dividend aristocrats
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The Complete Dividend Aristocrats List of 2021

Dividend aristocrats are powerful companies that are listed in the S&P 500 index. These companies have been paying dividends for at least 25 years, consistently. Some companies have been paying dividends for more than 60 years. Apart from that, aristocrat companies also increase the total size of their annual dividend payouts to shareholders.

Before we continue, let us show you just how important dividend aristocrat stocks are.

Let’s imagine that we’re in 1995 and that you have $1,000 to invest. You are going to make a really bad choice, and invest all your money in one stock.

That company is International Business Machines (IBM)and it’s traded at $20 per stock. So, you purchase 50 shares.

IBM has a 5.5% yearly dividend yield, paid out quarterly. Since IBM is a dividend aristocrat, the expected annual dividend increases by roughly 0.5% each year, while the share price goes up by roughly 7%.

Now, let’s pretend that for 25 years you take all those annual dividends and reinvest them by buying more IBM stocks.

Welcome back to early 2021. Let’s look at your investment. These numbers are going to shock you.

Because you’ve used your dividends to buy more IMB stock, your 50 shares are now 195. The price per share went up from $20 to $108.55. This means that your $1,000 investment is now worth $21,167.25. On top of that, your annual dividend income is $1,182.69, more than your initial investment.

How Can a Company be Considered a Dividend Aristocrat?

In order to become a dividend aristocrat, a company needs to be a publicly traded entity with a consistent record of paying dividends for a minimum of 25 years. On top of that, it needs to increase its dividend payout each year.

However, dividend aristocrat companies are rare. Typically, there will usually be less than 100 dividend aristocrat companies listed in the S&P 500 index at any given time. This year, for example, there are only 65 dividend aristocrats in the S&P 500 index.

CompanySectorYears of dividend growth
3M (MMM)Industrials63
A.O. Smith Co. (AOS) Industrials28
Abbot Laboratories (ABT) Healthcare49
AbbVie Inc. (ABBV) Healthcare49
Aflac Inc. (AFL) Financials38
Air Products and Chemicals Inc. (APD)Materials39
Albemarle Corp. (ALB)Materials27
Amcor PLC (AMCR)Materials38
Archer-Daniels-Midland Co. (ADM)Consumer Staples47
AT&T (T)Communications services36
Atmos Energy Corp. (ATO)Utilities34
Automated Data Processing Inc. (ADP)Information technology46
Becton, Dickinson & Co. (BDX)Health care49
Brown-Forman Corp. (BF-B)Consumer staples37
Cardinal Health Inc. (CAH) Health care 34
Caterpillar Inc. (CAT) Industrials 27
Chevron Corp. (CVX) Energy34
Chubb Ltd. (CB) Financials28
Cincinnati Financial Corp. (CINF) Financials61
Cintas Corp. (CTAS) Industrials37
The Clorox Co. (CLX) Consumer staples45
Coca-Cola (KO)Consumer staples59
Colgate-Palmolive (CL) Consumer staples 57
Consolidated Edison Inc. (ED) Utilities47
Dover (DOV)Industrials65
Ecolab Inc. (ECL)Materials29
Emerson Electric Co. (EMR)Industrials59
Essex Property Trust Inc. (ESS)Real estate27
Expeditors International of Washington Inc. (EXPD)Industrials27
ExxonMobil Corp. (XOM) Energy37
Federal Realty Investment Trust (FRT) Real estate49
Franklin Resources Inc. (BEN)Financials40
General Dynamics Corp. (GD)Industrials 30
Genuine Parts (GPC)Consumer Discretionary65
Hormel Foods Corp. (HRL)Consumer staples55
Illinois Tool Works Inc. (ITW)Industrials50
International Business Machines Corp. (IBM)Information technology25
Johnson & Johnson (JNJ)Health care59
Kimberly-Clark Corp. (KMB)Consumer staples48
Leggett & Platt Inc. (LEG)Consumer discretionary50
Linde PLC (LIN)Materials28
Lowe's Companies Inc. (LOW)Consumer discretionary47
McCormick & Co. (MKC)Consumer staples35
McDonald's Corp. (MCD)Consumer discretionary44
Medtronic PLC (MDT)Health care43
NextEra Energy Inc. (NEE)Utilities25
Nucor Corp. (NUE)Materials48
Pentair PLC (PNR)Industrials44
People's United Financial Inc. (PBCT)Financials28
PepsiCo Inc. (PEP)Consumer staples48
PPG Industries Inc. (PPG)Materials 49
The Procter & Gamble Co.(PG)Consumer staples 65
Realty Income Corp. (O)Real estate 26
Roper Technologies Inc. (ROP)Industrials 28
S&P Global Inc. (SPGI)Financials 48
Sherwin-Williams Co. (SHW)Materials 42
Stanley Black & Decker Inc. (SWK)Industrials 53
Sysco Corp. (SYY)Consumer staples 41
T. Rowe Price Group Inc. (TROW)Financials 35
Target Corp. (TGT)Consumer discretionary49
VF Corp. (VFC)Consumer discretionary49
W.W. Grainger Inc. (GWW)Industrials50
Walgreens Boots Alliance Inc. (WBA)Consumer staples45
Walmart Inc. (WMT)Consumer staples48
West Pharmaceutical Services Inc. (WST)Health care28

