Dividend Aristocrats, Who They Are And Why They Matter

By: ispeculatornew
Date posted: 06.23.2011 (5:00 am) | Write a Comment  (2 Comments)

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If you are a passive income investor and have been researching dividend investing, you have surely run into multiple references to Dividend Aristocrats. They are usually deemed the best of the best in the dividend world. They might not be the most spectacular names but they are stocks that have been able to offer reliable payouts for a long period of time.

What Is A Dividend Aristocrat?

-The company must be part of the S&P500
-The company must have increased its dividend for at least 25 straight years
-A market cap of $3 billion or more
-Be an actively traded stock
-No sector will represent more than 30% of the index
-There is a minimum of 40 stocks included in the index

Who Maintains This List?

The Standard & Poors Company maintains the index. It is reviewed each December.

Why It Matters?

Since December 31st 1999, these stocks have returned 141% (including dividends) compared to the S&P 500’s return of close to 13%. Amazing isn’t it?

Can Dividend Aristocrats Keep Up This Payout?

It’s impossible to predict of course but one thing is that in sideway markets, investments like dividend stocks and covered call etf’s are generally expected to outperform other more volatile investments. Will it always be the case? Certainly not.

How Many Stocks Are Currently In This Index?

42! The top sector is consumer staples which includes companies such as Pepsi Co (PEP) and represents 26.2% while Consumer Discretionary is at 19.1% of the index (including companies such as McDonald’s (MCD).

As you can see, we already cover many of these stocks and will continue to do but I think it’s interesting to track this index, which companies are included in it. You can even track a similar index by buying SDY, the S&P ETF that tracks the S&P High Yield Dividend Aristocrats Index.

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2 Comments

  1. Pingback by Dividend Roundup Time — June 24, 2011 @ 6:02 am

    […] 8. Dividend Aristocrats, Who They Are And Why They Matter @ IS. […]

  2. […] Consistency : Recently, I discussed dividend aristocrats and how they have been able to keep paying and even increasing dividends for 25 years and counting. […]

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