The Dividend Aristocrats list is a select group of companies in the S&P 500 Index that have increased dividends every year for the last 25 straight years. These members are probably the most well-known dividend stocks globally. The question is how to compare and selected dividend stocks, factoring in different dividend yields and dividend growth values over time.
Price versus total return charts
When comparing dividend stocks it is important to look at Total Return performance charts and not just price charts, which is often the case on a financial website. Dividends contribute to more than one-third of the long-term total return from equity investments, so an important factor. (See: Why are dividends important?)
The chart below illustrates the difference between the total return of the S&P 500 (SPX) and the price return of McDonald’s (MCD) over 10 years timespan.
When switching from price return to total return for McDonald’s (MCD), the impact of dividends and dividend growth is clearly visible, as shown in the chart below.
Furthermore, the comparison between the total return of for example the S&P 500 (SPX) and McDonald’s (MCD) is now like-for-like.
Top-5 total return dividend aristocrats
Here are the top-5 dividend aristocrats worthwhile considering as a long-term dividend growth investor, when focussing on total return performance over 10 years.
Investing 10k in S&P Global (SPGI) makes a major difference, not only compared to the S&P 500 but also to the worst performers such as Exxon Mobil (XOM), see the two charts below.
Member use the Dividend aristocrats total return screener to see all
Please keep in mind: Past performance is no guarantee of future results, not all dividend aristocrats mentioned were already a member 10 years ago.
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.
Also, our monthly newsletter and premium member data will help you to invest smarter.
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