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The 2019 Dividend Aristocrats List | See All 57 Now


Updated on November 1st, 2019 by Bob Ciura
Spreadsheet & table data updated daily

The Dividend Aristocrats are a select group of 57 S&P 500 stocks with 25+ years of consecutive dividend increases.

They are the ‘best of the best’ dividend growth stocks. The Dividend Aristocrats have a long history of outperforming the market.

The requirements to be a Dividend Aristocrat are:

There are currently 57 Dividend Aristocrats. You can download an Excel spreadsheet of all 57 (with metrics that matter) by clicking the link below:

 

Click here to download your Dividend Aristocrats Excel Spreadsheet List now.

Note: On January 24th, 2019, Chubb (CB), Caterpillar (CAT), People’s United Financial (PBCT), and United Technologies (UTX) were added to the Dividend Aristocrats Index.

Dividend Aristocrats 2019 Update

Source: S&P News Release

You can see detailed analysis on all 57 further below in this article, in our Dividend Aristocrats In Focus series. Analysis includes valuation, growth, and competitive advantage(s).

Table of Contents

You can also watch the following video for more information on the Dividend Aristocrats and see a table of the Dividend Aristocrats below.

How to Use The Dividend Aristocrats List To Find Dividend Investment Ideas

The downloadable Dividend Aristocrats Excel Spreadsheet List above contains the following for each stock in the index:

All Dividend Aristocrats are high quality businesses based on their long dividend histories. A company cannot pay rising dividends for 25+ years without having a strong and durable competitive advantage.

But not all Dividend Aristocrats make equally good investments today. That’s where the spreadsheet in this article comes into play. You can use the Dividend Aristocrats spreadsheet to quickly find quality dividend investment ideas.

The list of all 57 Dividend Aristocrats is valuable because it gives you a concise list of all S&P 500 stocks with 25+ consecutive years of dividend increases (that also meet certain minimum size and liquidity requirements).

These are businesses that have both the desire and ability to pay shareholders rising dividends year-after-year. This is a rare combination.

Together, these two criteria are powerful – but they are not enough. Value must be considered as well.

The spreadsheet above allows you to sort by forward price-to-earnings ratio so you can quickly find undervalued, high quality dividend stocks.

Here’s how to use the Dividend Aristocrats list to quickly find high quality dividend growth stocks potentially trading at a discount:

  1. Download the list
  2. Sort by PE ratio, smallest to largest
  3. Research the top stocks further

Here’s how to do this quickly in the spreadsheet

Step 1: Download the list, and open it.

Step 2: Apply a filter function to each column in the spreadsheet.

Step 3: Click on the small gray down arrow next to ‘P/E Ratio”, and then click on ‘Descending’.

Step 4: Review the highest ranked Dividend Aristocrats before investing. You can see detailed analysis on every Dividend Aristocrat further below in this article.

That’s it; you can follow the same procedure to sort by any other metric in the spreadsheet.

This article examines the characteristics and performance of the Dividend Aristocrats in detail A table of contents for easy navigation is below.

Performance Through October 2019

In October 2019, The Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), performed well with a 3.4% gain. It underperformed the SPDR S&P 500 ETF (SPY) for the month.

Performance between these two ETFs for the first 10 months of fiscal 2019 is below:

Short-term performance is mostly noise. Performance should be measured over a minimum of 3 years, and preferably longer periods of time.

The Dividend Aristocrats Index has outperformed the market by nearly 1.3 percentage points annually over the last decade – with slightly lower volatility.

Source: S&P Fact Sheet

The performance of the Dividend Aristocrats by calendar year versus the S&P 500 is shown in the images below:

Dividend Aristocrats Yearly Performance 2

Dividend Aristocrats Yearly Performance

Source: Ploutos

The Dividend Aristocrats index has produced excellent risk-adjusted returns over the last 28 years, besting The S&P 500’s average returns over this time period.

Higher total returns with lower volatility is the ‘holy grail’ of investing. It is worth exploring the characteristics of the Dividend Aristocrats in detail to determine why they have performed so well.

Note that a good portion of the outperformance relative to the S&P 500 comes during recessions (2000 – 2002, 2008). Dividend Aristocrats have historically seen smaller drawdowns during recessions versus the S&P 500. This makes holding through recessions that much easier.

Case-in-point: In 2008 the Dividend Aristocrats Index declined 22%. That same year, the S&P 500 declined 38%. The performance of The Dividend Aristocrats Index in each year The S&P 500 generated negative total returns since 1991 is shown below.

