Updated on May 9th, 2023 by Bob Ciura
Income investors are always on the hunt for high-quality dividend stocks. There are many ways to measure high-quality stocks. One way for investors to find great dividend stocks is to focus on those with the longest histories of raising dividends.
With this in mind, we created a downloadable list of all ~150 Dividend Champions.
You can download your free copy of the Dividend Champions list, along with relevant financial metrics like price-to-earnings ratios, dividend yields, and payout ratios, by clicking on the link below:
Investors are likely familiar with the Dividend Aristocrats, a group of 68 stocks in the S&P 500 Index with 25+ consecutive years of dividend increases.
Meanwhile, investors should also familiarize themselves with the Dividend Champions, which have also raised their dividends for at least 25 years in a row.
While their length of dividend increases is the same, leading to some overlap, there are also some important differences between the Dividend Aristocrats and Dividend Champions.
As a result, the Dividend Champions list is much more expansive. There are many high-quality Dividend Champions that are not included on the Dividend Aristocrats list.
This article will discuss the Dividend Champions, and an analysis of our top 7 Dividend Champions, ranked according to expected total returns in the Sure Analysis Research Database.
Table of Contents
You can instantly jump to any specific section of the article by clicking on the links below:
- Overview of Dividend Champions
- Top Dividend Champion #7: Norwood Financial Corp. (NWFL)
- Top Dividend Champion #6: UGI Corp. (UGI)
- Top Dividend Champion #5: Bank OZK (OZK)
- Top Dividend Champion #4: Arrow Financial (AROW)
- Top Dividend Champion #3: First of Long Island (FLIC)
- Top Dividend Champion #2: Telephone and Data Systems (TDS)
- Top Dividend Champion #1: Albemarle Corporation (ALB)
Overview of Dividend Champions
The requirement to become a Dividend Champion is simple: 25+ years of consecutive annual dividend increases. The Dividend Aristocrats have the same requirement when it comes to number of years, but with a few additional requirements.
To be a Dividend Aristocrat, a company must also be included in the S&P 500 Index, must have a float-adjusted market cap of at least $3 billion, and must have an average daily value traded of at least $5 million. These added requirements preclude many companies that possess a sufficient track record of annual dividend increases, but do not qualify based on market cap or liquidity reasons.
As a result, while there is some overlap between the Dividend Aristocrats and the Dividend Champions, there are also many Dividend Champions that are not Dividend Aristocrats. Income investors might want to consider these stocks due to their impressive histories of annual dividend increases, so we have compiled them in the downloadable spreadsheet above.
In addition, we have ranked the top 7 Dividend Champions according to total expected annual returns over the next five years. Our top 7 Dividend Champions right now are ranked below.
The Top 7 Dividend Champions To Buy Right Now
The following 7 stocks represent Dividend Champions with at least 25 consecutive years of dividend increases, but they also have durable competitive advantages, long-term growth potential, and high expected total returns.
Stocks have been ranked by expected total annual return over the next five years, from lowest to highest.
Top Dividend Champion #7: Norwood Financial (NWFL)
- 5-year expected returns: 18.2%
Norwood Financial is a bank holding company that operates through its subsidiary, Wayne Bank. The company is an independent community bank with over 14 offices in Northeastern Pennsylvania and approximately 16 offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York.
It offers a range of personal and business credit services, trust and investment products, and real estate settlement services to the consumers, businesses, nonprofit organizations and municipalities in each of the communities that the company serves.
On April 21st, 2023, Norwood Financial Corp. released its first quarter 2023 results for the period ending March 31st, 2023. For the quarter, the company reported net income of $5.78 million which represents a 18.8% decrease compared to $7.13 million earned in the same period of 2022. Reported earnings per diluted share for the same periods were $0.71 and $0.87, a decrease of 18.4%.
The first quarter income decreased from the 2022 level due to one-time gains recognized last year and the rising cost of deposits and borrowed funds. Loan growth was 16.7% annually during the quarter, while total deposits increased 6.6%. The annualized net interest spread (fte) decreased to 2.83% from 3.22% in the reported quarter, compared to the same period last year.
Click here to download our most recent Sure Analysis report on NWFL (preview of page 1 of 3 shown below):
Top Dividend Champion #6: UGI Corp. (UGI)
- 5-year expected returns: 18.7%
UGI Corporation is a gas and electric utility that operates in Pennsylvania, in addition to a large energy distribution business that serves the entire US and other parts of the world. It was founded in 1882 and has paid consecutive dividends since 1885.
