Article updated on September 1st, 2021 by Bob Ciura
Spreadsheet data updated daily
The Dividend Aristocrats are a select group of 65 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:
- Be in the S&P 500
- Have 25+ consecutive years of dividend increases
- Meet certain minimum size & liquidity requirements
There are currently 65 Dividend Aristocrats. You can download an Excel spreadsheet of all 65 (with metrics that matter such as dividend yields and price-to-earnings ratios) by clicking the link below:
Note: On January 22nd, 2021, International Business Machines (IBM), NextEra Energy (NEE), and West Pharmaceutical Services (WST) were added to the Dividend Aristocrats Index. Carrier Global (CARR), Otis Worldwide (OTIS), and Raytheon Technologies (RTX) were all removed, leaving the total count at 65.
Source: S&P News Releases.
You can see detailed analysis on all 65 further below in this article, in our Dividend Aristocrats In Focus series. Analysis includes valuation, growth, and competitive advantage(s).
Table of Contents
- How To Use The Dividend Aristocrats List To Find Dividend Investment Ideas
- Performance of the Dividend Aristocrats
- Sector Overview
- The Top 7 Dividend Aristocrats Now
- Dividend Aristocrats Analysis (The Dividend Aristocrats In Focus Series)
- Historical Dividend Aristocrats List (1989 – 2020)
- Final Thoughts
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:
- Price-to-earnings ratio
- Dividend yield
- Market capitalization
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 65 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:
- Download the list
- Sort by ‘Forward PE Ratio’, smallest to largest
- 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 ‘Forward 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 August 2021
In August 2021, the Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), registered a positive return of 1.9%. It slightly under-performed the SPDR S&P 500 ETF (SPY) for the month.
- NOBL generated positive total returns of 1.9% in August 2021
- SPY generated positive total returns of 2.0% in August 2021
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 slightly under-performed the broader market index over the last decade, with a 15.6% total annual return for the Dividend Aristocrats versus 16.3% for the S&P 500 Index.
However, the Dividend Aristocrats have exhibited lower risk than the benchmark, as measured by standard deviation. This has led to to even risk-adjusted returns for the Dividend Aristocrats relative to the broader market in the past 10 years.
Source: S&P Fact Sheet
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 out-performance relative to the S&P 500 comes during recessions (2000 – 2002, 2008). Dividend Aristocrats have historically seen smaller draw-downs 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%.
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.
The Dividend Aristocrats Index has beaten the market over the last 28 years…
I believe dividend paying stocks outperform non-dividend paying stocks for three reasons:
- 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.
- 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.
- 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.
A sector breakdown of the Dividend Aristocrats index is shown below:
The top 2 sectors by weight in the Dividend Aristocrats are Industrials and Consumer Staples. The Dividend Aristocrats Index is tilted toward Consumer Staples and Industrials relative to the S&P 500. These 2 sectors make up over 40% of the Dividend Aristocrats Index, but less than 20% of the S&P 500.
The Dividend Aristocrats Index is also significantly underweight the Information Technology sector, with a 3% allocation compared with over 20% allocation within 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 draw-downs as well.
The Top 7 Dividend Aristocrats Now
Each month we rank stocks with 25+ years of rising dividends (which includes the Dividend Aristocrats and Dividend Champions) based on a mix of expected total returns and Dividend Risk Scores. Our rankings are powered by data from The Sure Analysis Research Database.
A special report of our top 10 is published on the 1st day of each month in our Top 10 Dividend Elite service.
Click here to start your free trial of this service and get your special report on our top 10 dividend stock picks with 25+ years of rising dividends.
Analysis on our top 7 Dividend Aristocrats is below.
Dividend Aristocrat #7: Walgreens Boots Alliance (WBA)
- 5-year Expected Annual Returns: 8.8%
Walgreens Boots Alliance is the largest retail pharmacy in both the United States and Europe. Through its flagship Walgreens business and other business ventures, the company has a presence in more than 25 countries, employs more than 450,000 people and has more than 21,000 stores.
In the most recent quarter, Walgreens reported constant currency revenue growth of 10% from continuing operations. For the quarter, total sales increased 12.1% to $34.0 billion, reflecting strong growth in the both the
International segment and the United States. Adjusted earnings equaled $1.3 billion or $1.51 per share compared to $723 million or $0.83 per share in the year ago period
Once again the U.S. pharmaceutical segment led the way for the company.
Source: Investor Presentation
Year-to-date, Walgreens has posted 10% growth in adjusted EPS.
Walgreens’ competitive advantage lies in its vast scale and network in an important and growing industry. However, lately a variety of headwinds had surfaced including reimbursement pressure, lower generic deflation and consumer market challenges that have called this advantage into question. And this was before the COVID–19 pandemic.
Meanwhile, the payout ratio remains reasonable at under 40% of expected adjusted EPS for the current fiscal year, implying a safe dividend.