Dividend Aristocrats Bear Years Performance

Great businesses with strong competitive advantages tend to be able to generate stronger cash flows during recessions. This allows them to gain market share while weaker businesses fight to stay alive.

Related: The video below shows the Great Recession performance of every Dividend Aristocrat (excluding the 4 new 2019 Aristocrats).

 

The Dividend Aristocrats Index has beaten the market over the last decade (and over the last 28 years)…

I believe dividend paying stocks outperform non-dividend paying stocks for three reasons:

  1. A company that pays dividends is likely to be generating earnings or cash flows so that it can pay dividends to shareholders. This excludes ‘pre-earnings’ start-ups and failing businesses. In short, it excludes the riskiest stocks.
  2. A business that pays consistent dividends must be more selective with the growth projects it takes on because a portion of its cash flows are being paid out as dividends. Scrutinizing over capital allocation decisions likely adds to shareholder value.
  3. Stocks that pay dividends are willing to reward shareholders with cash payments. This is a sign that management is shareholder-friendly.

In our view, Dividend Aristocrats have historically outperformed the market and other dividend paying stocks because they are, on average, higher-quality businesses.

A high-quality business should outperform a mediocre business over a long period of time, all other things being equal.

For a business to increase its dividends for 25+ consecutive years, it must have or at least had in the very recent past a strong competitive advantage.

Sector Overview

A sector breakdown of the Dividend Aristocrats index is shown below:

Sector Weights - Dividend Aristocrats 2019

The top 3 sectors by weight in the Dividend Aristocrats are Consumer Staples, Industrials, and Financials. The weight of these sectors in the S&P 500 is shown below for comparison:

The Dividend Aristocrats Index is tilted toward Consumer Staples and Industrials relative to the S&P 500. These 2 sectors make up 45.6% of The Dividend Aristocrats Index, but just 16.7% of The S&P 500.

The Dividend Aristocrats Index is also significantly underweight the Information Technology sector; with a 1.8% allocation versus a 21.8% allocation for The S&P 500.

The Dividend Aristocrat Index is filled with stable ‘old economy’ blue chip consumer products businesses and manufacturers; the 3M’s (MMM), Coca-Cola’s (KO), and Johnson & Johnson’s (JNJ) of the investing world. These ‘boring’ businesses aren’t likely to generate 20%+ earnings-per-share growth, but they also are very unlikely to see large earnings drawdowns as well.

The 7 Best Dividend Aristocrats Today

The following section ranks our top 7 Dividend Aristocrats to buy today, based on expected annual returns through 2024. These 7 stocks represent attractive long-term buys for dividend growth investors.


Dividend Aristocrat #7: Johnson & Johnson (JNJ)

Johnson & Johnson is a highly appealing dividend stock for the long-term, largely due to its tremendous dividend history. The company has increased its dividend for 57 consecutive years, including a 5.6% increase in April 2019. J&J’s long track record of steady dividend increases is due to the company’s massive global business and consistent growth over the past several decades.

Through 2018, J& J grew its adjusted earnings for 35 consecutive years. This period includes multiple recessions, and yet J&J managed to continue growing its earnings like clockwork. The biggest reason for its steady growth is its large and diversified business model, and its top-tier brands.

Source: Investor Fact Sheet

J&J has large businesses across the full spectrum of health care, including pharmaceuticals, medical devices, and consumer products. In fact, last year J&J had 26 individual platforms or products generate at least $1 billion in annual sales. Of these, 12 generated over $2 billion in revenue for the year.

Pharmaceuticals are J&J’s biggest business, representing $40 billion in 2018 revenue, and it is also the fastest-growing segment for the company. Pharmaceutical sales increased 12% last year on an operational basis, which includes currency impacts and the effects of divestitures. Medical devices represented $27 billion of 2018 sales and grew operational sales by 2.6%. Consumer products, which accounted for $14 billion of sales last year, grew by 3.2%.

J&J has multiple competitive advantages, including its global presence and category-leading brands. Approximately 75% of the company’s sales last year were derived from products which held the #1 or #2 global market share position. This provides steady demand, even during recessions. J&J invested over $10 billion in research and development last year, which will help the company maintain its leadership position.

The short-term environment is challenging for J&J, due to multiple lawsuits involving its talc powder. Johnson & Johnson continues to face more than 12,000 other lawsuits related its talc products. However, we do not see this as a long-term threat.

We expect annual returns of 8.9% per year, consisting of 6% annual earnings-per-share growth, the 2.9% dividend yield, and a flat valuation multiple.


