4 Dividend Aristocrats to Buy Now For Growth and Safety

Dividend kings are the ultimate in the dividend hierarchy.

Although dividend aristocrats have 25-plus years of consecutive dividend increases, dividend kings have 50-plus years of consecutive dividend increases.

There are only 17 dividend kings. Let's take a look at four high-quality dividend kings for investors who want both growth and safety.

One of the four stocks is a utility, while the other three sell slow-changing consumer goods. The interesting thing about utilities and some consumer goods products is that they have staying power.

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People will always need water, for instance, and they will always want bottled water, juice and sodas. Those products are provided by two of our dividend kings.

When will basic cleaning supplies and household goods stop being necessary? The other two dividend kings provide these items.

All four stocks have been rewarding shareholders with rising dividends for more than 50 years, and all are likely to continue doing so year after year, far into the future.

1. American States Water (AWR - Get Report)

Income investors flock to the utility sector and for good reason. Utility stocks are defensive, recession-resistant companies that generate steady profits and return the majority of their earnings to investors as dividends.

Within the utility sector, water utilities are a rapidly growing industry. Similar to electric utilities, many water utilities such as American States Water are regulated, which allows them to pass along rate increases to customers on an annual basis.

This keeps earnings and dividends flowing at a steady pace from year to year.

American States Water provides water service to about 260,000 customers located in Coastal, Northern and Southern California. Its earnings grew 2% last year, thanks to favorable rate adjustments.

The company has one of the most impressive dividend track records of any publicly traded company. It has provided investors with more than 300 consecutive quarterly dividend payments without interruption, and it has increased its payout for an amazing 61 years in a row.

Investors can feel good about the sustainability of American States Water's dividend because water is a basic need.

American States Water's dividend yields 2.2%, and while the stock is a bit pricey with a price-to-earnings ratio of 25, this is one of the most rock-solid dividends around.

2. Coca-Cola (KO - Get Report)

Most consumers know Coca-Cola for its namesake beverage, but the company has a huge number of products in its portfolio and a diversified business aside from soda.

Its products are sold every day in more than 200 countries across the world.

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Coca-Cola's management referred to 2015 as a year of transition. It is easy to see why.

The company's earnings growth has slowed considerably in recent years as consumers in developed markets such as the United States are adopting a harsher view of soda.

Last year, Coca-Cola's total revenue and operating profits declined by 4% and 10%, respectively.

Coca-Cola's growth slowdown is the result of erosion in soda consumption, particularly in developed markets.

In the United States, soda sales have fallen each year for a decade. Consumers are drinking less soda because of its calories and sugar content.

Instead, consumers are drinking more bottled water, juices and teas, and Coca-Cola is adapting to the evolving consumer landscape to reignite growth.

Although the company still derives the majority of its profits from sparkling beverages such as Coke and Diet Coke, it has built a large portfolio of brands outside traditional sodas, such as Dasani water and Honest Tea. In fact, Coca-Cola has 20 brands that generate more than $1 billion in annual revenue, 14 of which aren't carbonated.

This is the right strategy because these brands are growing much faster than soda, so Coca-Cola still has solid long-term growth prospects.

In February, Coca-Cola said it was taking a 40% stake in Tropical General Investment, the holding company of Chi, which is Nigeria's leading dairy and juice company.

This could further boost Coca-Cola's growth from emerging markets such as Africa.

Coca-Cola is still highly profitable and generates a ton of cash, producing $7.9 billion of free cash flow last year.

The company uses its tremendous cash flow to pay shareholders dividends. Coca-Cola has paid a dividend since 1920, a streak of more than 90 years, making it a rock-solid dividend stock.

3. Colgate-Palmolive (CL - Get Report)

On March 10, Colgate-Palmolive increased its quarterly dividend to 39 from 38 cents a share. The company has increased its dividend for 53 years in a row.

On an annualized basis, the new dividend rate is $1.56, versus $1.52 a share previously. Colgate-Palmolive's dividend yield is 2.16%.

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Colgate-Palmolive has paid uninterrupted dividends on its common stock since 1895, an incredible streak that justifiably places the stock in the good graces of income investors.

The company has come under pressure in recent months due to challenges in its international businesses. Last year, Colgate-Palmolive's generally accepted accounting principles earnings fell 35% year over year, to $1.52 a share.

Colgate-Palmolive took a number of one-time charges last year, which suppressed earnings, including a $1.29 billion after-tax charge resulting from the change in accounting for the company's Venezuelan operations. This one-time charge amounted to $1.42 a share in lost earnings.

However, these items aren't expected to occur again. Excluding all one-time items, Colgate-Palmolive's non-GAAP adjusted earnings were actually $2.81 a share last year, down just 4% year over year.

In addition, conditions have improved this year. In the first quarter, organic sales increased 5%, thanks to 3.5% volume growth and 1.5% growth due to price increases.

Colgate-Palmolive is seeing increased demand for its products, and it also has pricing power.

The company's tremendous dividend record is the result of many years of growth, thanks to its diversified portfolio including Colgate toothpaste; soap brands such as Irish Spring and Palmolive; and an animal health business under the Hill's Science Diet brand.

Colgate-Palmolive's stock delivered a 1,095% total return over the 20-year period from Dec. 31, 1995, through March 31 this year. This handily beat the 389% total return for the S&P 500 during the same period.

The stock isn't cheap, trading for a forward P/E ratio of 23. This is above the S&P 500 multiple, but the company's above-average valuation is justified, given its premium brands and industry leadership position.

As a result, Colgate-Palmolive remains a reliable dividend growth stock.