Dividend aristocrats are stocks that raise their dividends every year. Here’s an overview of how to invest in them. john D. Rockefeller once said, “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”
Whether you agree or not, you can’t blame Rockefeller for being excited about his dividend income. It’s a powerful tool for compounding wealth over the long term.
From January 2000 to January 2020, the s&p 500 index returned 129.95% without accounting for dividends. But if you had reinvested all of the dividends paid by the stocks in the index during that time, the return would’ve jumped up to 235.65%.
That said, there is a group of stocks within the S&P 500 that pays dividends much more reliably than other companies. That group is called the dividend aristocrats.
What is a dividend aristocrat?
A dividend aristocrat is an S&P 500 stock that has increased its dividend every year for at least 25 years.
Increasing its dividend means the company increased the dollar value of dividends per share. The dividend aristocrats don’t necessarily need to increase their dividend yields over time.
There are 66 dividend aristocrats today, and they’re a diverse bunch. They’re distributed across many different parts of the economy, including the health care, consumer staples, financial and industrial sectors.
However, they do have a couple of things in common. The first is that they’re established — to meet the 25-year-dividend-raiser criteria, they must have been a publicly traded company for at least 25 years. You won’t find any stock market newcomers such as Tesla among the dividend aristocrats.
Second, they are all large-cap stocks. To be dividend aristocrats, they must be S&P 500 companies, and in order to be S&P 500 companies, they must have a market capitalization of at least $13.1 billion.
The top 7 dividend aristocrats list
Below is a list of the top seven dividend aristocrats ordered by current dividend yield. This table is updated weekly.
| Ticker | Company | Dividend Yield |
|---|---|---|
| WBA | Walgreens Boots Alliance Inc | 6.90% |
| MMM | 3M Co. | 6.01% |
| O | Realty Income Corp. | 5.83% |
| AMCR | Amcor Plc | 5.31% |
| BEN | Franklin Resources, Inc. | 4.49% |
| FRT | Federal Realty Investment Trust. | 4.31% |
| CVX | Chevron Corp. | 4.17% |
Source: Finviz. Data is current as of Mar. 27, 2024 and is for informational purposes only.
Dividend kings vs. aristocrats
Stocks that have increased their dividends for at least 50 years are sometimes called “dividend kings.”
Unlike dividend aristocrats, dividend kings don’t need to be S&P 500 companies. Most are — and are therefore aristocrats as well as kings — but a few aren’t.
Still, the dividend kings are a smaller and more exclusive group than the dividend aristocrats — hence the name. While there are more than 60 dividend aristocrats at the time of writing, there are less than 50 dividend kings.
How to invest in dividend aristocrats
If you’re new to investing and want to buy the dividend aristocrats, the first step is to open a brokerage if you don’t already have one.
Then you’ll need to choose between investing in individual dividend aristocrat stocks, or investing in a dividend aristocrats fund.
Theoretically, individual stocks can beat funds and market indexes — but they can also be risky. It’s important to research stocks you’re intending to buy, and that can be time-consuming if you’re considering a lot of individual stocks. It can also be expensive to buy shares of a large number of individual stocks.
Dividend aristocrats ETFs
If you’re looking to gain exposure to the dividend aristocrats, but don’t want to spend the time and money to buy the individual stocks, you could consider buying exchange-traded funds, or ETF, that contain dividend-raising stocks instead.
The shares shown above have a combined market price of thousands of dollars — a steep purchase for most investors.
The ProShares S&P 500 Dividend Aristocrats ETF is the only one that strictly tracks the 66 official S&P 500 dividend aristocrats. There are a variety of other high dividend ETF that contain similar groups of stocks that consistently raise their dividends over time.
Ex-dividend dates
If you own a dividend-paying stock or ETF there is a date on which you have to be registered as a shareholder in order to actually receive your next dividend payment. This is called an ex-dividend date. If you bought a stock on or after its ex-dividend date, you wouldn’t get the next dividend.