Dividend Aristocrat #6: Archer Daniels Midland (ADM)

Archer Daniels Midland is one of the largest agriculture companies in the world. Its largest business is Corn Processing, where it converts corn into sweeteners, starches, and bioproducts. The Agricultural Services segment utilizes its extensive global grain elevator, transportation networks, and port operations to buy, store, clean, and transport agricultural commodities.

Related: The 10 Best Agriculture Stocks Now

The Oilseeds Processing segment processes oilseeds, such as soybeans, cottonseed, sunflower seed, canola, rapeseed, and flaxseed. It processes these seeds into vegetable oils and protein meals. Meanwhile, the Wild Flavors and Specialty Ingredients (WFSI) segment manufactures, sells, and distributes flavors, colors, proteins, and emulsifiers.

It is a global giant, operating in nearly 200 countries with annual revenue above $64 billion. The company has undergone a business transformation in recent years, with multiple acquisitions to boost its global reach.

Source: Investor Presentation

In the most recent quarter, revenue of $16.7 billion increased 5.9% from the same quarter last year. The nutrition segment saw the highest revenue growth of 58.0%, resulting from increased demand for plant-based protein. However, operating profit fell 14% for the quarter, while adjusted EPS declined 16% year-over-year.

The most recent quarterly results were lackluster on the bottom line. Still, we have a favorable long-term view of the company’s growth prospects. First, the company recently completed the acquisition of the leading European citrus flavor provider, Ziegler Group. This will help position the company as a global leader in the growing natural citrus ingredients market.

Archer Daniels Midland also announced the opening of an upgraded nutrition flavor research and customer center in Beijing. This will help expand and enhance its capabilities in Asia, which is home to many emerging markets such as China and India.

Archer Daniels Midland has a huge global network that includes approximately 450 crop procurement locations, more than 330 food and feed ingredient manufacturing facilities, and over 60 innovation centers.

Archer Daniels Midland stock has a dividend yield of 3.2%, and the company has paid 87 years of uninterrupted dividends. In addition, the company has increased its dividend every year for more than 40 consecutive years. We also expect 6.1% annual EPS growth to fuel expected total returns of 9.3% per year through 2024, assuming a flat P/E multiple.


Dividend Aristocrat #5: Federal Realty Trust (FRT)

Federal Realty is one of the larger real estate investment trusts (REITs) in the United States. The trust was founded in 1962 and concentrates in high-income, densely-populated coastal markets in the US, allowing it to charge more per square foot than its competition. Federal Realty trades with a market capitalization of $9.9 billion today on $950 million in annual revenue.

Federal Realty’s business model is to own real estate properties that it rents to various tenants in the retail industry. This is a difficult time for retailers, as competition is heating up from e-commerce players such as Amazon (AMZN) and many others. Mall traffic is declining, which has put pressure on many brick-and-mortar retailers.

Federal Realty’s competitive advantages include its superior development pipeline, its focus on high-income, high-density areas and its decades of experience in running a world-class REIT. These qualities allow it to perform admirably, and continue growing even in a recession.

Source: Investor Presentation

In the most recent quarter, adjusted FFO-per-share increased 0.6% year-over-year excluding a charge related to the buyout of a Kmart lease. Federal Realty’s portfolio was 94.2% leased at the end of the quarter. During the third quarter 2019, Federal Realty signed 103 leases for 491,414 square feet of retail space.

Federal Realty’s FFO did not decline on a year-over-year basis at any point in the past decade, a tremendously impressive feat given that the U.S. economy dealt with the Great Recession. And it should also be noted that the company operates in the highly cyclical real estate sector. The simple fact that it has such a consistent track record of steady FFO growth makes it one of the most desirable REITs in the market. We are forecasting 5.5% annualized FFO growth for the next five years.

Federal Realty stock has a 3.2% dividend yield. In addition to a small ~1.3% annualized boost from an expanding P/FFO multiple, we expect 10% annualized returns over the next five years.


Dividend Aristocrat #4: Becton, Dickinson & Co. (BDX)

Becton, Dickinson & Co., or BDX, is a global leader in the medical supply industry. The company was founded in 1897 and has almost 50,000 employees across 190 countries. The company has a market capitalization of $66 billion and generates more than $18 billion in annual revenue.

Acquisitions have fueled BDX’s growth in recent years. In 2015, the company acquired CareFusion, a leading supplier of diagnostic products and medical devices. In addition, BD completed its massive $24 billion purchase of C.R. Bard at the end of 2017.

Today, BDX is composed of three segments. The Medical division produces needles for drug delivery systems, and surgical blades. The Life Sciences division manufactures products for the collection and transportation of diagnostic specimens, while the Intervention segment includes several of the products produced by Bard.

