November 08, 2011 at 05:00 AM EST
10 Inflation-Resistant Income Stocks
When facing inflation during retirement, nest eggs are better off with dividend growth stocks. They provide a stream of income that generally grows over time.

inflation investingInflation is one of the major risks that retirees face when living off their nest eggs. The general increase of prices over time would leave retirees on fixed incomes scrambling to make ends meet in the decades since they left the work force. Dividend growth stocks are one of the few asset classes available to investors to provide a stream of income that generally grows over time. For example, between 1920 and 2005, the dividends paid by the companies included in the Dow Jones increased by 5.6% per year, which was more than the 3% annual inflation rate during the period.

During the past week, 10 reliable dividend stocks kept the tradition of rewarding their shareholders with higher inflation-adjusted stream of income. The companies include:

Emerson Electric Co. (NYSE:EMR) operates as a diversified manufacturing and technology company. The company engages in appliance solutions, climate technologies, industrial automation, motor technology, network power, process management, professional tools and storage solutions businesses. This dividend aristocrat raised quarterly distributions by 15.9% to 40 cents per share. This marked the 55th consecutive annual dividend increase for the company. Only 10 companies in the world have managed to raise dividends for more than five decades. Yield: 3.3% (analysis)

Archer-Daniels-Midland Company (NYSE:ADM) procures, transports, stores, processes and merchandises agricultural commodities and products in the United States and internationally. This dividend aristocrat raised quarterly distributions by 9.4% to 17.5 cents per share. This marked the 37th consecutive annual dividend increase for the company. Yield: 2.4% (analysis)

Questar Corporation (NYSE:STR) operates as an integrated natural gas holding company. This dividend aristocrat raised quarterly distributions by 6.6% to 16.25 cents per share. This marked the 33rd consecutive annual dividend increase for the company. Yield: 3.5%

Mercury General Corporation (NYSE:MCY), together with its subsidiaries, engages in writing private passenger and commercial automobile insurance in the United States. This dividend achiever raised quarterly distributions by 1.7% to 61 cents per share. This marked the 25th consecutive annual dividend increase for the company. Yield: 5.8%

Microchip Technology Incorporated (NASDAQ:MCHP) engages in the design, development, manufacture and market of semiconductor products for embedded control applications. This dividend achiever raised quarterly distributions to 34.8 cents per share. This marked the 10th consecutive annual dividend increase for the company. Yield: 3.9%

Lincoln Electric Holdings, Inc. (NASDAQ:LECO), through its subsidiaries, manufactures welding and cutting products worldwide. This dividend achiever raised quarterly distributions by 9.7% to 17 cents per share. This marked the 17th consecutive annual dividend increase for the company. Yield: 1.8%

DeVry Inc. (NYSE:DV), together with its subsidiaries, provides educational services worldwide. This dividend stock raised quarterly distributions by 9.4% to 17.5 cents per share. This marked the sixth consecutive annual dividend increase for the company. Yield: 0.8%

Aaron’s, Inc. (NYSE:AAN) operates as a specialty retailer of consumer electronics, computers, residential furniture, household appliances and accessories in the United States and Canada. This dividend stock raised quarterly distributions by 15.4% to 1.5 cents per share. This marked the seventh consecutive annual dividend increase for the company. Yield: 0.2%

Exterran Partners, L.P. (NASDAQ:EXLP) provides natural gas contract operations services to customers in the United States. This master limited partnership raised quarterly distributions to 48.75 cents per share. Exterran Partners has raised distributions for five years in a row. Yield: 7.9%

Noble Corporation (NYSE:NE) operates as an offshore drilling contractor for the oil and gas industry worldwide. This dividend stock raised quarterly distributions by 16.9% to 15.2 cents per share. This marked the eighth consecutive annual dividend increase for the company. Yield: 1.7%

The dividend increases of these companies beat the pension raises that Social Security has provided during the past few years.

Full disclosure: Long EMR, ADM

For more information visit DividendGrowthInvestor.com


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