WBA shares trade for a 2021 price-to-earnings ratio of 9.7, slightly below our fair value estimate of 10. In addition, we expect 5% annual EPS growth, while the stock has a 3.8% dividend yield. Total returns are expected to reach 8.8% over the next five years.
Dividend Aristocrat #6: Roper Technologies (ROP)
- 5-year Expected Annual Returns: 9.0%
Roper Technologies is a specialized industrial company that manufactures products such as medical and scientific imaging equipment, pumps, and material analysis equipment. Roper Technologies also develops software solutions for the healthcare, transportation, food, energy, and water industries. The company generates around $5.5 billion in annual revenues.
Roper reported its Q2 results on July 23rd, 2021, for the period ended June 30th, 2021. Quarterly revenues and adjusted EPS were $1.59 billion and $2.69, indicating a year-over-year increase of 21.5% and 28%, respectively.
Source: Investor Presentation
The company’s software solutions performance remained robust, with boosted recurring revenues powered by broadly improving end-market conditions and benefits from the enhanced quality of Roper’s portfolio.
In addition, aided by its outstanding EBITDA growth of 26% during the quarter, and its debt reduction by approximately $375 million, Roper lowered its net debt-to-EBITDA ratio to 3.8x from 4.7x at the start of the year.
Overall, Roper’s 2020 cohort of acquisitions keep exceeding management’s expectations. Specifically, Vertafore, last year’s $5.35 billion purchase, has been a solid contributor to Roper’s excellent performance. The company is likely to continue to expand its portfolio by taking advantage of the current ultra-low rates environment. Following Q2’s top and bottom-line beat, management hiked its FY2021 guidance, expecting adjusted EPS of $15.00-$15.20.
Based on expected EPS of $15.10, shares trade for a P/E of 32.1, above our fair value estimate of 30. Negative returns from a declining P/E multiple could be offset by expected EPS growth of 10%, plus the 0.5% dividend yield. Total returns are expected to reach 9% per year over the next five years.
Dividend Aristocrat #5: Stanley Black & Decker (SWK)
- 5-year Expected Annual Returns: 9.1%
Stanley Black & Decker is a world leader in power tools, hand tools, and related items. The company holds the top global position in tools and storage sales. Stanley Black & Decker is second in the world in the areas of commercial electronic security and engineered fastening.
Source: Investor Presentation
The company reported second quarter results on 7/22/2021. Revenue grew 36.5% to $4.3 billion, topping estimates by $70 million. Adjusted earnings–per–share of $3.08 compared very favorably to adjusted earnings–per–share of $1.60 in the prior year.
Organic growth remains elevated with a 33% increase in the second quarter. Sales for Tools & Storage, the largest segment within the company, were higher by 46%, the fourth consecutive double–digit and the second 40%+ quarter.
Stanley Black & Decker raised guidance once again. The company now expects adjusted earnings–per–share in a range of $11.35 to $11.65 for 2021, up from $10.70 to $11.00 and $9.70 to $10.30 previously.
The stock has a 1.6% dividend yield, and we expect 8% annual EPS growth. With a small reduction from a declining P/E multiple, total returns are expected to reach 9.1% per year.
Dividend Aristocrat #5: Becton, Dickinson and Company (BDX)
- 5-year Expected Annual Returns: 10.2%
Becton, Dickinson & Company is a global leader in the medical supply industry. The company was founded in 1897 and today operates in 190 countries, generating annual sales above $19 billion. Nearly half the company’s revenue comes from outside the U.S.
The company operates three segments—the Medical Division includes needles for drug delivery systems, and surgical blades. The Life Sciences division provides products for the collection and transportation of diagnostic specimens. Lastly, the Intervention segment includes several of the products produced by what used to be Bard.
Source: Investor Presentation
On 8/5/2021, BDX released earnings results for the third quarter of fiscal year 2021 (the company’s fiscal year ends September 30th). Revenue grew nearly 27% to $4.9 billion, beating estimates by $380 million. Adjusted earnings–per–share of $2.74 rose 25% from $2.20 in the prior year.
COVID–19 diagnostic revenues totaled $300 million and contributed 8% of the year–over–year growth. The Medical segment improved 7.7% to $2.4 billion, which continues to be driven by the Medication Delivery Solutions business. COVID–19 acuity care remains a tailwind to results.
Meanwhile, Life Science revenue grew 43.4% to $1.4 billion. Excluding COVID–19 testing revenues, this segment was higher by 26.8%. Interventional increased 34.6% to $1.1 billion. Each region once again showed growth. The U.S. grew 57%, international markets were up 43%, emerging markets were higher by 14%, Europe increased 20% and China improved 6%.
