Updated on July 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 10 Dividend Aristocrats Now
- Dividend Aristocrats Analysis (The Dividend Aristocrats In Focus Series)
- Historical Dividend Aristocrats List (1989 – 2020)
- Final Thoughts
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:
- 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 June 2021
In June 2021, the Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), registered a negative total return of -1.4%. It under-performed the SPDR S&P 500 ETF (SPY) for the month.
- NOBL generated negative total returns of -1.4% in June 2021
- SPY generated positive total returns of 2.3% in June 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 14.5% total annual return for the Dividend Aristocrats versus 14.8% for the S&P 500 Index. However, the Dividend Aristocrats have exhibited slightly lower risk than the benchmark, as measured by standard deviation. This has led to to superior 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 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 new Aristocrats for 2019 and 2020).
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:
- 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.
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 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 drawdowns as well.
The Top 10 Dividend Aristocrats Now
Each month we rank the Dividend Aristocrats 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 Aristocrat picks.
Analysis on our #10, #9, and #8 ranked Dividend Aristocrats is below.
Dividend Aristocrat #10: Cardinal Health (CAH)
- 5-year Expected Annual Returns: 7.0%
Cardinal Health is one of the “Big 3” drug distribution companies along with McKesson (MKC) and AmerisourceBergen (ABC). Cardinal Health serves over 24,000 United States pharmacies and more than 85% of the country’s hospitals.
On May 6th, 2021 Cardinal Health released financial results for the fiscal third quarter. Revenue of $39.3 billion rose slightly from $39.2 billion in the year-ago period. Adjusted earnings-per-share of $1.53 declined 5.6% year-over-year.
Cardinal Health operates in two segments: Pharmaceutical and Medical. The Pharmaceutical segment makes up the lion’s share of revenues (~90%), but the Medical segment remains important due to its higher margins and growth potential.
Source: Investor Presentation
In the fiscal third quarter, Pharmaceutical revenue was flat year-over-year, while segment profit declined 4%. Medical segment revenue increased 3% while profits declined 2% from the same quarter last year.
The company narrowed its full-year forecast, now expecting adjusted EPS in a range of $5.90 to $6.05, compared with previous guidance of $5.85 to $6.10. In addition, the company announced a $0.4908 quarterly dividend, marking a 1.0% increase and its 34th consecutive year of dividend increases.
Based on expected EPS of $5.98 for 2021, shares of Cardinal Health trade for a P/E ratio of 9.7, which is slightly below our fair value P/E of 10. In addition, we expect 3% annual EPS growth plus the 3.4% dividend yield, leading to total annual returns of 7.0% over the next five years.
Dividend Aristocrat #9: Atmos Energy (ATO)
- 5-year Expected Annual Returns: 8.3%
Atmos Energy can trace its beginnings all the way back to 1906 when it was formed in Texas. Since that time, it has grown both organically and through mergers to a market cap above $13 billion. The company distributes and stores natural gas in eight states, and serves over 3 million customers.
Source: Investor Presentation
Atmos reported second quarter earnings on May 5th. Revenue increased 35% year-over-year to $1.35 billion, while consolidated operating income increased 15% year-over-year. Growth came from favorable rate outcomes and customer growth in the distribution segment.
Atmos’ earnings-per-share has risen steadily in the past decade as the company continues to grow both organically and through acquisitions. We are forecasting a five-year annual EPS growth rate of 6% moving forward. The company can achieve this growth through continued improvements in gross margin, reductions in operating costs as a percentage of revenue, and top line growth via acquisitions as well as customer growth.
Shares currently trade for a P/E of 19.3, which is slightly above our fair value estimate of 19. While valuation is a negative catalyst, we expect the company to grow EPS by 6% per year, and the stock also has a 2.6% dividend yield. Total returns are estimated to reach 8.3% per year over the next five years.
Dividend Aristocrat #8: 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, Walgreens has a presence in more than 25 countries, and has more than 21,000 stores.
It also operates one of the largest global pharmaceutical wholesale and distribution networks, which deliver products to more than 230,000 pharmacies, doctors, health centers and hospitals each year.
In the most recent fiscal quarter, sales from continuing operations increased 10.4% in constant currencies. The pharmacy segment led the way in the U.S. last quarter:
Source: Investor Presentation
Adjusted EPS from continuing operations increased 93.6% on a constant-currency basis. In addition, Walgreens raised its fiscal 2021 guidance and now expects 10% earnings-per-share growth for fiscal 2021.