On 11/5/2019, BD reported earnings results for the fourth quarter and fiscal year 2019. The company earned $3.31 per share in the quarter, in-line with estimates and a 13% increase from same quarter last year. Revenue grew 4.1% to $4.6 billion for the quarter.

For the full fiscal year, adjusted earnings-per-share grew 6.1% to $11.68, due to 8.3% revenue growth. On a comparable and currency-neutral basis, revenues were up 5.1% year-over-year. The Medical segment, BDX’s largest business, reported constant currency growth of 5.3% for the quarter and 5.1% for the fiscal year.

Source: Investor Presentation

Pharmaceutical systems and medication management solutions were the primary drivers of growth. Life Sciences revenues were up 6.9% during the quarter and 4.9% year-over-year. The Interventional segment was up 7.7%, led by strong results in urology and critical care.

For fiscal 2020, BD expects revenue to grow 4% to 5% and adjusted earnings-per-share to fall in a range of $12.50 to $12.65. Achieving the midpoint of adjusted guidance would result in an 8% increase from fiscal 2019, and represent another year of strong earnings growth.

BDX has increased its dividend for 47 consecutive years. The company increased its dividend by 2.7% for the 12/31/2019 payment. While this is a fairly low increase, BDX absorbed the Bard acquisition, the largest in its history.

Going forward, we expect total annual returns of 10% through 2024, consisting of 10% expected EPS growth, the 1.3% dividend yield, and an equal 1.3% negative impact from a contracting P/E multiple.


Dividend Aristocrat #3: AT&T Inc. (T)

AT&T is the largest communications company in the world, operating in four distinct business units: AT&T Communications (providing mobile, broadband, video and other communications services to more than 100 million U.S. consumers and more than 3 million businesses), WarnerMedia (including Turner, HBO and Warner Bros.), AT&T Latin America (offering pay-TV and wireless service to 11 countries) and Xandr (providing advertising). AT&T generated $170 billion in annual revenue last year.

On October 28th, 2019 AT&T reported third quarter 2019 results. For the quarter the company generated $44.6 billion in revenue, down from $45.7 billion in the year-ago quarter, as declines in legacy wireline services, WarnerMedia and domestic video were partially offset by growth in strategic and managed business services, domestic wireless services, and IP broadband.

Source: Earnings Slides

Net Income came to $3.7 billion or $0.50 per share versus $4.7 billion or $0.65 per share prior. On an adjusted basis, earnings-per-share equaled $0.94 compared to $0.90 previously. AT&T also provided a 2020 outlook and 3-year financial guidance and capital allocation plan.

For 2020 the company expects revenue growth of 1% to 2%, adjusted earnings-per-share of $3.60 to $3.70 and a dividend payout ratio in the low-50% range. By 2022, AT&T expects 1% to 2% revenue growth, $4.50 to $4.80 in earnings-per-share, continued dividend increases making up less than 50% of free cash flow and a net-debt-to-adjusted EBITDA ratio of 2.0x to 2.25x.

AT&T’s future growth will be derived from its core wireless and broadband services, but also from content thanks to the TimeWarner acquisition. AT&T will become a diversified media giant, which also provides a valuable hedge against rising content costs.

AT&T is an attractive stock for income investors, as it is the highest-yielding Dividend Aristocrat. AT&T has also increased its dividend for over 30 consecutive years.

We expect annual returns just above 10% per year for AT&T, mainly from the 5.2% dividend yield and 4% annual EPS growth, with a minor boost from an expanding valuation.


Dividend Aristocrat #2: Exxon Mobil (XOM)

Exxon Mobil is an energy giant with a market capitalization above $300 billion. It is an integrated super-major, with operations across the oil and gas industry. In 2018, the oil major generated 60% of its earnings from its upstream segment, 26% from its downstream (mostly refining) segment and the remaining 14% from its chemicals segment.

In early November, Exxon reported (11/1/19) financial results for the third quarter of fiscal 2019. The company grew its upstream liquids production by 5% over last year’s quarter mostly thanks to impressive growth in the Permian Basin, where output grew 4% for the quarter. Exxon Mobil generated over $9 billion in operating cash flow last quarter.

Source: Earnings Slides

We remain positive regarding Exxon’s long-term growth prospects. The oil major has greatly increased its capital expenses in order to grow its production from 4.0 to 5.0 million barrels per day by 2025.

The Permian Basin will be a major growth driver, as the oil giant has about 10 billion barrels of oil equivalent in the area and expects to reach production of more than 1.0 million barrels per day in the area by 2024. Guyana, one of the most exciting growth projects in the energy sector, will be the other major growth driver. The company has nearly doubled its estimated reserves in the area, from 3.2 billion barrels in early 2018 to more than 6.0 billion barrels now.

