Dividend Aristocrats List

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 64 companies in the Dividend Aristocrats index for 2020, up from 57 in 2019. The seven new additions include:

Albermarle Corp           (ALB)
Amcor PLC                   (AMCR)
Atmos Energy Corp       (ATO)
Essex Property Trust      (ESS)
Expeditors International (EXPD)
Realty Income Corp        (O)
Ross Stores                     (ROST)

The odd addition is Amcor, since that's the company that acquired the old Bemis (BMS). Bemis had a 36 year history of annual dividend increases, yet oddly it was not a part of the Dividend Aristocrats Index. Bemis was dropped from the index in 2014 for no reason, as it had kept raising dividends.

I am not sure why Atmos Energy (ATO) is just now being added to the index, since the company has a 36 year history of annual dividend increases.

There were no companies removed from the list in 2019.  The number of dividend aristocrats is equal to the record number of Dividend Aristocrats from 2001.Since the inception of the index in 1989, the number of holdings has fluctuated from 26 to 64 holdings. It is still not even half the number of Dividend Champions however.


The 2020 Dividend Aristocrats are listed below:


Symbol
Name
Sector
Years of Annual Dividend Increases
10 year Dividend Growth
Dividend Yield
ABBV
AbbVie Inc.
Health Care
47
13.99%
5.65%
ABT
Abbott Laboratories**
Health Care
47
5.51%
1.59%
ADM
Archer-Daniels-Midland Co
Consumer Staples
44
9.60%
3.16%
ADP
Automatic Data Processing
Information Technology
45
10.61%
2.05%
AFL
AFLAC Inc
Financials
37
6.79%
2.06%
ALB
Albemarle Corp.
Materials
25
11.14%
1.81%
AMCR
Amcor
Materials
25
3.50%
2.29%
AOS
Smith A.O. Corp
Industrials
26
21.50%
2.11%
APD
Air Products & Chemicals Inc
Materials
38
9.85%
2.20%
ATO
Atmos Energy
Utilities
36
4.96%
1.96%
BDX
Becton Dickinson & Co
Health Care
48
8.91%
1.14%
BEN
Franklin Resources Inc
Financials
40
14.02%
4.28%
BF.B
Brown-Forman Corp B
Consumer Staples
36
8.03%
0.98%
CAH
Cardinal Health Inc
Health Care
24
17.52%
3.57%
CAT
Caterpillar Inc
Industrials
26
8.45%
2.93%
CB
Chubb Ltd
Financials
26
9.92%
1.97%
CINF
Cincinnati Financial Corp
Financials
59
3.51%
2.11%
CL
Colgate-Palmolive Co
Consumer Staples
56
7.11%
2.45%
CLX
Clorox Co
Consumer Staples
42
7.72%
2.68%
CTAS
Cintas Corp
Industrials
37
18.43%
0.90%
CVX
PBCT
Energy
33
5.99%
3.81%
DOV
Dover Corp
Industrials
64
8.58%
1.67%
ECL
Ecolab Inc
Materials
28
12.63%
0.95%
ED
Consolidated Edison Inc
Utilities
46
2.29%
3.27%
EMR
Emerson Electric Co
Industrials
63
4.05%
2.61%
ESS
Essex Property Trust
Real Estate
25
6.49%
2.52%
EXPD
Expeditors International
Industrials
25
10.89%
1.35%
FRT
Federal Realty Invt Trust
Real Estate
52
4.65%
3.24%
GD
General Dynamics
Industrials
28
10.35%
2.20%
GPC
Genuine Parts Co
Consumer Discretionary
63
6.58%
3.11%
GWW
Grainger W.W. Inc
Industrials
48
12.30%
1.75%
HRL
Hormel Foods Corp
Consumer Staples
54
16.03%
1.97%
ITW
Illinois Tool Works Inc
Industrials
45
12.62%
2.43%
JNJ
Johnson & Johnson
Health Care
57
6.87%
2.56%
KMB
Kimberly-Clark
Consumer Staples
48
6.01%
2.98%
KO
Coca-Cola Co
Consumer Staples
57
6.91%
2.77%
LEG
Leggett & Platt
Consumer Discretionary
48
4.44%
3.14%
LIN
Linde plc
Materials
26
8.14%
1.67%
LOW
Lowe's Cos Inc
Consumer Discretionary
57
19.39%
1.83%
MCD
McDonald's Corp
Consumer Discretionary
44
8.72%
2.37%
MDT
Medtronic plc
Health Care
42
10.23%
1.81%
MKC
McCormick & Co
Consumer Staples
34
9.04%
1.44%
MMM
3M Co
Industrials
61
10.94%
3.23%
NUE
Nucor Corp
Materials
47
1.27%
3.20%
O
Realty Income Corp.
Real Estate
25
4.68%
3.62%
PBCT
People's United Financial
Financials
27
1.54%
4.48%
PEP
PepsiCo Inc
Consumer Staples
47
7.96%
2.67%
PG
Procter & Gamble
Consumer Staples
63
5.56%
2.38%
PNR
Pentair PLC
Industrials
44
0.54%
1.65%
PPG
PPG Industries Inc
Materials
48
6.40%
1.62%
ROP
Roper Technologies, Inc
Industrials
27
18.81%
0.54%
ROST
Ross Stores Inc.
Consumer Discretionary
25
24.95%
0.88%
SHW
Sherwin-Williams Co
Materials
41
12.28%
0.76%
SPGI
S&P Global
Financials
46
9.74%
0.77%
SWK
Stanley Black & Decker
Industrials
52
7.58%
1.66%
SYY
Sysco Corp
Consumer Staples
50
4.97%
2.18%
T
AT&T Inc
Communication Services
36
2.21%
5.40%
TGT
Target Corp
Consumer Discretionary
52
14.35%
2.31%
TROW
T Rowe Price Group Inc
Financials
33
11.76%
2.32%
UTX
United Technologies
Industrials
26
6.68%
1.92%
VFC
VF Corp
Consumer Discretionary
47
12.36%
2.27%
WBA
Walgreens Boots Alliance Inc
Consumer Staples
44
13.63%
3.52%
WMT
Wal-Mart
Consumer Staples
46
7.18%
1.85%
XOM
Exxon Mobil Corp
Energy
37
7.53%
5.25%

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%


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 done better as well.



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 350%. In other words, investing $100 in the Dividend Aristocrats list in January 2010 would have turned into $394.45. The same amount investing in S&P 500 would have turned into $364.15




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 2020 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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