The Dividend Kings are the best in class with respect to dividend endurance. A Dividend King is a stock with 50 or more consecutive years of dividend increases. The Dividend Kings list can be a good source for selecting dividend stocks.

While the S&P Dividend Aristocrats Index consists of over 60 stocks, which includes companies in the S&P 500 Index that have raised their dividend for at least 25 consecutive years, there are only 28 dividend kings in 2020.

The latest companies to join the dividend kings list are H.B. Fuller Company (FUL) and Altria Group (MO). Due to a merger in 2019 Vectren Corporation (VVC) is no longer a King. Commerce Bancshares (CBSH) reached the “King status” in 2018. In 2017,  Stepan Company (SCL), Stanley Black & Decker (SWK), SJW Group (SJW), California Water Service (CWT), and Federal Realty Investment Trust (FRT) became dividend kings.

 

Performance Dividend Kings

The performance of the 2019 Dividend Kings (portfolio 1 equal-weighted) can be back-tested against the S&P 500, but this historical performance is just an indication, since the list of is “kings” changing every year and certainly not comparable to the list in 1998. The performance chart is also excluded FMCB since the historical data is not always available.

Dividend kings

dividend kings performance

In general, as expected the Dividend Kings outperform the S&P 500, due to the dividend growth and “a better” worst year, making it easier to recover a drawdown. Below the data for the period January 1993 – December 2019

Portfolio Initial Balance Final Balance CAGR Stdev Best Year Worst Year Max. Drawdown Sharpe Ratio Sortino Ratio US Mkt Correlation
Portfolio 1 $10,000 $272,929 13.03% 12.11% 40.56% -13.22% -30.78% 0.88 1.36 0.79
Vanguard 500 Index Investor $10,000 $123,485 9.76% 14.19% 37.45% -37.02% -50.97% 0.56 0.81 0.99

 

The compounding effect of dividend and the dividend growth of the dividend kings is an important benefit for investors. This strength is clearly shown in the chart below.

Dividend kings - dividend income growthDividend Kings Analysis

Here is the list of Dividend Kings per sector:

Basic Materials

  • Stepan (SCL)
  • H.B. Fuller Company (FUL)

Consumer Cyclical

  • Genuine Parts Company (GPC)
  • Lowe’s Companies (LOW)
  • Target Corporation (TGT)

Consumer Defensive

  • The Colgate-Palmolive Company (CL)
  • Hormel Foods Corporation (HRL)
  • The Coca-Cola Company (KO)
  • Lancaster Colony (LANC)
  • Procter & Gamble (PG)
  • Tootsie Roll Industries (TR)
  • Altria Group (MO)

Financial Services

  • Cincinnati Financial (CINF)
  • Farmers & Merchants Bancorp (FMCB)
  • Commerce Bancshares Inc. (CBSH)

Healthcare

  • Johnson & Johnson (JNJ)

Industrial

  • ABM Industries (ABM)
  • Dover Corporation (DOV)
  • Emerson Electric (EMR)
  • 3M Company (MMM)
  • Nordson (NDSN)
  • Parker Hannifin (PH)
  • Stanley Black & Decker (SWK)

Real Estate

  • Federal Realty Investment Trust (FRT)

Utilities

  • American States Water (AWR)
  • California Water Service (CWT)
  • Northwest Natural Gas (NWN)
  • SJW Group (SJW)

 

Other Sources of Dividend Investment Ideas

The Dividend Aristocrats list is not the only way to quickly screen for businesses that regularly pay rising dividends.

  • 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 on 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 year of dividend can be an list of inspiration.

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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