The company operates in four reporting segments: AmeriGas, UGI International, Midstream & Marketing, and UGI Utilities.
Source: Investor Presentation
On February 1st, 2023 UGI reported financial results for the fiscal quarter ended December 31, 2022. Management reported Q1 GAAP diluted earnings per share of $(4.54) and adjusted diluted EPS of $1.14, compared to GAAP diluted EPS of $(0.46) and adjusted diluted EPS of $0.93 in the prior-year period.
Q1 reportable segments earnings before interest expense and income taxes (“EBIT”) were $411 million compared to $348 million in the prior-year period. The company continued to have a strong balance sheet, with available liquidity of approximately $1.2 billion.
Click here to download our most recent Sure Analysis report on UGI (preview of page 1 of 3 shown below):
Top Dividend Champion #5: Bank OZK (OZK)
- 5-year expected returns: 18.7%
Bank OZK, previously Bank of the Ozarks, is a regional bank that offers services such as checking, business banking, commercial loans and mortgages to its customers in Arkansas, Florida, North Carolina, Texas, Alabama, South Carolina, New York and California. Bank OZK is the largest bank in its home state of Arkansas.
The key competitive advantage of Bank OZK is its exemplary management. The company has proved exceptionally resilient to recessions thanks to its rock-solid business execution, which results in superior asset quality.
Source: Investor Presentation
Thanks to its high asset quality and strong business execution, Bank OZK has raised its dividend for 27 consecutive years.
On April 3rd, 2023, Bank OZK announced a $0.35 quarterly dividend, representing a 2.9% increase over the last quarter’s payment and a 12.9% increase year-over-year. This marks the company’s 51st consecutive quarter of raising its dividend.
In mid-April, Bank OZK reported (4/20/23) financial results for the first quarter of fiscal 2023. Total loans and deposits grew 6% sequentially. Net interest income grew 4%, in sharp contrast to most banks, which incurred a decline in net interest income due to higher costs of deposits.
Earnings-per-share grew 5% sequentially, from $1.34 to $1.41, and exceeded the analysts’ consensus by $0.02. Bank OZK has exceeded the analysts’ consensus in 11 of the last 12 quarters.
Click here to download our most recent Sure Analysis report on Bank OZK (OZK) (preview of page 1 of 3 shown below):
Top Dividend Champion #4: Arrow Financial (AROW)
- 5-year expected returns: 20.2%
Arrow Financial Corporation is a multi-bank holding company. The company operates through two main subsidiary banks, the Glens Falls National Bank and Trust Company, and the Saratoga National Bank and Trust Company. Arrow Financial Corporation is also the parent company of North Country Investment Advisers and Update Agency, an insurance agency. The company produces just over $150 million in annual revenue. Arrow Financial has increased its dividend for 27 consecutive years.
Arrow reported fourth quarter and full-year earnings on January 30th, 2023, and results were quite weak, missing estimates on both the top and bottom lines. Earnings-per-share came to 73 cents, but that missed estimates by seven cents. Revenue was $37.7 million, up 8.5% year-over-year, but missing expectations by $1.3 million.
Net income for the year was $48.8 million, a decline of $1.1 million, or just over 2%, compared to 2021. Earnings-per-share rose in Q4 from 62 cents to 73 cents year-over-year. Net interest margin for the year was 3.03%. Total assets were nearly $4 billion at the end of 2022. Total loans were $2.98 billion, and total deposits were $3.5 billion.
That puts the bank’s loan-to-deposit ratio among the highest in our coverage universe, as that leaves Arrow with little room for loan growth. Book value ended the year at $21.36 per share, down about 5% year-over-year, which was the result of unrealized losses in the bank’s available-for-sale portfolio, which in turn was driven by higher interest rates.
Click here to download our most recent Sure Analysis report on AROW (preview of page 1 of 3 shown below):
Top Dividend Champion #3: First of Long Island Corp. (FLIC)
- 5-year expected returns: 22.1%
The First of Long Island Corporation is the holding company for The First National Bank of Long Island, a small-sized bank that provides a range of financial services to consumers and small to medium-sized businesses. Its offerings include business loans, consumer loans, mortgages, savings accounts, etc.