The complete list of dividend aristocrats
Below is a list of all 66 dividend aristocrats in the S&P 500 index.
| Symbol | Company Name |
|---|---|
| NEE | NextEra Energy Inc. |
| CVX | Chevron Corp. |
| SHW | The Sherwin-Williams Co. |
| JNJ | Johnson & Johnson |
| CB | Chubb Ltd. |
| ABT | Abbott Laboratories |
| IBM | IBM Corp. |
| NDSN | Nordson Corp. |
| SPGI | S&P Global Inc. |
| APD | Air Products & Chemicals Inc. |
| ADP | Automatic Data Processing |
| MKC | McCormick & Co. |
| AFL | AFLAC Inc. |
| HRL | Hormel Foods Corp. |
| EMR | Emerson Electric Co. |
| LOW | Lowe’s Companies Inc. |
| KMB | Kimberly-Clark Corp. |
| ADM | Archer-Daniels-Midland Co. |
| BDX | Becton Dickinson & Co. |
| ALB | Albemarle Corp. |
| TROW | T. Rowe Price Group Inc. |
| BRO | Brown & Brown Inc. |
| ROP | Roper Technologies Inc. |
| MMM | 3M Co. |
| O | Realty Income Corp. |
| AMCR | Amcor plc |
| ED | Consolidated Edison Inc. |
| FRT | Federal Realty Investment Trust |
| CL | Colgate-Palmolive Co. |
| BEN | Franklin Resources Inc. |
| ATO | Atmos Energy Corp. |
| SYY | Sysco Corp. |
| GD | General Dynamics Corp. |
| SWK | Stanley Black & Decker Inc. |
| WMT | Walmart Inc. |
| BF/B | Brown-Forman Corp. |
| CAT | Carterpillar Inc. |
| XOM | Exxon Mobil Corp. |
| CTAS | Cintas Corp. |
| PG | The Procter & Gamble Co. |
| KO | The Coca-Cola Co. |
| WBA | Walgreens Boots Alliance Inc. |
| SJM | The J.M. Smucker Co. |
| MCD | McDonald’s Corp. |
| CAH | Cardinal Health Inc. |
| PEP | Pepsico Inc. |
| EXPD | Expeditors International of Washington Inc. |
| TGT | Target Corp. |
| CHRW | C.H. Robinson Worldwide Inc. |
| CHD | Church & Dwight Co. Inc. |
| MDT | Medtronic plc |
| PPG | PPG Industries Inc. |
| ITW | Illinois Tool Works |
| ESS | Essex Property Trust Inc. |
| GPC | Genuine Parts Co. |
| ABBV | AbbVie Inc. |
| ECL | Ecolab Inc. |
| DOV | Dover Corp. |
| LIN | Linde plc |
| PNR | Pentair plc |
| AOS | A.O. Smith Corp. |
| CLX | Clorox Company |
| CINF | Cincinatti Financial Corp. |
| NUE | Nucor Corp. |
| GWW | W.W. Grainger Inc. |
| WST | West Pharmaceutical Services |
Neither the author nor editor held positions in the aforementioned investments at the time of publication.
Read More Articles
7 Things for Choosing the Best Mutual Fund 2024
How to Invest in Mutual Funds in 2024
7 Best-Performing Tech Stocks for April 2024
FAQs about Investing in Dividend Aristocrats
A dividend aristocrat is an S&P 500 stock that has increased its dividend every year for at least 25 years. These companies demonstrate a strong commitment to returning value to shareholders through consistent dividend growth.
Currently, there are 66 dividend aristocrats in the S&P 500 index. These companies span various sectors of the economy and are characterized by their long track record of dividend increases.
Dividend kings are stocks that have increased their dividends for at least 50 consecutive years, making them an even more exclusive group than dividend aristocrats. While most dividend kings are also dividend aristocrats, not all dividend aristocrats meet the criteria to be classified as dividend kings.
Investors can invest in dividend aristocrats by either purchasing individual stocks or investing in dividend aristocrats ETFs (exchange-traded funds). Individual stock selection requires research and potentially higher costs, while ETFs offer diversified exposure to a basket of dividend-raising stocks.
Some examples of dividend aristocrats include well-known companies such as Johnson & Johnson (JNJ), 3M Co. (MMM), Chevron Corp. (CVX), and The Coca-Cola Co. (KO). These companies have a long history of increasing dividends annually.
