2020 Dividend Aristocrats List | See All 64 Now Sure Dividend

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The 2020 Dividend Aristocrats List | See All 64 Now

Updated on February 4th, 2020 by Bob Ciura
Spreadsheet data updated daily

The Dividend Aristocrats are a select group of 64 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 64 Dividend Aristocrats. You can download an Excel spreadsheet of all 64 (with metrics that matter) by clicking the link below:


Note: On January 24th, 2020, Amcor (AMCR), Atmos Energy (ATO), Realty Income (O), Essex Property Trust (ESS), Ross Stores (ROST), Albemarle (ALB), and Expeditors International (EXPD) were added to the Dividend Aristocrats Index which brings the total number of Dividend Aristocrats up from 57 to 64. These new aristocrats will be covered on Sure Dividend very soon.

2020 Dividend Aristocrats Changes

Source: S&P News Release

You can see detailed analysis on all 64 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 64 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 January 2020

In January 2020, The Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), registered a decline of 2.6%. It underperformed the SPDR S&P 500 ETF (SPY) for the month.

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 0.4% annually over the last decade – with slightly lower volatility.

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 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%.

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:

The top 2 sectors by weight in the Dividend Aristocrats are Consumer Staples and Industrials. The Dividend Aristocrats Index is tilted toward Consumer Staples and Industrials relative to the S&P 500. These 2 sectors make up over 45% 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 1.8% 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 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 2025. These 7 stocks represent attractive long-term buys for dividend growth investors.

Dividend Aristocrat #7: Federal Realty Investment 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 $9.8 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 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.

We expect FFO of $6.38 per share for Federal Realty in 2019. Based on this, the stock trades for a price-to-FFO ratio of 19.6, slightly below our fair value estimate of 22. Valuation expansion could add 2.3% to the stock’s annual returns. In addition, Federal Realty stock has a 3.3% dividend yield. Including 5.5% expected annual FFO growth, we expect total returns of 11.1% annualized returns over the next five years.

Dividend Aristocrat #6: A.O. Smith Corporation (AOS)

A.O. Smith is a leading manufacturer of residential and commercial water heaters, boilers and water treatment products. The company has a market capitalization of $7 billion. A.O. Smith generates two-thirds of its sales in North America, and most of the rest in China, whereas the rest of the world is just a small market for A.O. Smith.

A.O. Smith reported its fourth quarter earnings results on January 28. The company generated revenues of $751 million during the fourth quarter, which represents a decline of 7.6% compared to the prior year’s quarter, missing the consensus estimate by $25 million. A.O. Smith’s revenues were up slightly in North America during the quarter, but at the same time, sales in the rest of the world, mainly China, declined substantially, which more than offset the positive performance in the company’s home market, where volumes and margins improved.


Source: Investor Presentation

A.O. Smith generated earnings-per-share of $0.56 during the fourth quarter, which represents an increase on a quarter-to-quarter basis, but which was less than the profits A.O. Smith has generated during the previous year’s quarter. This came as no surprise, and was the continuation of a negative trend that started a couple of quarters ago. A.O. Smith guides for revenue growth of 4.5% to 5.5% during fiscal 2020, and the company expects earnings-per-share of $2.40 to $2.50 for the current fiscal year.

Based on expected 2020 EPS of $2.45, A.O. Smith stock trades for a 2020 price-to-earnings ratio of 17.3. Our fair value estimate is a P/E ratio of 18, which indicates the stock is slightly undervalued. An expanding P/E multiple could boost annual returns by 0.8% through 2025. In addition, expected five-year EPS growth of 8%, and the stock has a 2.3% dividend yield. Total returns are expected to reach 11.1% per year over the next five years.

Dividend Aristocrat #5: Exxon Mobil (XOM)

Exxon Mobil is an energy giant with a market capitalization of $290 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 late January, Exxon reported (1/31/20) financial results for the fourth quarter of 2019. Production remained flat over last year’s quarter, as a 4% increase in liquids was offset by a 5% decrease in gas. Excluding non-recurring gains of $3.9 billion, which resulted from asset sales, adjusted earnings-per-share plunged 71%, from $1.41 to $0.41, primarily due to depressed margins in the downstream and chemical segments.

Source: Earnings Slides

We remain positive regarding Exxon’s long-term growth prospects. Global demand for oil and gas continues to rise, which provides a strong fundamental tailwind for the company’s long-term future. According to a recent company presentation, new supply of 550 billion barrels of oil and 2,100 trillion cubic feet of natural gas are required through 2040 to meet projected global demand.

In preparation, 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 another major growth driver. In 2019, Exxon Mobil made 6 major deep-water discoveries in Guyana and Cyprus. In Guyana, Exxon Mobil has started Liza Phase I ahead of schedule. Guyana’s total recoverable resources are estimated at over 8 billion oil equivalent barrels.

Exxon Mobil’s earnings are volatile, due to the cyclical nature of the oil and gas industry. For 2020, we expect adjusted earnings-per-share of $3.50. The stock trades for a P/E ratio of 17.4. Our fair value estimate is a P/E of 13, as investor sentiment has eroded while the company turns itself around. Contraction of the P/E multiple could reduce annual returns by 5.7% per year.

