Tuesday, January 25, 2022

Dividend Aristocrats List for 2022

The S&P Dividend Aristocrats index tracks companies in the S&P 500 that have increased dividends every year for at least 25 years in a row. The index is equally weighted, and rebalanced every quarter.


To qualify for membership in the S&P 500 Dividend Aristocrats index, a stock must satisfy the following criteria:

1. Be a member of the S&P 500
2. Have increased dividends every year for at least 25 consecutive years
3. Meet minimum float-adjusted market capitalization and liquidity requirements defined in the index inclusion and index exclusion rules below.

The group of companies in the Dividend Aristocrats index tend to generate reliable dividend income, and provide the potential for strong total returns. The list is well diversified across sectors.

There are 65 companies in the Dividend Aristocrats index for 2021.

For 2022, there were several changes. The index added:

- Brown & Brown (BRO)
- Church & Dwight (CHD)

The index removed:

- AT&T (T)
- Leggett & Platt (LEG)

On December 20, 2021 Leggett & Platt was moved to the S&P MidCap 400 from the S&P 500, and dropped from the S&P 500 Dividend Aristocrats. This is the only reason the stock was dropped from the S&P 500 Dividend Aristocrats Index. Leggett & Platt is a dividend king and dividend champion with a 50 year track record of annual dividend increases.


Since the inception of the index in 1989, the number of holdings has fluctuated from 26 to 65 holdings. It is still not even half the number of Dividend Champions however.


The 2022 Dividend Aristocrats are listed below:

Symbol

Name

Sector

Years of Annual Dividend Increases

10 year Dividend   Growth

Dividend Yield

ABBV

AbbVie Inc.

Health Care

49

17.93%

4.17%

ABT

Abbott Laboratories

Health Care

49

7.15%

1.34%

ADM

Archer-Daniels-Midland Co

Consumer Staples

46

8.49%

2.19%

ADP

Automatic Data Processing

Information Technology

46

11.45%

1.69%

AFL

AFLAC Inc

Financials

40

7.94%

2.74%

ALB

Albemarle Corp.

Materials

27

9.37%

0.67%

AMCR

Amcor

Materials

26

#N/A

4.03%

AOS

Smith A.O. Corp

Industrials

28

21.60%

1.30%

APD

Air Products & Chemicals Inc

Materials

39

10.11%

1.97%

ATO

Atmos Energy

Utilities

38

6.47%

2.60%

BDX

Becton Dickinson & Co

Health Care

50

7.44%

1.38%

BEN

Franklin Resources Inc

Financials

42

12.88%

3.46%

BF.B

Brown-Forman Corp B

Consumer Staples

37

7.47%

1.03%

BRO

Brown & Brown

Financials

28

8.87%

0.58%

CAH

Cardinal Health Inc

Health Care

25

9.07%

3.81%

CAT

Caterpillar Inc

Industrials

28

9.05%

2.15%

CB

Chubb Ltd

Financials

28

8.80%

1.66%

CHD

Church & Dwight

Consumer Staples

25

11.50%

0.99%

CINF

Cincinnati Financial Corp

Financials

61

4.51%

2.21%

CL

Colgate-Palmolive Co

Consumer Staples

58

4.66%

2.11%

CLX

Clorox Co

Consumer Staples

44

7.04%

2.66%

CTAS

Cintas Corp

Industrials

39

20.20%

0.86%

CVX

Chevron Corp

Energy

34

5.56%

4.57%

DOV

Dover Corp

Industrials

66

7.28%

1.10%

ECL

Ecolab Inc

Materials

30

10.62%

0.87%

ED

Consolidated Edison Inc

Utilities

47

2.59%

3.63%

EMR

Emerson Electric Co

Industrials

65

3.53%

2.22%

ESS

Essex Property Trust

Real Estate

27

7.23%

2.37%

EXPD

Expeditors International

Industrials

27

8.78%

0.86%

FRT

Federal Realty Invt Trust

Real Estate

54

4.64%

3.14%

GD

General Dynamics

Industrials

30

9.82%

2.28%

GPC

Genuine Parts Co

Consumer Discretionary

65

6.04%

2.33%

GWW

Grainger W.W. Inc

Industrials

50

9.75%

1.25%

HRL

Hormel Foods Corp

Consumer Staples

54

14.41%

2.13%

IBM

Intl Business Machines

Information Technology

26

8.49%

4.91%

ITW

Illinois Tool Works Inc

Industrials

47

12.89%

1.98%

JNJ

Johnson & Johnson

Health Care

59

6.42%

2.48%

KMB

Kimberly-Clark

Consumer Staples

49

5.28%

3.19%

KO

Coca-Cola Co

Consumer Staples

59

5.98%

2.84%

LIN

Linde plc

Materials

28

7.80%

1.22%

LOW

Lowe's Cos Inc

Consumer Discretionary

59

18.80%

1.24%

MCD

McDonald's Corp

Consumer Discretionary

46

7.57%

2.06%

MDT

Medtronic plc

Health Care

44

9.98%

2.44%

MKC

McCormick & Co

Consumer Staples

35

9.28%

1.53%

MMM

3M Co

Industrials

63

10.41%

3.33%

NEE

NextEra Energy

Utilities

27

10.84%

1.65%

NUE

Nucor Corp

Materials

49

1.11%

1.75%

O

Realty Income Corp.

