- The famous Dividend Aristocrats are a select group of S&P 500 stocks with 25+ years of consecutive dividend increases. These are all large US companies since they are part of the S&P 500 Index.
- Although quarterly dividend pay-outs and yearly consecutive dividend increases are not common in Europe, there is a list of European Dividend aristocrats.
- The European Dividend Aristocrats are a S&P Europe 350 index member and a track record of increasing or stable dividends for at least 10 consecutive years.
- In 2021, the European Dividend Aristocrats gained 30.87% compared to 26.07% for the S&P Europe 350 index.
Difference European and US Dividend Aristocrats
The S&P 500 applies the following criteria to construct the US 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 not sector allocation above 30%
The European Dividend Aristocrats are based (by S&P) on Eurozone companies within the S&P Europe 350 index and a managed dividends policy of increasing or stable dividends for at least 10 consecutive years.
The S&P Europe 350 index is a bit like the S&P 500 for the US.
Next to the currencies (EUR vs USD), the other major difference is:
- Increasing dividends for at least 10 consecutive years vs 25 consecutive years (US)
End of 2021, the European Dividend Aristocrats Index has 40 constituents.
The Dividend European Aristocrats Excel spreadsheet contains the following fundamental and stock price performance metrics for each stock in the index.
- Dividend & earnings per share
- Dividend Yield
- Pay-out ratio
Stock price performance metric (Members only):
- 1 yr price target
- 10 year weighted compound annual growth rate (WCAGR / GEOPAK10)
- Win factor
- Loss ratio
- Total return
Performance European Dividend Aristocrats
The European Dividend Aristocrats gained 30.87% in 2021, compared to the benchmark performance of 26.07%, 10 years annualized total return is 10.58%, compared to 10.41% for the benchmark index. The average P/E ratio is 22.08 and the indicated dividend yield is 2.38%. Overall a good performance and solid fundamentals. Below a chart of the historical performance since 2009.
As explained the European Dividend Aristocrats Index currently contains 40 stocks. As you can see below, the Industrials account for 22.9% of the index. The Utility sector and Communications Services are on the other end of the spectrum at less than 3% of the European Dividend Aristocrats Index. To compare, the largest US dividend aristocrats sector is Consumer Staples. (January-2022)
Top-10 European Dividend Yield
The table below list the top 10 European dividend aristocrats, sorted by dividend yield:
Please note that there is also an index created by S&P, named the Euro Dividend Aristocrats. This index is based on high yield stocks with a stable or increasing dividend of 10 years, see the Euro Dividend Aristocrats list.
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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