Dividend Growth: This Year’s List of Aristocrats

An article in the Motley Fool defines and provides this year’s list of Dividend Aristocrats—companies in the S&P 500 that have paid  and increased their base dividends every year for at least 25 consecutive years.

Of the 57 companies listed, those with the longest record of dividend growth include 3M, Coca Cola, Colgate Palmolive, Johnson & Johnson and Procter & Gamble, all of which have increased dividends for 56 consecutive years. Cincinnati Financial touted the longest run at 59 years of consecutive dividend increases.

The article explains that for a company to make the list it must:

  • Be a member of the S&P 500.
  • Increase its per-share base dividend every year for at least 25 consecutive years.
  • Have a minimum market capitalization of $3 billion.
  • Average at least $5 million in daily share trading for the prior three months.

The article notes that qualifying companies are typically leaders in their industries with “durable competitive advantages, operations that generate strong and reliable cash flow, and track records of generating impressive annual returns over the long term.”

From 2009 through 2018, the article reports that the Dividend Aristocrats Index generated 14.65% in average annualized total returns. “Not only is that a solid result,” it argues, “it also beat the 13.44% in average total return from the S&P 500 over the same period.”