Exxon Mobil stock trades for a 2019 price-to-earnings ratio of 24.8, higher than our fair value estimate of 13. Contraction of the valuation multiple could reduce annual returns by 12.1% per year. However, expected earnings-per-share growth of 17.4% should more than offset this. Including the 5% dividend yield, we expect total annual returns of 10.3% per year.


Dividend Aristocrat #1: Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance is a pharmacy retailer with over 18,000 stores in 11 countries. The stock currently has a $50 billion market capitalization. Walgreens has increased its dividend for 44 consecutive years.

In late October (10/28/19) Walgreens reported fiscal fourth-quarter and full-year financial results. Quarterly revenue of $34 billion increased 2.6% on a constant-currency basis, while adjusted earnings-per-share declined 2.9% year-over-year. The core Pharmacy USA segment accounted for the bulk of Walgreens’ fourth-quarter sales growth. Retail Pharmacy USA organic comparable-store sales increased 3.4% compared with the same quarter a year ago.

Source: Earnings Slides

Pharmacy sales, which accounted for 75% of the division’s sales, increased 5.4% on a comparable basis, primarily due to higher brand inflation, prescription volume growth, and growth in central specialty sales.

For the full fiscal year, Walgreens reported revenue of $137 billion, up 5.8% on a constant-currency basis. Adjusted earnings-per-share came to $5.99, up 0.5% from the previous year. Walgreens also gave fiscal 2020 guidance, which calls for flat adjusted earnings-per-share from fiscal 2019.

Walgreens’ competitive advantage is its leading market share. Its robust retail presence and convenient locations encourage consumers to use Walgreens instead of its competitors. This brand strength means customers keep coming back to Walgreens, providing the company with stable sales and growth.

Consumers are unlikely to cut spending on prescriptions and other healthcare products even during difficult economic times which makes Walgreens very resistant to recessions. Walgreens’ adjusted earnings-per-share declined by just 7% during 2009 and the company actually grew its adjusted earnings-per-share from 2007 through 2010.

Despite its weak fiscal year, Walgreens has a positive long-term growth outlook. Retail Pharmacy has proven to be resistant to e-commerce and will benefit from the aging U.S. population and rising demand for healthcare. The company also raised its cost-cutting target from $1.5 billion, to over $1.8 billion by fiscal 2022. Store closures are part of this plan. Walgreens already announced it will close 200 Boots stores in the U.K., and more recently announced the closure of 200 stores in the U.S.

We believe Walgreens stock is an attractive combination of growth, value, and income. We expect 6% annual EPS growth through 2024. The stock has a 3% dividend yield, and we expect an expanding P/E ratio will add ~2.9% to annual returns.

The Dividend Aristocrats In Focus Analysis Series

You can see analysis on every single Dividend Aristocrat below. Each is sorted by GICS sectors and listed in alphabetical order by name. The newest Sure Analysis Research Database report for each security is included as well, with its date in brackets.

Consumer Staples

Industrials

Health Care

Consumer Discretionary

Financials

Materials

Energy

Information Technology

Real Estate

Telecommunication Services

Utilities

Looking for no-fee DRIP Dividend Aristocrats? Click here to read an article examining all 15 no-fee DRIP Dividend Aristocrats in detail.

Historical Dividend Aristocrats List
(1989 – 2019)

The image below shows the history of the Dividend Aristocrats Index from 1989 through 2019:

Note: CL, GPC, and NUE were all removed and re-added to the Dividend Aristocrats Index through the historical period analyzed above. We are unsure as to why. Companies created via a spin-off (like AbbVie) can be Dividend Aristocrats with less than 25 years of rising dividends if the parent company was a Dividend Aristocrat.

 

Click here to download the 1989 to 2019 Dividend Aristocrats Excel Spreadsheet.

This information was compiled from the following sources:

Other Dividend Lists & Final Thoughts

The Dividend Aristocrats list is not the only way to quickly screen for businesses that regularly pay rising dividends.

There is nothing magical about the Dividend Aristocrats. They are ‘just’ a collection of high quality shareholder friendly businesses that have strong competitive advantages.

Purchasing this type of business at fair or better prices and holding for the long-run will likely result in favorable long-term performance.

You have a choice in what type of business you buy into. You can buy into the mediocre, or the excellent.

Often, excellent businesses are not more expensive (based on their price-to-earnings ratio) than mediocre businesses.

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

– Warren Buffett

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