Tuesday, June 20, 2017

Where are the Original Dividend Champions today?

The list of dividend champions was created by David Fish in 2007. It lists companies which have managed to boost dividends for 25 years in a row. David painstakingly maintains and updates the list every month on dripinvesting.org. In latter years, he has also added a list of dividend contenders and challengers ( companies raising dividends for more than 10 and more than 5 years respectively)
I first stumbled upon the list of dividend champions in early 2008, when I was starting my site from scratch. I have utilized the file in my research and investing, and have used it to gain insights into my investing.

In my research, I have also leveraged the historic compilation of the Dividend Champions, on the site of Robert Allan Schwartz. This collection of files has been instrumental in compiling the research on the original dividend champions.

There were 138 dividend champions in January 2008.

By the end of 2016, 78 of those original dividend champions are still on the list.

This means that 60 companies were removed from the dividend champions list.

The most common reason for removal was a dividend cut – 35 companies cut their dividends between 2008 and 2016 for one reason or another.

A further 12 companies kept dividends unchanged, which prompted them to leave the elite dividend champions list.

From the original 138 companies, eleven companies were acquired. This figure does not include the fact that of the 47 companies that cut or kept dividends unchanged, we had seven more companies which were ultimately acquisition targets.

Two companies were removed due to splitting in two. After reviewing the histories of the separated companies, I think that these should never have been deleted, because shareholders enjoyed annual organic dividend increases.

It looks like none of the original dividend champions failed. I define failure as permanent impairment to capital all the way down to zero. Only quality businesses tend to become dividend champions. As such, even when conditions change, those businesses tend to have staying power.

I did a little more analysis on the original dividend champions. I calculated the returns, dividends and performance of the original dividend champions from 2007. I will share the results with you on my next post.

Relevant Articles:

Dividend Champions - The Best List for Dividend Investors
Dividend Conspiracies
Historical changes of the S&P Dividend Aristocrats
S&P Dividend Aristocrats Index – An Incomplete List for Dividend Growth Investors

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