The dividend growth rate (DGR) is an important aspect when analyzing dividend stocks, not only to identify the best dividend growers but also to help dividend investor to keep up with inflation.
Dividend growth means that the company should generate robust free cash flow. Free cash flow is defined as a company’s operating cash flow minus capital expenditures. The strong free cash flow allows a companies’ management to pay a higher dividend growth rate. Since 1990, the average or mean annual dividend growth rate for the S&P 500 index has been 6.04% through June 30, 2019.
For dividend aristocrats, we use the following indication for their dividend growth rate (3 years period):
DGR between 5% and 9%: average growth rate
DGR between 10% and 12.5%: fast growth rate
DGR above 12.5%: very fast growth rate
The table below lists the top ten dividend aristocrats and their current dividend yield, DGR for 3,5 and 10 years.
Name Ticker Sector Dividend Yield (%) 3 year Dividend Growth (%) 5 year Dividend Growth (%) 10 year Dividend Growth (%) Dividend increased years
Brown-Forman Corp.
BFB
Consumer Defensive
0.00
39.15
25.49
17.33
35
T. Rowe Price Group
TROW
Financial Services
0.00
37.76
27.65
19.43
33
Cintas Corporation
CTAS
Industrials
0.00
18.37
20.65
20.20
36
Abbott Laboratories
ABT
Healthcare
0.00
17.13
11.60
7.15
25
Lowe's Cos.
LOW
Consumer Cyclical
0.00
16.30
17.32
18.80
57
S&P Global, Inc.
SPGI
Financial Services
0.00
15.48
16.42
11.91
46
AbbVie Inc.
ABBV
Healthcare
0.00
13.15
17.93
0.00
25
A.O. Smith
AOS
Industrials
0.00
11.73
17.17
21.60
25
NextEra Energy, Inc
NEE
Utilities
0.00
11.53
12.10
10.84
25
Automatic Data Processing
ADP
Industrials
0.00
11.01
12.14
11.45
44
Air Products & Chemicals Inc
APD
Basic Materials
0.00
10.89
12.62
10.83
37
Roper Technologies
ROP
Industrials
0.00
10.89
13.40
17.73
26
Illinois Tool Works
ITW
Industrials
0.00
9.86
14.48
12.92
44
McCormick & Co.
MKC
Consumer Defensive
0.00
9.28
9.57
9.23
33
Caterpillar Inc.
CAT
Industrials
0.00
9.28
2.14
9.05
25
Atmos Energy Corporation
ATO
Utilities
0.00
8.87
8.36
6.47
25
Expeditors International of Washington, Inc
EXPD
Industrials
0.00
8.83
7.71
8.78
25
General Dynamics
GD
Industrials
0.00
8.76
9.47
9.82
28
Sysco Corp.
SYY
Consumer Defensive
0.00
8.51
24.30
5.87
51
AFLAC Inc
AFL
Financial Services
0.00
8.27
9.72
7.94
37
Medtronic plc
MDT
Healthcare
0.00
8.01
8.14
10.20
41
Target Corp.
TGT
Consumer Defensive
0.00
7.84
6.38
11.13
52
McDonald's Corp.
MCD
Consumer Cyclical
0.00
7.81
7.78
7.57
44
Cincinnati Financial
CINF
Financial Services
0.00
6.89
6.16
4.89
59
The Clorox Company
CLX
Consumer Defensive
0.00
6.87
7.65
7.04
41
PPG Industries
PPG
Basic Materials
0.00
6.71
7.70
7.18
50
West Pharmaceutical Services, Inc
WST
Healthcare
0.00
6.58
7.09
7.18
25
Procter & Gamble
PG
Consumer Defensive
0.00
6.17
4.93
5.15
62
Franklin Resources
BEN
Financial Services
0.00
5.95
8.84
17.78
39
Chevron Corp.
CVX
Energy
0.00
5.83
4.36
5.56
34
Johnson & Johnson
JNJ
Healthcare
0.00
5.78
5.87
6.42
57
PepsiCo Inc.
PEP
Consumer Defensive
0.00
5.78
7.48
7.69
46
Albemarle Corporation
ALB
Basic Materials
0.00
5.20
5.04
8.82
25
Stanley Black & Decker
SWK
Industrials
0.00
4.92
5.69
6.15
52
Ecolab Inc.
ECL
Basic Materials
0.00
4.89
6.55
10.40
27
Kimberly-Clark
KMB
Consumer Defensive
0.00
4.46
4.38
5.44
47
Genuine Parts
GPC
Consumer Cyclical
0.00
4.22
4.37
6.12
63
Walgreens Boots Alliance
WBA
Consumer Defensive
0.00
4.00
5.15
8.98
43
Essex Property Trust, Inc
ESS
Real Estate
0.00
3.96
5.49
7.23
25
Nucor Corp.
NUE
Basic Materials
0.00
3.65
2.67
1.66
46
Becton Dickinson
BDX
Healthcare
0.00
3.62
4.39
7.18
47
Leggett & Platt
LEG
Consumer Cyclical
0.00
3.44
4.38
4.20
49
Archer-Daniels-Midland Co
ADM
Consumer Defensive
0.00
3.37
4.28
8.49
44
Chubb Limited
CB
Financial Services
0.00
3.12
3.02
2.07
26
3M Company
MMM
Industrials
0.00
2.86
5.92
10.41
61
Consolidated Edison
ED
Utilities
0.00
2.72
2.95
2.59
45
Exxon Mobil Corp.
XOM
Energy
0.00
2.61
3.21
6.55
36
Colgate-Palmolive
CL
Consumer Defensive
0.00
2.55
2.92
4.66
56
Coca-Cola Company (The)
KO
Consumer Defensive
0.00
2.50
3.71
5.98
57
Realty Income Corp.
O
Real Estate
0.00
2.44
3.38
5.02
25
Amcor plc
AMCR
Consumer Cyclical
0.00
2.33
2.73
0.00
25
Wal-Mart Stores
WMT
Consumer Defensive
0.00
1.89
1.92
4.19
46
International Business Machines Corporation
IBM
Technology
0.00
1.79
3.56
8.49
25
Federal Realty Investment Trust
FRT
Real Estate
0.00
1.78
2.10
4.59
52
Dover Corp.
DOV
Industrials
0.00
1.55
2.96
7.35
64
Hormel Foods Corp.
HRL
Consumer Defensive
0.00
1.47
11.06
14.38
53
Emerson Electric Company
EMR
Industrials
0.00
1.44
1.28
3.53
62
People's United Financial
PBCT
Financial Services
0.00
1.41
1.43
1.49
26
V.F. Corp.
VFC
Consumer Cyclical
0.00
1.39
5.19
12.08
47
Grainger (W.W.) Inc.
GWW
Industrials
0.00
0.00
-100.00
-100.00
47
Linde plc
LIN
Basic Materials
0.00
0.00
0.00
0.00
25
Cardinal Health Inc.
CAH
Healthcare
0.00
-5.95
2.46
8.83
25
Pentair Ltd.
PNR
Industrials
0.00
-8.67
-9.80
0.00
43
Sherwin-Williams
SHW
Basic Materials
0.00
-13.84
-8.12
4.19
41