- The Dividend Aristocrats lost 1.8% in September and lagged the broader S&P 500 which lost only 0.69%.
- The Dividend Aristocrats are a select group of currently 65 S&P 500 stocks with 25+ years of consecutive dividend increases.
- By showing the recent performance of the Dividend Aristocrats, some active dividend growth investors may be able to identify relative bargains.
The S&P 500 index (SPY) posted a loss of -0.69% last month November. Investors were concerned about the Omicron strain and increasing inflation fears. The Fed stated that inflation is not considered to be transitory and accelerated tapering is an option.
The European Central Bank (ECB) has still the opinion that this phase is temporary. European investors were not convinced and like the US investors were concerned about lockdowns and the COVID spread. The S&P Europe 350 finished with a loss of 2.5%, down more than 5% from its mid-month highs.
The Dividend Aristocrats Index clearly didn’t benefit in the third quarter from its tech underweight and Industrials/Materials overweight.
Historical Performance
The current 10-years annualized return is 14.78% for the Dividend Aristocrats (NOBL) versus 16.16% for the S&P 500.
Good to keep in mind that over a time period of 30 years and multiple recessions, the dividend aristocrats strategy has outperformed the S&P 500 by nearly 2% per year.
The current dividend yield is 2.42% well above the 1.37% for the S&P 500 index.
Dividend Aristocrats performance in November 2021
Gains for the Dividend Aristocrats were mixed in the month of September with 18 constituents with positive returns and 47 constituents with negative returns.
The table below lists all 65 constituents, including the three 2021 dividend aristocrats IBM, NextEra Energy & West Pharmaceutical Services, sorted by indicated dividend yield and lists price returns over trailing last month, 3-, 6-, and 12-month periods.
Here is what happened in November:
- Leggett & Platt (LEG) dropped almost 14% due to weaker earnings reports. Also, Medtronix (MDT) lost over 10% this month.
- A.O. Smith (AOS) achieves record sales driven largely by 50% price increases for water heaters, resulting in a 8.2% higher stock price.
- AT&T, Exxon Mobil, and IBM are the top-3 highest dividend yield payers.
The above-presented performance and earnings data on the Dividend Aristocrats could assist active dividend growth investors to find some bargains for the long run.
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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