Should I Invest in Dividend Aristocrats?

There are a couple of powerful reasons why you should start investing in dividend-paying companies. For example, companies that consistently increase their dividend yields every year tend to provide benefits such as stock investing profits, minimized portfolio risk, tax benefits, etc. Let’s dive into why you should invest in dividend aristocrat companies.

Consistent Growth Equals Rising Profits

One of the best reasons for investing in dividend aristocrat companies is that their dividends typically increase over time. Established and highly stable companies that have been paying dividends for more than 25 years have the power to increase their dividend yield every year. Numerous dividend aristocrat companies continue to increase their dividends every year. And according to a 10-year analysis of DA companies, it was revealed (as of July 2021) that the overall CAGR (compounded annual growth rate) of S&P 500 DA companies stands at 2.23%.

Earning Dividends is a Great Way to Hedge against Inflation

Dividends can also be an ideal way to protect your returns on investment against inflation. 

For example, if you’ve purchased stocks that have increased in price by over 2% during a year – and if the inflation rate is at 3%, you’ve actually experienced a 1% loss of your capital’s purchasing power. But if that very same stock increases its price by 2% and pays a dividend yield of 2%, your investment has proven to be profitable in countering inflation. Your purchasing power has increased! The best thing about dividend aristocrats is the fact that many continually stay ahead of inflation.

Dividend Aristocrats ETFs

ETFs (exchange-traded funds) are a diversified portfolio of several securities that you can trade, buy, or sell through the stock exchange. You can invest in virtually any type of instrument or asset class when it comes to ETFs. In this case, you can invest in an ETF that tracks all the dividend aristostract in the S&P 500 index

The Similarities Between ETFs and Stocks

Let’s quickly list some important similarities:

  • You can trade ETFs or stocks on any exchange.
  • You can use ETFs and stocks to diversify your investment portfolio and invest in different companies throughout the world.
  • You have various choices when it comes to ‘order types’ for both types of investments.
  • Both ETFs and stocks (companies) make dividend payouts to their investors.

The Differences Between ETFs and Stocks

Some stark differences between the two types of investments:

  • ROI vs. Risks. Investing in individual stocks can expose you to many risks due to the high probability of significant price swings. Plus, you’re susceptible to losing much of your investment if the company ends up performing poorly. ETFs, however, are a diversified basket of different stocks from a variety of companies. And because of this diversification, even if one or two companies perform poorly, your investment will be leveraged by the other, high-performing stock in your portfolio.
  • Diversification Costs. If you want to achieve optimal portfolio diversification with stocks, you have no choice but to keep investing in multiple companies, individually.

Because ETFs are an amalgamation of a variety of shares spread out in multiple companies, you can use your portfolio to get a favorable diversification without putting up a lot of money than you would have to if you bought these shares individually.

Due Diligence and Research

If you decide to invest in stocks, you’ll have to do all the due diligence yourself. You’ll need to decide when to buy and sell. Sure, some investors like to do all the research themselves, but for some, the process is overwhelming.

ETFs are managed by professionals in line with the objectives mentioned in the fund’s catalog. So that means all the leg work, buying, and selling will be done by a professional on your behalf. However, keep in mind that you’ll have to pay a certain fee to the ETF fund for these services.

Dividend aristocrats are a great way to create a passive income stream. Over time, a few small investments can turn into a significant source of income. Just look at the example we gave you in the beginning on this article.

Now that you know how good dividend aristocrats are, it's time to invest. If you don't know where to start, try our comparison tool and find the best investment app for your needs.

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