- The Dividend Aristocrats are a select group of currently 65 S&P 500 stocks with 25+ years of consecutive dividend increases.
- These 65 are large, US companies that have historically provided (slightly) better performance and (slightly) lower volatility than the S&P 500 as a whole.
- Prior to the stock market opening on February 1, 2021, three new Dividend Aristocrats will be added and three will be deleted.
- By showing the recent performance of the Dividend Aristocrats, some active dividend growth investors may be able to identify relative bargains.
US equities struggled in the last week of January, the S&P 500 declined by 1%. The Dividend Aristocrats ended this month down -1.86%. The investors struggled with the rising coronavirus infections and the transition to a new president. Volatility spiked, as the short squeeze (Gamestop, AMC,..) mounted among retail investors, with the VIX closing the month at 33.09.
Dividend aristocrats underperforming
A steep sell-off in the last week of this month hit the US Dividend Aristocrats as well and is showing mixed performances for its members. The 10 years annualized total returns of the Dividend Aristocrats and the S&P 500 are almost alike with 13.51% for the aristocrats and 13.5% for the SPX.
The table below lists all 63 constituents, excluding the added spin-offs Carrier Global (CARR) and Otis Worldwide (OTIS), with indicated dividend yield and lists returns over trailing last month, 3-, 6-, and 12-month periods.
Key takeaways for January:
- 21 dividend aristocrats generated a positive return, while 4 aristocrats lost more than 10% this month.
- Walgreens Boots Alliance Inc (WBA) traded 26% higher. Walgreens’ new CEO hire helps to extend its big January rally
- Coca-Cola (KO) closed the month down with -12.20%. The bottling company struggled with three downgrades in one week.
- Exxon Mobil (XOM) is still the aristocrat with the highest dividend yield (7.52%)
The average dividend yield is 2.57% for all dividend aristocrats, below the top-10 highest-yielding aristocrats.
The above-presented performance data of the Dividend Aristocrats could assist active dividend growth investors to find some bargains for the long run. Interested in the latest data and also dividend growth rates, check our dividend aristocrats dashboard.
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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