Wednesday, December 30, 2009

Dividend Aristocrats List for 2010

The dividend aristocrats list includes companies which have increased dividends for over 25 years in a row. It is equally weighted and re-balanced once an year. Over the past 3,5 and 7 years the index of elite dividend stocks has managed to outperform the S&P 500 by 5%, 3.7% and 4.40% respectively.

The companies which were added to the index for 2010 include:

Brown-Forman Corporation (BF.B ) engages in the manufacture, bottling, import, export, and marketing of alcoholic beverage brands.

Cintas Corporation (CTAS) provides corporate identity uniforms and related business services in the United States and Canada. The company operates through four segments: Rental Uniforms and Ancillary Products; Uniform Direct Sales; First Aid, Safety, and Fire Protection Services; and Document Management Services.

I expected that these two companies could be good additions to the index in The New Dividend Aristocrats.

The companies which were removed from the index include:

Avery Dennison Corp (AVY) (analysis)

BB&T Corp (BBT) (analysis)

Gannett Co (GCI) (analysis)

General Electric (GE) (analysis)

Johnson Controls (JCI) (analysis)

Legg Mason (LM) (analysis)

M & T Bank (MTB) (analysis)

Pfizer (PFE) (analysis)

State Street (STT) (analysis)

US Bancorp (USB) (analysis)

In 2008 the dividend aristocrats’ index outperformed the S&P 500 by 15.50 percent. The dividend aristocrats lost 21.55% in 2008 versus the 37.00% loss for the S&P 500. So far in 2009 ( as of December 24) the S&P Dividend Aristocrats index is up 27.82%,, which is better than the 27.70% performance of S&P 500. Over the past 5 years the index has returned 3.81%, versus 0.71% for S&P 500.

Just because a company is on the list does not automatically make it a buy. Investors should make sure not to overpay for stocks, and should not overconcentrate in certain sectors. The complete list for 2010 could be found below:

To view the full list of Dividend Aristocrats in 2009, check out Standard and Poors website.

This article was included in the Carnival of Personal Finance #239 – Hot Money Trends of 2010 Edition

Full Disclosure: Long MTB

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