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The 2019 Dividend Aristocrats List | See All 57 Now


Updated on December 3rd, 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:

 

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 November 2019

In November 2019, The Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), performed well with a 3.1% gain. It underperformed the SPDR S&P 500 ETF (SPY) for the month.

Performance between these two ETFs for the first 11 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 over a full percentage point 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: 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. A breakdown of year-over-year third quarter adjusted profit changes by segment is below:

ADM’s two largest segments had down quarters, which was partially offset by profit growth from the smaller Nutrition and Other segments.  The company is ultimately at the mercy of prevailing market prices and margins for its commodity inputs and services.

With that said, 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 3.3%, 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 9.4% per year through 2024, assuming a flat P/E multiple.


Dividend Aristocrat #6: 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 $9.8 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.

Federal Realty stock has a 3.2% dividend yield. Including a small ~0.7% annualized boost from an expanding P/FFO multiple, we expect 9.4% annualized returns over the next five years.


Dividend Aristocrat #5: 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 of $7.2 billion.

In mid-October, People’s United Financial reported (10/17/19) financial results for the third quarter of fiscal 2019. Despite declining interest rates, the company reported flat net interest margin of 3.12% thanks to its proactive decrease of deposit rates. Non-interest income rose 15% and operating earnings climbed 19% over last year’s quarter but operating earnings-per-share rose only 3%, from $0.33 to $0.34, due to the dilution that resulted from recent acquisitions.

Period-end loans grew 1%, thanks largely to strong performance in commercial loans.

Source: Earnings Slides

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 2024.

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 $1.33 in earnings-per-share in 2019; the current dividend payout stands at $0.71 per share, for a dividend payout ratio of just 53%. With a payout ratio just over half of expected EPS, investors can be confident that the dividend is secure.

We expect earnings-per-share of $1.33 for 2019. Based on this, the stock trades for a price-to-earnings ratio (P/E) of 12.2. 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 a slight bump of ~1.3% annually to shareholder returns through 2024. Combining valuation changes with the 5.0% expected annual earnings growth and the 4.4% dividend yield, we expect total returns of 10.7% per year for People’s United Financial stock 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 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 has a high dividend yield above 5%, and has also increased its dividend for over 30 consecutive years. We expect total annual returns of 11.5% per year for AT&T, mainly from the 5.4% dividend yield and 4% annual EPS growth, with a 2.1% boost from an expanding valuation.


Dividend Aristocrat #3: Walgreens Boots Alliance (WBA)

Walgreens Boots Alliance is a pharmacy retailer with over 18,000 stores in 11 countries. The stock currently has a $53 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 5% annual EPS growth through 2024. The stock has a 3.1% dividend yield, and we expect an expanding P/E ratio will add ~3.6% to annual returns, for total expected returns of 11.7% per year over the next five years.


Dividend Aristocrat #2: 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 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 significantly higher than our fair value estimate. Contraction of the valuation multiple could reduce annual returns by 10.4% per year. However, expected earnings-per-share growth of 17.4% should more than offset this. Including the 5.1% dividend yield, we expect total annual returns of 12.1% per year.


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 ~$129 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 9.7, which we believe is far too low for this Dividend Aristocrat. Our fair value estimate for AbbVie is a price-to-earnings ratio of 10.5. We view AbbVie as a deeply undervalued stock. An expanding P/E multiple could boost shareholder returns by approximately 1.6% per year over the next 5 years.

In addition, we expect annual earnings growth of 9.5% through 2024, thanks to the contributions from AbbVie’s pipeline as well as the Allergan acquisition. Lastly, AbbVie stock has a current dividend yield of 5.5%, 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 annual returns of approximately 16.6% per year over the next five years, making AbbVie our highest-ranked Dividend Aristocrat right now.

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.

 

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

Thanks for reading this article. Please send any feedback, corrections, or questions to support@suredividend.com.


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