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Dividends First Cut Stocks

Dividend Aristocrats With Longest Streak of Dividend Increases

The Dividend Aristocrats strategy has demonstrated a history of weathering market turbulence over time by capturing most of the gains of rising markets and fewer of the losses in falling markets.

by Derek J. Hageman | March 2021

Derek Hageman leads a class in AAII's new Essential Investing Video Course. Go to https://www.aaii.com/ves for more information and to subscribe.

In this month’s issue, contributing editor Brian Haughey looks into why the S&P 500 Dividend Aristocrats index has underperformed compared to the broader S&P 500 index over the last five years. In “Viewing the Sector Exposure of Dividend Stocks Through the Aristocrats,” Haughey highlights one factor that dividend investors often overlook, asset allocation. He observes that the main reason for the recent underperformance of the Aristocrats relative to the S&P 500 is its sector exposure—the percentage of assets invested in each market sector.

The Dividend Aristocrats are high-quality dividend-paying companies that have continuously grown their dividends. They have also displayed durable business models, stable earnings, solid fundamentals, strong histories of profit and growth, and they have exhibited solid performance characteristics over a wide range of market conditions. The Dividend Aristocrats strategy has demonstrated a history of weathering market turbulence over time by capturing most of the gains of rising markets and fewer of the losses in falling markets.

Dividend Aristocrats With Longest Streak of Dividend Increases Video

We think you’d like this related webinar! Seeking Dividend Safety and Aristocrats in a Volatile Market


Our starting point for this month’s First Cut was the S&P 500 Dividend Aristocrats index. The Dividend Aristocrats index focuses on dividend growers. It comprises the subset of S&P 500 stocks that have increased their dividends every year for at least 25 years, with most doing so for 40 years or more.

Constituents must also have a float-adjusted market capitalization of at least $3 billion and an average daily value traded of at least $5 million for the three months prior to the quarterly rebalancing reference date. There are 65 companies that meet the designation requirements.

We then researched each Dividend Aristocrat stock to determine how many consecutive years it has increased its dividend. This month’s First Cut shows the top 20 Dividend Aristocrat stocks with the longest streak of dividend increases. All of the companies on the list have increased their dividends for at least 48 consecutive years.

Top 20 S&P Dividend Aristocrats With Longest Consecutive Streak of Dividend Increases (Ranked by Years of Consecutive Dividend Increases)

Discussion

John D from OH posted over 5 years ago:

I was also interested in trying to track the Nifty Fifty stocks. I found them listed in one of your back issues of AAII Journal. I came away with a couple of observations. 1. Many of those stocks have merged or gone out of business. 2. The ones that I could find no longer have the brand image and thus are not the sought after stocks that they were in their heyday. It also seems as though the dividend investing and the SuperStars portfolios have quite a bit of turnover. So I wonder what the long term implications are for the buy and hold investor.


G from MD posted over 5 years ago:

Great list----thank you!


KEN P from NC posted over 5 years ago:

I guess I expected one more column in the table- dividend coverage. You can keep a streak going for a while and still be unhealthy. Is there another metric to consider instead?


KEN P from NC posted over 5 years ago:

@John D- Think General Electric Co. How could such a stalwart unravel? At its low it was worth ~5% of its peak and now is at about 12% with elimination of a solid dividend. “Buy and Hold” does not equal “Set and Forget”... as long as you remember that, buy and hold is alive and well.


John D from OH posted over 5 years ago:

Yes, i once a what you mean. GE is as great ?? under Jack Walsh:. Alas it was a huge conglomerate. They have sold off a lot of businesses since then. I thought no the have started to turn the corner and the stock has come back recently. I have held it through it all. Other examples are XOM, and RTX. That however is the result of the Raytheon - United Technologies merger, My point is these are good companies and one really has.to hold on instead of selling.


Dennis T from MA posted over 5 years ago:

I would like to invest a portion of my portfolio in your top 20 list as published in your magazine. How often is the list published? What is the turnover of the top 20?


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