Over the long-term, an aging population and a focus on becoming a health destination should provide growth tailwinds to Walgreens. We expect Walgreens to generate 5.0% annual EPS growth over the next five years.
Walgreens has increased its dividend for 45 consecutive years, and the stock currently yields 3.8%. Walgreens stock trades for a fiscal 2021 P/E ratio of 9.9, compared with our fair value estimate of 10. The stock is essentially fairly valued at this price.
Future EPS growth and dividends result in total expected returns of 8.8% per year over the next five years.
For the rest of the Top 10 list, join our Top 10 Dividend Aristocrats service.
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
- Archer-Daniels-Midland (ADM) | [5/9/21]
- Amcor (AMCR) | [3/17/21]
- Brown-Forman (BF-B) | [6/19/21]
- Colgate-Palmolive (CL) | [5/8/21]
- Clorox (CLX) | [5/15/21]
- Coca-Cola (KO) | [5/23/21]
- Hormel Foods (HRL) | [5/30/21]
- Kimberly-Clark (KMB) | [4/26/21]
- McCormick & Company (MKC) | [3/30/21]
- PepsiCo (PEP) | [4/18/21]
- Procter & Gamble (PG) [4/20/21]
- Sysco Corporation (SYY) [6/5/21]
- Walmart (WMT) | [6/1/21]
- Walgreens Boots Alliance (WBA) | [3/31/21]
Industrials
- A.O. Smith (AOS) | [5/5/21]
- Cintas (CTAS) | [3/21/21]
- Dover (DOV) | [4/21/21]
- Emerson Electric (EMR) | [5/9/21]
- Expeditors International (EXPD) | [3/28/21]
- Illinois Tool Works (ITW) | [5/6/21]
- 3M (MMM) | [4/27/21]
- Pentair (PNR) | [4/30/21]
- Roper Technologies (ROP) | [5/4/21]
- Stanley Black & Decker (SWK) | [4/28/21]
- W.W. Grainger (GWW) | [5/5/21]
- General Dynamics (GD) | [5/4/21]
- Caterpillar (CAT) | [5/4/21]
Health Care
- Abbott Laboratories (ABT) | [4/20/21]
- AbbVie (ABBV) | [5/3/21]
- Becton, Dickinson & Company (BDX) | [5/10/21]
- Cardinal Health (CAH) | [5/8/21]
- Johnson & Johnson (JNJ) | [4/21/21]
- Medtronic (MDT) | [5/27/21]
- West Pharmaceutical Services | [5/19/21]
Consumer Discretionary
- Genuine Parts Company (GPC) | [5/30/21]
- Leggett & Platt (LEG) | [5/4/21]
- Lowe’s Companies (LOW) | [5/19/21]
- McDonald’s (MCD) | [5/1/21]
- Target (TGT) | [6/3/21]
- V.F. Corporation (VFC) | [5/21/21]
Financials
- Aflac (AFL) | [5/2/21]
- Cincinnati Financial (CINF) | [5/22/21]
- Franklin Resources (BEN) | [5/7/21]
- S&P Global (SPGI) | [5/19/21]
- T. Rowe Price Group (TROW) | [5/2/21]
- Chubb (CB) | [5/3/21]
- People’s United Financial (PBCT) | [4/26/21]
Materials
- Air Products and Chemicals (APD) | [5/19/21]
- Albemarle (ALB) | [5/9/21]
- Ecolab (ECL) | [4/29/21]
- PPG Industries (PPG) | [4/17/21]
- Sherwin-Williams (SHW) | [4/28/21]
- Nucor (NUE) | [5/8/21]
- Linde (LIN) | [5/15/21]
Energy
- Chevron (CVX) | [5/6/21]
- Exxon Mobil (XOM) | [5/6/21]
Information Technology
Real Estate
- Essex Property Trust (ESS) | [5/8/21]
- Federal Realty Investment Trust (FRT) | [5/19/21]
- Realty Income (O) | [5/11/21]
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 – 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 31 stocks with 50+ years of consecutive dividend increases.
- The Sure Dividend 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 payments per year.
- The Large Cap Stocks List: stocks with market caps above $10 billion.
- 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.”