Dividend Aristocrats Performance: November 2024
About the S&P 500 Dividend Aristocrats Index
The Dividend Aristocrats are a select group of currently 65 S&P 500 stocks with 25+ years of consecutive dividend increases. These 65 are large, US companies that have historically provided (slightly) better performance and (slightly) lower volatility than the S&P 500 as a whole. They are the ‘upper class’ dividend growth stocks and a great source for dividend growth investors.
Dividend Aristocrats Members and Criteria
S&P 500 applies the following criteria to construct the Dividend Aristocrats list:
- must be members of the S&P 500
- must have increased dividends every year for at least 25 consecutive years
- Market Cap at least USD 3 billion
- Liquidity at least USD 5 million (average daily value traded)
- Diversification, at least 40 constituents and no sector allocation above 30%
Dividend Aristocrats that meet those criteria are added over time and a dividend cut will result in removal from the dividend aristocrats list. See how the list has changed since 2009.
Dividend Aristocrats Dashboard
Another source is our dividend aristocrats dashboard, which provides key data for free such as:
- Dividend Aristocrats Leaders (Year to Date)
- Dividend Aristocrats Laggards (Year to Date)
- Dividend Aristocrats with highest Dividend Yield
- Dividend Aristocrats with lowest Dividend Yield
- Undervalued Dividend Aristocrats
- Overvalued Dividend Aristocrats
- Dividend Aristocrats by Dividend Growth Rate
Performance: higher total returns with lower volatility
Higher total returns with lower volatility are typical characteristics of the Dividend Aristocrats. The Dividend Aristocrats have historically shown smaller draw-downs during recessions versus the S&P 500. For example in 2008 the Dividend Aristocrats Index declined 21.9%, compared to the S&P 500 declined by 37%. In 2018 the Dividend Aristocrats (-2.73%) also outperformed the S&P500 (-4.38%) by 1.65%.
In 2020, the Dividend Aristocrats (+8.68%) underperformed the S&P 500 index (+18.40%) by -9.72%, which is a lot.
The lower volatility gives some investors “peace of mind” but comes also with a price. In a bull market, like 2019, the Dividend Aristocrats typically underperform. In 2019, the Dividend Aristocrats ( 27.97%) underperformed the S&P 500 index ( 31.49%) by 3.52%
The table below lists the yearly performance of the Dividend Aristocrats, the S&P 500, and the difference between the two.
Some additional data on the Dividend Aristocrats Index:
- 10 Years annualized return: 14.75%
- 10 years annualized risk: 11.18%
- PE-ratio (trailing): 20.97
- Dividend yield: 2.43%
One good explanation for the current underperformance is the sector weighting of the Dividend Aristocrats. The dominating sectors are more defensive like Industrials (23.1%) and Consumer Staples (22.6%). The IT-sector represents only 1.7%.
Read also more about the yearly performance of the dividend aristocrats.
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