BDX offered revised guidance for fiscal year 2021. The company expects revenue to grow 16.5% to 17%, up from 12% to 14% previously, and adjusted earnings–per–share is projected to be in a range of $12.85 to $12.95, up from $12.75 to $12.85 earlier.
Shares trade for a P/E of nearly 20, which is above our fair value estimate of 18.6. Still, the stock could generate total returns just above 10% per year, based on expected annual EPS growth of 10% and the 1.3% dividend yield.
Dividend Aristocrat #3: Lowe’s Companies (LOW)
- 5-year Expected Annual Returns: 10.6%
Lowe’s Companies is the second-largest home improvement retailer in the US (after Home Depot). The company operates more than 2,200 home improvement and hardware stores in the U.S. and Canada.
Lowe’s reported second quarter results on August 18th. Total sales for the quarter came in at $27.6 billion compared to $27.3 billion in the same quarter a year ago. Comparable sales decreased 1.6% year–over–year, while the U.S. home improvement comparable sales decreased 2.2%.
Net earnings of $3.0 billion rose from $2.8 billion in 2Q 2020. Diluted earnings per share of $4.25 rose 13.6% from $3.74 a year earlier. After adjusting for strategic review costs, EPS of $4.25 was a 13.3% increase from $3.75.
The company repurchased 16.4 million shares in the quarter for $3.1 billion. Additionally, they paid out $430 million in dividends. The company remains in a strong liquidity position with $4.8 billion of cash and cash equivalents.
The previous outlook of $9 billion in share repurchases was maintained following the first quarter, and sales momentum is tracking for higher sales than anticipated for revenue of roughly $92 billion (a 30% comparable sales growth on a two–year basis).
We forecast 7% annual EPS growth over the next five years. Lowe’s has a long runway of growth up ahead.
Another key to Lowe’s success has been its booming e-commerce platform. This is a key differentiator between successful retailers like Lowe’s and the many retailers that are reporting losses or going out of business. Lowe’s is benefiting right alongside the e-commerce boom.
Lowe’s enjoys competitive advantages from scale and brand power as it operates in a duopoly with Home Depot. Neither of the two are expanding their store count significantly, and neither is interested in a price war. Both should remain highly profitable, as the home improvement market in the US is large enough for two companies to succeed.
Based on expected EPS of $11.33 for the current fiscal year, Lowe’s stock trades for a P/E ratio of 18. Our fair value estimate is a P/E of 20. The combination of multiple expansion, 7% expected EPS growth and the 1.6% dividend yield lead to total expected returns of 10.6% per year through 2026.
Dividend Aristocrat #2: Archer Daniels Midland (ADM)
- 5-year Expected Annual Returns: 11.7%
Archer–Daniels–Midland is the largest publicly traded farmland product company in the United States. The company‘s businesses include the processing of cereal grains and oilseeds and agricultural storage and transportation.
The company reported strong second-quarter earnings results. Adjusted earnings-per-share increased by 56% year-over-year, while adjusted operating profit increased 44%.
Source: Investor Presentation
Archer–Daniels–Midland’s business is recession resilient since the demand for food products is not cyclical. Archer–Daniels–Midland is one of the most significant players in its industry and has competitive advantages due to its scale and geographical reach. The company has been increasing its dividend for 46 consecutive years.
Archer–Daniels–Midland looks like a low–risk investment due to its recession resilience, solid balance sheet, geographic diversification, and dividend history.
ADM stock trades for a P/E ratio of 12.5, below our fair value estimate of 15. In addition, we expect 6% annual EPS growth while the stock has a 2.5% dividend yield. Total returns are expected to reach 11.7% per year over the next five years.
Dividend Aristocrat #1: AT&T Inc. (T)
- 5-year Expected Annual Returns: 14.0%
AT&T is a telecommunications giant, as its core Communications segment provides mobile, broadband and video to 100 million U.S. consumers and 3 million businesses.
In the 2021 second quarter, AT&T generated $44.0 billion in revenue, up 7.6% from Q2 2020. Adjusted earnings-per-share (EPS) equaled $0.89 compared to $0.83 in the year ago quarter. AT&T ended the quarter with a net debt-to-EBITDA ratio of 3.15x.
Source: Investor Presentation
Reported net income equaled $7.5 billion or $1.04 per share. On an adjusted basis, earnings–per–share equaled $0.86 compared to $0.84 in the year-ago quarter. AT&T ended the quarter with a net debt–to–EBITDA ratio of 3.1x.
AT&T is undergoing massive changes as it seeks to unload its satellite TV and media assets. On February 25th, AT&T announced it will spin off multiple assets into a separate company called New DIRECTV that will own and operate the DirecTV satellite TV business, as well as AT&T TV and U-verse video. AT&T will own 70% of the company, and will sell 30% ownership to TPG for approximately nearly $8 billion, which will be used to pay down debt.
