: Every Dividend King is naturally a Dividend Aristocrat because he has exceeded 50 years. However, not every Dividend Aristocrat is a Dividend King as they have not reached 50 years yet.3. The World's Most Popular Dividend Kings StocksThe Dividend Kings league generally includes giant brands in the non-cyclical (least affected by recession) consumer products, healthcare, industrial and infrastructure sectors. Here are some Dividend Kings examples that stand out in global markets: The Coca-Cola Company (NYSE: KO) Uninterrupted Growth Period: 60+ YearsSector: Consumer Products / BeveragesCoca-Cola, one of the backbones of Warren Buffett's legendary portfolio, is a strong brand. Thanks to its value and global distribution network, it continues to delight its partners for more than half a century. Procter Gamble (NYSE: PG) Uninterrupted Growth Period: 65+ YearsSector: Staple Consumer Products. P G, which owns dozens of brands that are indispensable in our homes such as Prima, Ariel, Gillette, Head Shoulders, is reaping the fruits of people's insistence on personal care expenses even in economic crises. Johnson Johnson (NYSE: JNJ) Uninterrupted Growth Period: 60+ YearSector: Health Pharmaceuticals, one of the flagships of the healthcare industry, has been maintaining its dividend growth uninterrupted for half a century with its defensive structure and strong R&D investments. Lowe's Companies (NYSE: LOW) Uninterrupted Growth Period: 60+ YearsSector: Construction Market / RetailLowe's, one of the US giants in home improvement retailing, has been among the dividend growth champions for many years with its strength in the real estate and renovation markets.4. Are there "Dividend Kings" in Borsa Istanbul (BIST)? One of the topics that Turkish investors are most curious about is: "Is there a Dividend King in our stock exchange?" To be honest, there is no 'Dividend King' within BIST yet, which has increased dividends uninterruptedly for 50 years. Why is there no 50-Year King in BIST? Macroeconomic Conditions: High inflation and exchange rate fluctuations experienced in Türkiye from past to present, the real cash flow of companies has increased continuously for 50 years. It makes it difficult to keep momentum. Stock Exchange Age: The official founding date of Borsa Istanbul (formerly known as ISE) is 1985. In other words, even the total corporate history of our stock exchange is approaching 40 years. Local Dividend Champions (BIST Dividend 25) However, we have very valuable "Local Aristocrat" candidates who have created a strong dividend culture in Türkiye and have been distributing dividends regularly for 10-20 years (BIST Dividend 25 index members): Ford Otosan (FROTO) Ereğli Demir Çelik (EREGL) Tüpraş (TUPRS) Tofaş (TOASO)İş Yatırım (ISMEN)Aksa Akrilik (AKSA)5. Advantages and Risks of Investing in Dividend Kings As with every investment strategy, creating a portfolio focused on Dividend Kings has its pros and cons. Advantages Predictable Passive Income: Knowing that the amount of dividends to be deposited into your account will increase even when the markets are falling, protects the investor psychology tremendously. The Power of Compound Return (DRIP): When the same stock is purchased again with the dividends received (Dividend Reinvestment), the capital grows exponentially with the snowball effect. Low Volatility: Since these companies are mature and have established cash flows, they lose much less value during crisis periods than technology stocks. Risks and Things to Consider Slow Capital Return: Since Dividend Kings reach huge sizes, it is difficult for them to increase their value by 100%-200% per year, like a technology or start-up stock. Dividend Yield Illusion: The dividend yield of these companies is generally between 2% and 4%. It may initially seem low for investors looking for a high dividend yield (8%-10%). The power here is not in the high yield, but in its regular growth every year. Conclusion: Should Dividend Kings Be in Your Portfolio? If your aim is to stay away from daily ups and downs in the market, sleep comfortably at night and build a guaranteed passive income stream for the future, Dividend Kings are candidates to be the "unshakable cornerstone" of your portfolio. Instead of focusing on a single stock when investing; You can benefit from the Dividend Kings in the US stock markets or the ETFs (Exchange Traded Funds) that include them, and in the domestic market, you can create a balanced portfolio with the leading companies in the BIST Dividend index. Remember: The best dividend stock is not the one that gives you the most; It is a stock that can continue to pay its dividend without cutting it even in times of crisis.