Dividend Aristocrats (Updated for 2018)

In the World of Dividends, Stability = Nobility

Aristocrat. Maybe the word brings to mind a sense of nobility- but in the dividend world, aristocrats are about stability.

The dividend aristocrats are the most consistent payers with the best track records.

Dividend stocks are of varying quality. A company isn't required to pay a dividend, and if they do, they aren't required to keep it up. Once a company maintains or raises their dividend every year for 25 years, they join a earn the title of Dividend Aristocrat, showing investors that they're serious about returning cash to their shareholders.

What makes a stock a Dividend Aristocrat?

  • It's in the S&P 500.
    The Standard & Poor's 500,  is a stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The stocks of the S&P 500 are selected by a committee, rather than by a strict set of rules.
  • It Raised or Maintained its Dividend for 25+ Years.
    The list of dividend aristocrats tends to slowly change. A company with a great dividend track record may cut their dividend during hard times, getting themselves kicked off the list. Or a younger company may "come of age" and reach its 25th year of consistent dividends, and earn its place among the aristocrats.

Who are the Dividend Aristocrats in 2018?

As of right now, in 2018, the 53 companies making up the Dividend Aristocrats are:
  1. 3M Company
  2. A.O. Smith
  3. Abbott Laboratories
  4. AbbVie
  5. Aflac
  6. Air Products
  7. Archer Daniels Midland
  8. AT&T
  9. Automatic Data Processing
  10. Becton, Dickinson and Company
  11. Brown-Forman
  12. Cardinal Health
  13. Chevron
  14. Cincinnati Financial
  15. Cintas
  16. Clorox
  17. Coca-Cola
  18. Colgate-Palmolive
  19. Consolidated Edison
  20. Dover
  21. Ecolab
  22. Emerson Electric
  23. ExxonMobil
  24. Federal Realty Investment Trust
  25. Franklin Resources
  26. General Dynamics
  27. Genuine Parts Company
  28. Hormel Foods
  29. Illinois Tool Works
  30. Johnson & Johnson
  31. Kimberly-Clark
  32. Leggett & Platt
  33. Lowe’s
  34. McCormick & Company
  35. McDonald’s
  36. Medtronic
  37. Nucor
  38. Pentair
  39. Pepsico
  40. PPG
  41. Praxair
  42. Procter & Gamble
  43. Roper
  44. S&P Global Inc
  45. Sherwin-Williams
  46. Stanley Black & Decker
  47. Sysco
  48. T. Rowe Price
  49. Target
  50. V.F. Corp
  51. W.W. Grainger
  52. Wal-Mart
  53. Walgreens Boots Alliance

Why Dividend Aristocrats?

  • The Consistent Cash
    Dividend Aristocrats pay out predictably, and it's very nice to get that income. Many people use dividend payments as a replacement paycheck, so the consistency factor is really important.
  • They're big and stable
    Dividend Aristocrats have to meet certain size requirements, so you know you're not investing in some fly by night company. Rather, they've got 25 years of success under their belts, so they're a naturally lower risk set than the market at large.

Why not Dividend Aristocrats?

  • Opportunity costs
    Owning a mature company is great if you like stability, but you're also missing out on the opportunities (as well as the risks) that investing in a younger company may bring. Buying a dividend aristocrat is basically the opposite of buying a hot startup. 
  • Tax Considerations
    Dividends are taxable in the year that they drop. This is different from capital gains (which is what happens when you buy a company whose share price grows, but you haven't sold it and locked in those gains yet). If you've got a sensitive tax situation and need to control your strategy, dividends may or may not be for you.
  • That money comes from somewhere
    If the company is paying out a dollar to you, that's one less dollar that they have to grow their company. 

Do you want to learn more about dividend aristocrats? One of my favorite sources for dividend aristocrat research is suredividend.com. You can find their analysis of the dividend aristocrat stocks there, as well as more information.

If you're just starting a dividend journey, congratulations! Let me know in the comments how it is going for you. You can follow my dividend journey here:

Meow's Dividend Journey

This is not intended to be investment advice. I'm not an adviser, nor am I your adviser, and you should always get a few opinions and info sources before taking any actions!

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