Summary
- The European Dividend Aristocrats are companies in the S&P Europe 350 index that have followed a policy of consistently increasing dividends every year for at least 10 consecutive years.
- Full-year 2020 performance European Dividend Aristocrats -3.79%, versus the S&P Europe 350 index -2.79%.
- The European Dividend Aristocrats still outperformed the benchmark over the last 10 years.
European Dividend Aristocrats
The European Dividend Aristocrats list entails European stocks with 10+ consecutive years of dividend increases. The stock should be a member of the S&P Europe 350 Index, which is a kind of S&P 500 version for the European stock market. The index is equally weighted and annually rebalanced in January. In total there are 39 companies meeting the requirements to be a European Aristocrat. The US Dividend Aristocrats counts currently 65 members with 25 years of consecutive dividend increases.
European Dividend Aristocrats performance
In 2020, European Dividend Aristocrats generated a total return of -3.79%, versus -2.79% for its benchmark the S&P Europe 350 index. Which is a slight underperformance. The average dividend yield is 3.09% and the projected P/E 19.4, which are sound numbers. The annualized total return over the last 10-years is 8.62% for the European Dividend Aristocrats, versus 7.07% for the benchmark. This is a strong annual outperformance of 1.55%. The positive effect of the outperformance is clearly visible in the data and charts below.
Sector overview of the Dividend Aristocrats
As explained the European Dividend Aristocrats Index currently contains 39 stocks. As you can see below, the Industrials account for 22.5% of the index. The Utility sector is on the other end of the spectrum at less than 5% of the European Dividend Aristocrats Index. The contribution of the IT-sector is higher than the US-version of the Aristocrats.
As a reference, the largest US dividend aristocrats sector is Industrials (24.4%) and the smallest are IT (1.7%) and communication services (1.5%). (31-Dec-2020)
Other Sources of Dividend Investment Ideas
There are several lists to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Aristocrats Index is based on 64 companies part of the S&P 500 and with 25+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of less than 20 businesses with 50+ years of consecutive dividend increases.
- The MoneyInvestExpert Defensive Aristocrats is a performance-based top-10 selection of the Dividend Aristocrats to outperform the market in the long-term.
- Portfolio lists like the Berkshire Hathaway Portfolio or Bill Gates’stock portfolio can be a source.
- For the European focused investors, there is also the list of European Dividend Aristocrats.
- Dividend Champions are not necessarily members of the S&P 500 index, have increased their dividend for 25 or more consecutive years.
- 100+ years of dividend, the list of stocks that pay over 100 years of dividend can be a list of inspiration.
- Blue Chips stocks from the US or the European ones.
Next to selecting the right dividend stocks, important principles for successful long-term investing are Disciple, Diversification, Defensive & indeed Dividend. Read more about this in our free e-book.
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