Real Estate

26

5.02%

4.13%

PBCT

People's United Financial

Financials

29

1.49%

4.10%

PEP

PepsiCo Inc

Consumer Staples

49

7.74%

2.48%

PG

Procter & Gamble

Consumer Staples

65

5.16%

2.13%

PNR

Pentair PLC

Industrials

46

4.06%

1.15%

PPG

PPG Industries Inc

Materials

50

7.18%

1.37%

ROP

Roper Technologies, Inc

Industrials

29

17.73%

0.50%

SHW

Sherwin-Williams Co

Materials

43

16.28%

0.62%

SPGI

S&P Global

Financials

48

11.91%

0.65%

SWK

Stanley Black & Decker

Industrials

54

6.15%

1.68%

SYY

Sysco Corp

Consumer Staples

51

5.87%

2.39%

TGT

Target Corp

Consumer Discretionary

54

11.13%

1.56%

TROW

T Rowe Price Group Inc

Financials

35

13.29%

2.20%

VFC

VF Corp

Consumer Discretionary

49

12.36%

2.73%

WBA

Walgreens Boots Alliance Inc

Consumer Staples

46

8.98%

3.66%

WMT

Wal-Mart

Consumer Staples

48

4.59%

1.52%

WST

West Pharmaceutical Services

Health Care

29

7.18%

0.15%

XOM

Exxon Mobil Corp

Energy

39

6.55%

5.75%


The index has generated strong total returns over time past decade. I wanted to note that in 2008, the Dividend Aristocrats index declined by 21.88%. The S&P 500 however declined by 37%.

The dividend aristocrats index tends to shine during bear markets and low return environments. However, it also pulls its weight when we are in a bull market too. It is the best of both worlds really.

These are the returns since the launch of the Dividend Aristocrats Index in 1989:

Year

Dividend Aristocrats

S&P   500

Relative Performance

1990

5.70%

-3.10%

8.80%

1991

38.50%

30.50%

8.00%

1992

10.10%

7.60%

2.50%

1993

4.30%

10.10%

-5.80%

1994

0.90%

1.40%

-0.50%

1995

34.60%

37.60%

-3.00%

1996

20.90%

23.00%

-2.10%

1997

35.50%

33.40%

2.10%

1998

16.80%

28.60%

-11.80%

1999

-5.40%

21.00%

-26.40%

2000

10.10%

-9.10%

19.20%

2001

10.80%

-11.90%

22.70%

2002

-9.90%

-22.10%

12.20%

2003

25.40%

28.70%

-3.30%

2004

15.50%

10.90%

4.60%

2005

3.70%

4.90%

-1.20%

2006

17.30%

15.80%

1.50%

2007

-2.10%

5.50%

-7.60%

2008

-21.90%

-37.00%

15.10%

2009

26.60%

26.50%

0.10%

2010

19.35%

15.06%

4.29%

2011

8.33%

2.11%

6.22%

2012

16.94%

16.00%

0.94%

2013

32.27%

32.39%

-0.12%

2014

15.76%

13.69%

2.07%

2015

0.93%

1.38%

-0.45%

2016

11.83%

11.96%

-0.13%

2017

21.73%

21.83%

-0.10%

2018

-2.73%

-4.38%

1.65%

2019

27.97%

31.49%

-3.52%

2020

8.68%

18.40%

-9.72%

2021

25.99%

28.71%

-2.72%




You can see the performance of the Dividend Aristocrats Index versus S&P 500 since 1989. The S&P 500 dominated during the 1990's. However, the Dividend Aristocrats index did very well during the next decade. During the past decade, the Dividend Aristocrats Index has basically matched S&P 500 until early 2020. Over the past two years, it has trailed S&P 500 slightly. 




I first stumbled upon the Dividend Aristocrats index in late 2007, and instantly understood why dividend growth investing is such a powerful wealth generating tool. If someone had invested in the Dividend Aristocrats index after reading my review of the list at the beginning of 2008, they would have tripled their money. 

An investment in the dividend aristocrats a decade ago, would have resulted in a total return of 319.33%. In other words, investing $100 in the Dividend Aristocrats list in December 2011 would have turned into $419.33 by December 31, 2021 . The same amount investing in S&P 500 would have turned into $462.57 however.




As I gained more experience however, I have gravitated more towards the Dividend Champions list, which was created by Dave Fish. The Dividend Champions list is more complete, as it doesn’t exclude companies due to low liquidity, or due to market capitalization below a certain threshold. In addition, I find that historically, the list of Dividend Champions has followed a more consistent approach than the list of Dividend Aristocrats. Sadly, Dave passed away last year. Luckily, another person has agreed to update it for the time being. You can view the 2022 Dividend Champions List here.

When I review the list of historical changes in the Dividend Aristocrats index, I see some inconsistencies in the way portfolio components are added or removed.

For example, the Dividend Aristocrats index removed Altria in 2007, after it spun-off Kraft Foods and as a result its dividend decreased. It could be argued that the dividend income for the investor was not decreased, because they kept getting a dividend from Altria as well as dividends from Kraft Foods.

The S&P committee seems to have rectified this issue, and have kept both Abbott and Abbvie after legacy Abbott Laboratories split in two companies in early 2013.

Ironically, Dave Fish had Altria listed as a Dividend Champion. However, he didn’t have Abbott nor Abbvie listed as a dividend champion ( they are listed as Dividend Aristocrats however).

Last year, I found out that Cardinal Health (CAH) has only been able to grow dividends for 23 years in a row. This is why it is not on the dividend champions list. The dividend aristocrats list however has a 31 year streak of annual dividend increases listed.

This is why you need to perform your own checks as an investor.

In addition, I wanted to let you know that I would not purchase all companies from either lists blindly. I run my entry criteria screen to come up with a list of companies for further research. Before investing in any individual stock, I research it enough to gain some understanding of the business and its trends in fundamentals.

Relevant Articles:

Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
Dividend Aristocrats List for 2017
Dividend Aristocrats for Dividend Growth and Total Returns
Where are the original Dividend Aristocrats now?
Historical changes of the S&P Dividend Aristocrats
Why do I like the Dividend Aristocrats?
Dividend Aristocrats List for 2016

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