On May 17th, 2021 AT&T announced an agreement to combine WarnerMedia with Discovery, Inc. (DISCA) to create a new global entertainment company. AT&T will receive $43 billion in a combination of cash, securities and retention of debt. AT&T shareholders receive stock representing 71% of the new company, with Discovery shareholders owning 29%.
We believe these various deals with allow AT&T to simplify its operations, become more efficient, and return to its core focus on telecom services. For example, 5G is a major area of focus for AT&T. The company continues to expand 5G to more cities around the country. AT&T’s 5G service now covers more than 120 million people.
With a P/E below 10, AT&T is undervalued against our fair value estimate of 11. The combination of 3% expected EPS growth and the 7.7% dividend yield lead to total expected returns of 14.0% per year over the next five years.
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.
- Archer-Daniels-Midland (ADM) | [8/18/21]
- Amcor (AMCR) | [7/24/21]
- Brown-Forman (BF-B) | [6/19/21]
- Colgate-Palmolive (CL) | [8/7/21]
- Clorox (CLX) | [8/7/21]
- Coca-Cola (KO) | [7/23/21]
- Hormel Foods (HRL) | [5/30/21]
- Kimberly-Clark (KMB) | [7/26/21]
- McCormick & Company (MKC) | [7/2/21]
- PepsiCo (PEP) | [7/13/21]
- Procter & Gamble (PG) [8/4/21]
- Sysco Corporation (SYY) [6/5/21]
- Walmart (WMT) | [8/20/21]
- Walgreens Boots Alliance (WBA) | [7/1/21]
- A.O. Smith (AOS) | [8/9/21]
- Cintas (CTAS) | [7/18/21]
- Dover (DOV) | [7/20/21]
- Emerson Electric (EMR) | [8/19/21]
- Expeditors International (EXPD) | [7/24/21]
- Illinois Tool Works (ITW) | [8/5/21]
- 3M (MMM) | [7/27/21]
- Pentair (PNR) | [8/1/21]
- Roper Technologies (ROP) | [7/24/21]
- Stanley Black & Decker (SWK) | [7/27/21]
- W.W. Grainger (GWW) | [8/4/21]
- General Dynamics (GD) | [8/15/21]
- Caterpillar (CAT) | [8/6/21]
- Abbott Laboratories (ABT) | [7/22/21]
- AbbVie (ABBV) | [8/2/21]
- Becton, Dickinson & Company (BDX) | [8/11/21]
- Cardinal Health (CAH) | [8/9/21]
- Johnson & Johnson (JNJ) | [7/22/21]
- Medtronic (MDT) | [8/24/21]
- West Pharmaceutical Services (WST) | [7/29/21]
- Genuine Parts Company (GPC) | [7/26/21]
- Leggett & Platt (LEG) | [8/9/21]
- Lowe’s Companies (LOW) | [8/26/21]
- McDonald’s (MCD) | [7/30/21]
- Target (TGT) | [6/3/21]
- V.F. Corporation (VFC) | [8/6/21]
- Aflac (AFL) | [8/2/21]
- Cincinnati Financial (CINF) | [8/1/21]
- Franklin Resources (BEN) | [8/6/21]
- S&P Global (SPGI) | [8/13/21]
- T. Rowe Price Group (TROW) | [8/3/21]
- Chubb (CB) | [8/5/21]
- People’s United Financial (PBCT) | [7/16/21]
- Air Products and Chemicals (APD) | [8/25/21]
- Albemarle (ALB) | [8/9/21]
- Ecolab (ECL) | [8/16/21]
- PPG Industries (PPG) | [7/20/21]
- Sherwin-Williams (SHW) | [7/27/21]
- Nucor (NUE) | [8/7/21]
- Linde (LIN) | [8/16/21]
- Essex Property Trust (ESS) | [8/3/21]
- Federal Realty Investment Trust (FRT) | [8/13/21]
- Realty Income (O) | [8/7/21]
- Atmos Energy (ATO) | [8/19/21]
- Consolidated Edison (ED) | [8/14/21]
- NextEra Energy (NEE) | [7/24/21]
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 – 2020)
The image below shows the history of the Dividend Aristocrats Index from 1989 through 2020:
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.
This information was compiled from the following sources:
- 1989 – 1991: Dividend Growth Investor
- 1992 – 2015: NOBL Index Historical Constituents
- 2016: Sure Dividend update
- 2017 – 2021: Data from S&P press releases
Other Dividend Lists & Final Thoughts
The Dividend Aristocrats list is not the only way to quickly screen for stocks that regularly pay rising dividends.
- The Dividend Achievers List is comprised of more than 250 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 32 stocks with 50+ years of consecutive dividend increases.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years but do not qualify as Dividend Aristocrats.
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
There is nothing magical about the Dividend Aristocrats. They are ‘just’ a collection of high quality shareholder friendly stocks that have strong competitive advantages.
Purchasing these types of stocks 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.”