However, because of Exxon Mobil’s depressed earnings, we expect a snap-back with 12% annual expected earnings-per-share growth over the next five years. Including the 5.7% dividend yield, we expect total annual returns of 12% per year over the next five years.

Dividend Aristocrat #4: 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 January 29th, 2019 AT&T reported Q4 and full year 2019 results for the period ending December 31st, 2019. For the quarter the company generated $46.8 billion in revenue, down from $48.0 billion in Q4 2018, as growth in domestic wireless services and business services partially offset declines in domestic video, legacy wireline services and WarnerMedia. Adjusted earnings-per-share equaled $0.89 compared to $0.86 previously.

Source: Investor Presentation

For the year AT&T generated $181.2 billion in revenue, up 6.1% led by a full year of Time Warner and growth in domestic wireless services. Adjusted earnings-per-share equaled $3.57 compared to $3.52 in 2018. AT&T reduced its debt-to-EBITDA ratio to 2.5x in 2019. AT&T also updated its 2020 outlook and 3-year financial guidance and capital allocation plan.

For 2020 the company reiterated its expectation of 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% annual revenue growth, $4.50 to $4.80 in earnings-per-share, continued dividend increases and a debt-to-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 has a high dividend yield above 5%, and has also increased its dividend for over 30 consecutive years. In addition, the stock is attractively valued right now. Shares of AT&T trade for 10.1 times earnings, according to 2020 EPS estimates. Multiple expansion to our fair value estimate of 12 would boost annual returns by 3.5% per year through 2025.

Overall, the combination of 4% expected EPS growth, the 5.5% dividend yield, and multiple expansion leads to total expected returns of 13% per year through 2025.

Dividend Aristocrat #3: People’s United Financial (PBCT)

People’s United Financial is a regional bank and financial services company engaged in real estate and mortgage lending, equipment financing, consumer loans, life insurance, brokerage services, wealth management, and traditional banking services. The company has a network of 400+ branches, with total assets of $52 billion and a market capitalization above $7 billion.

In mid-January, People’s United Financial reported (1/16/20) financial results for the fourth quarter of fiscal 2019. Due to flat interest rates, the net interest margin of the company remained essentially flat. Nevertheless, the company grew its operating earnings-per-share 3% over last year’s quarter, from $0.36 to a record $0.37, thanks to the acquisition of United Financial.

On an organic basis, loans remained flat sequentially and deposits declined -1% but net interest income and non-interest income grew 10% and 17%, respectively, thanks to the acquisition. Management expects the net interest margin to remain essentially flat this year.

Source: Investor Presentation

People’s United Financial has a positive growth outlook in the coming years. Acquisitions will continue to help the company expand its geographic reach and customer base. It recently acquired VAR Technology Finance, which focuses on serving the technological sector. People’s United Financial also completed the acquisition of BSB Bancorp. More recently, on November 1st People’s United Financial completed the acquisition of United Financial Bancorp, Inc. (UBNK). This acquisition will enhance the presence of the company in central Connecticut and western Massachusetts.

The bank also continues to benefit from higher loan balances thanks to organic and acquired growth. Net interest margin expansion seems to have ceased, so this acquisition-led growth will be critical for People’s United to achieve our earnings-per-share growth estimate of 5% annually through 2025.

People’s United is not a recession-resistant company. As a financial services provider, its profits are highly correlated to economic growth. For example, from 2007-2010, earnings-per-share declined 54% as the Great Recession took its toll. With that said, it remained profitable throughout, and continued to increase its dividend through the Great Recession, an impressive feat for a bank. Today, People’s United has a secure dividend. We expect $1.46 in earnings-per-share for 2020; the current dividend payout stands at $0.71 per share, for a dividend payout ratio of just 49%. With a payout ratio less than half of expected EPS, investors can be confident that the dividend is secure.

We expect earnings-per-share of $1.46 for 2020. Based on this, the stock trades for a price-to-earnings ratio (P/E) of 10.7. Our fair value estimate is a P/E of 13, which we believe is warranted due to the company’s growth potential and dividend history. Expansion of the valuation multiple could produce 4% annual boost to shareholder returns through 2025. Combining valuation changes with the 5.0% expected annual earnings growth and the 4.6% dividend yield, we expect total returns of 13.6% per year for People’s United Financial stock over the next five years.

Dividend Aristocrat #2: Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance is a pharmacy retailer with over 18,000 stores in 11 countries. The stock currently has a $45 billion market capitalization. Walgreens has increased its dividend for 44 consecutive years.

The company recently concluded fiscal 2020 Q1, and the results were mixed. Walgreens reported a 6% decline in adjusted earnings-per-share for the quarter while sales increased 1.6% (up 2.3% on a constant currency basis), thanks to continued growth in the Retail Pharmacy USA segment and a 5.2% increase in the Pharmaceutical Wholesale segment.

Walgreens made progress on a number of strategic initiatives last quarter. It created a German wholesale joint venture with McKesson (MCK) and formed a group purchasing organization with Kroger (KR) as it believes these strategic partnerships will help it grow its market share and improve its long-term growth outlook. In the short term, it fiscal 2020 outlook expects relatively little change in its earnings-per-share from fiscal 2019.

