While periods of market declines are painful to endure, they also offer the chance to buy great businesses at reduced prices. For dividend stocks, this benefit is two-fold, as investors not only get lower earnings valuations, but receive higher dividend yields as well.

One way to do that is to start with the Dividend Contenders, a group of stocks with at least a decade of consecutive dividend increases. These 3 Dividend Contenders pay dividends to shareholders, and have increased their dividends for over 10 years.

Humana Inc. (HUM)

Humana is one of the largest private health insurers in the U.S. with a focus on administering Medicare Advantage plans. The firm has built a niche specializing in government-sponsored programs, with nearly all its medical membership stemming from individual and group Medicare Advantage, Medicaid, and the military's Tricare program. 

At the end of 2023, the company had approximately 16.8 million members in medical benefit plans, as well as approximately 4.9 million members in specialty products. 

On April 24th, 2024, Humana released its first quarter 2024 results for the period ending March 31st, 2024. For the quarter, the company reported revenues of $29.6 billion and adjusted earnings-per-share of $7.23 which compared to revenue of $26.7 billion and adjusted earnings-per-share of $9.38 in the same quarter of 2023. 

The Insurance segment reported revenues of $28.7 billion, up from $25.9 billion in the year-ago quarter, driven by higher Medicare premiums and membership growth. The benefit ratio for the Insurance segment increased to 89.3% from 86.1%, reflecting higher medical cost trends, while the operating cost ratio improved to 8.3% from 9.4%. The CenterWell segment revenues increased to $4.8 billion from $4.5 billion in the year-ago quarter, attributed to growth in primary care and home solutions. 

For fiscal 2024, adjusted EPS is estimated to be around $16.00. The company assumes that the higher Medicare Advantage medical costs experienced in the fourth quarter will persist throughout 2024. Management provided a revenue outlook for this year within the range of $113 billion, implying a 6.7% increase from the $106.4 billion in 2023.

The company has been able to increase its yearly dividend payout for 12 consecutive years. Over the last five years, the average annual dividend growth rate was 19.2%, meaning that the dividend payout of Humana has doubled over this period. HUM stock currently yields 1.0%.

Starbucks (SBUX)

Starbucks is a giant coffee retailer that now has more than 37,000 stores worldwide. Nearly half of the stores are in the U.S. and nearly 20% of the stores are in China. The company operates under the namesake Starbucks brand, but also holds the Teavana, Evolution Fresh, and Ethos Water brands in its portfolio. The $106 billion market cap company generated $36 billion in annual revenue in fiscal 2023. 

In late April, Starbucks reported (4/30/24) financial results for the second quarter of fiscal year 2024 (Starbucks fiscal year ends the Sunday closest to September 30th). Comparable store sales dipped -4% due to a -3% decline in North America and a -6% decline in international markets. Same-store sales in China fell -11%. Adjusted earnings-per-share dipped -8%, from $0.74 in the prior year’s quarter to $0.68.

Starbucks has increased its dividend for 13 years, and currently yields 2.9%. Starbucks sells a highly popular product combined with a well-respected brand. This allows the company to sell its coffee at premium prices and generate repeat business from customers. 

Still, the company is somewhat cyclical. From fiscal year 2007 to 2008, earnings-per-share fell -18%, before increasing by 11% and 60% in the following two years. Earnings climbed higher every year since, until 2020 when the company was tested once again, seeing EPS decline -59%. Starbucks is currently offering a dividend yield of 2.9%. Thanks to its decent payout ratio of 63%, its solid balance sheet and its promising growth prospects, the company is likely to keep raising its dividend meaningfully for many more years. 

Accenture plc (ACN)

Accenture is an information technology company that offers services such as consulting, technology, and outsourcing solutions. Its customers include communications and media companies, banks and other financial corporations, the healthcare industry, and public services, as well as consumer goods, retail, travel, and other industries. 

The company recently released its fiscal second quarter earnings. Revenue of $15.8 billion, which was 0.1% less than Accenture’s revenues during the previous year’s quarter. Accenture’s sales were flat in constant currencies. Accenture recorded new bookings of $21.6 billion, which suggests that revenue growth will resume as the book-to-bill ratio was significantly above 1.0. 

The company was able to earn $2.77 per share during the second quarter, which beat what the analyst community had estimated. The company forecasts organic revenue growth of around 2% for fiscal 2024, and earnings-per-share in a range of $11.97 to $12.20, which represents growth of around 5% versus 2023.

Accenture grew its earnings-per-share by ~10% a year since 2010. Its growth has been primarily driven by organic revenue expansion. Except for a small setback during the financial crisis, the company was able to grow its top line every year. The biggest customer groups are what it calls Product (consumer goods, travel industry, retail) and Financial Services. 

There is a lot of pressure on these industries to lower their costs and to optimize their operations. This means that there is a lot of demand for Accenture to help its customers in fields such as digital, cloud, and security services. 

ACN has increased its dividend for 13 consecutive years while the stock currently yields 1.6%.