FLIC operates around 50 branches in two Long Island counties and several NYC burrows, including Queens, Brooklyn, and Manhattan. FLIC has a history of almost 100 years, as it was founded in 1927, and the company is headquartered in Glen Head, New York.
Thanks to its disciplined and conservative management, FLIC has exhibited an admirable performance record. The company has consistently grown its earnings per share every single year over the last nine years.
Source: Investor Presentation
Thanks to its consistent earnings growth record, FLIC has raised its dividend for 45 consecutive years. With a solid payout ratio of 49% and given the robust business model of the company, its dividend is safe.
Click here to download our most recent Sure Analysis report on First of Long Island Corporation (preview of page 1 of 3 shown below):
Top Dividend Champion #2: Telephone & Data Systems (TDS)
- 5-year expected returns: 25.4%
Telephone & Data Systems is a telecommunications company that provides customers with cellular and landline services, wireless products, cable, broadband, and voice services across the U.S. The Cellular Division accounts for more than 75% of total operating revenue.
Telephone & Data Systems has an 82% stake in U.S. Cellular and essentially relies on this stake to achieve growth. The strong dependence of Telephone & Data Systems on U.S. Cellular results in an extremely volatile and unreliable performance. The company has grown fast in some years but it has greatly decelerated in the last two years. It incurred losses last year and is poised to incur further losses this year.
Earnings do not cover its dividend, as the company is poised to incur losses this year. Given also its inconsistent business performance, the dividend sustainability is questionable.
Click here to download our most recent Sure Analysis report on Telephone & Data Systems (TDS) (preview of page 1 of 3 shown below):
Top Dividend Champion #1: Albemarle Corporation (ALB)
- 5-year expected returns: 27.6%
Albemarle is the largest producer of lithium and second largest producer of bromine in the world. The two products account for nearly two-thirds of annual sales. Albemarle produces lithium from its salt brine deposits in the U.S. and Chile. The company has two joint ventures in Australia that also produce lithium. Albemarle’s Chile assets offer a very low-cost source of lithium.
Related: 2023 Lithium Stocks List
The company operates in nearly 100 countries and is composed of four segments: Lithium & Advanced Materials (49% of sales), Bromine Specialties (21% of sales), Catalysts (21% of sales) and Other (9% of sales). Albemarle produces annual sales of more than $7.5 billion.
Source: Investor Presentation
Albemarle produces annual sales of $7.3 billion. It is one of the top lithium stocks.
On February 15th, 2023, Albemarle announced fourth quarter results for the period ending December 31st 2022. For the quarter, revenue grew 193% to $2.62 billion and was $10 million more than expected. Adjusted earnings-per-share of $9.60 compared very favorably to $1.01 in the prior year and was $0.44 above estimates.
For the year, revenue grew 120% to $7.3 billion while adjusted earnings-per-share totaled $22.84 compared to $4.05 in the prior year. For the quarter, revenue for Lithium grew 410.4% to $2.1 billion, due to a 328% improvement in pricing and an 82% increase in volume due to renegotiated contracts, an increase in market pricing, and expansion at the company’s facilities in Chile.
Albemarle completed its acquisition of a lithium conversion plant in China at the end of October of 2022 that should add to results going forward.
Click here to download our most recent Sure Analysis report on Albemarle (preview of page 1 of 3 shown below):
Final Thoughts
The various lists of stocks by length of dividend history are a good resource for investors who focus on high-quality dividend stocks.
In order for a company to raise its dividend for at least 25 years, it must have durable competitive advantages, highly profitable businesses, and leadership positions in their respective industries.
They also have long-term growth potential and the ability to navigate recessions while continuing to raise their dividends.
The top 7 Dividend Champions presented in this article have long histories of dividend growth, and the combination of high dividend yields, low valuations, and future earnings growth potential make them attractive buys right now.
The Dividend Champions list is not the only way to quickly screen for stocks that regularly pay rising dividends.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 48 stocks with 50+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- 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 20 Highest Yielding Monthly Dividend Stocks Now: The 20 monthly dividend stocks with the highest current yields.
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Complete List of Russell 2000 Stocks: arguably the world’s best-known benchmark for small-cap U.S. stocks.
- The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
- The 2022 High ROIC Stocks List: The top 10 stocks with high returns on invested capital.
- The 2022 High Beta Stocks List: The 100 stocks in the S&P 500 Index with the highest beta.
- The 2022 Low Beta Stocks List: The 100 stocks in the S&P 500 Index with the lowest beta.