The most recent quarter showed that the company continues to struggle with earnings-per-share growth, but also is taking steps to secure its long term growth prospects through strategic investment. It is aiming to accomplish this by accelerating its digitization, restructuring its retail business and transforming its stores into neighborhood health centers, and significantly improving cost efficiencies.

Source: Investor Presentation

Pharmacy sales were up 2.9% last quarter, while prescriptions grew 1.4%. This shows that Walgreens continues to be the go-to retailer for pharmacy products and services.

Excluding acquisitions, pharmacy sales and prescriptions still grew 2.5% and 2.8%, respectively. One negative point from the quarter was that Walgreens lost market share by 55 basis points, to 20.9%. In addition, its international segment saw a 2.7% decline in sales due to ongoing soft market conditions in the U.K.

While the company continues to be plagued by sluggishness and growing competition in the space, there should be plenty of room for growth next year and beyond, thanks to sales growth, strategic initiatives, and the continued integration of the Rite Aid acquisition.

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.

Walgreens has a current share price of ~$51 and a midpoint for adjusted earnings-per-share of $6.00 for fiscal 2020. As a result, the stock trades for a price-to-earnings ratio of 8.5. This is a low valuation for a highly-profitable company, especially one with a strong brand and leadership position in its industry. Over the past 10 years, Walgreens held an average price-to-earnings ratio of 16.2.

As a result, Walgreens stock appears to be undervalued, relative to both the broader market as well as its own historical averages. But due to Walgreens’ slower growth and current headwinds, we have a 2025 price-to-earnings ratio target of 12 for the stock.

If shares were to expand to meet our target valuation, investors would see an additional 7.1% added to annual returns over the next five years. Plus, Walgreens will generate returns from 5% expected annual earnings-per-share growth and the 3.6% dividend yield. In this forecast, total annualized returns could reach 15.7% over the next five years.

Dividend Aristocrat #1: AbbVie Inc. (ABBV)

AbbVie is a pharmaceutical company focused on Immunology, Oncology, and Virology. AbbVie was spun off by Abbott Laboratories in 2013 and now trades with a market capitalization of ~$132 billion. Its most important product is Humira, which by itself represents ~60% of annual revenue.

AbbVie reported its third-quarter earnings results on November 1st. Revenue of $8.5 billion increased 3.5% operationally. Revenue was positively impacted by strong growth from Imbruvica, grossing sales of $1.3 billion, up 29% from the previous year’s quarter. However, Humira’s total global revenue declined by 3.2% year over year. Domestic sales growth of 10% for Humira was more than offset by a 32% decline in the international markets, due to biosimilar competition. That said, on an adjusted basis, AbbVie grew earnings-per-share by 8.9% year-over-year.

AbbVie continues to expand its portfolio well beyond Humira, and expects non-Humira product sales to exceed $35 billion by 2025.

Source: Investor Presentation

Along with its quarterly results, the company raised its full-year guidance. AbbVie now expects 2019 adjusted EPS in a range of $8.90 to $8.92, up from $8.82 to $8.92. The new guidance range represents full-year adjusted EPS growth of 12.6%, at the midpoint. In addition, AbbVie raised its quarterly dividend by 10%.

AbbVie’s major risk is loss of exclusivity for Humira, which has already transpired in Europe and will occur in the U.S. in 2023. Fortunately, AbbVie has multiple organic growth opportunities to replace Humira declines. In addition, AbbVie also recently announced the $63 billion acquisition of Botox-maker Allergan (AGN), which diversifies AbbVie’s product offerings. The combined company will have annual revenues of nearly $50 billion. AbbVie expects the transaction to be 10% accretive to adjusted EPS over the first full year following the close of the transaction, with peak accretion of greater than 20%.

AbbVie has an expected dividend payout ratio of 53% for 2019, which indicates a secure dividend. AbbVie will be more leveraged following the transaction, as a portion of the cash component of the offer will be funded with new debt. Fortunately, the company is committed to a Baa2/BBB or better credit rating. AbbVie also issued a new debt reduction target of $15 billion to $18 billion by 2021.

Shares of AbbVie trade for a 2019 price-to-earnings ratio of just 9.2, below our fair value estimate of 10.5. We view AbbVie as an undervalued stock. An expanding P/E multiple could boost shareholder returns by approximately 2.7% per year over the next 5 years.

In addition, we expect annual earnings growth of 9.5% through 2025, thanks to the contributions from AbbVie’s pipeline as well as the Allergan acquisition. Lastly, AbbVie stock has a current dividend yield of 5.8%, and the dividend payout appears to be highly secure. AbbVie has a projected dividend payout ratio of just over 50% for 2019, and the company recently raised its dividend by 10%.

In total, we expect the combination of future EPS growth, valuation changes and dividends to result in annual returns of 18% per year over the next five years. Such a high expected rate of return makes AbbVie our highest-ranked Dividend Aristocrat for 2020.

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


Health Care

Consumer Discretionary




Information Technology

Real Estate

Telecommunication Services


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:

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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