Key points:
- The UK Dividend Aristocrats Index is created by S&P and is based on a managed dividends policy of increasing or stable dividends for at least 10 consecutive years.
- Only 39 UK stocks are a member of this list.
- In Europe, it is not common to focus on paying a dividend in a row ( consecutive years) to the shareholders.
In 2021, the UK Dividend Aristocrats index produced a total return of 14.83%. As a reference, the S&P United Kingdom gained almost 20% in 2021.
The annualized total return over 10 years is 6.19% for the UK Dividend Aristocrats. The indicated dividend yield is around 4.7% and the average projected PE is 14.1 for the stocks in this index.
New UK Dividend aristocrats added to the index in 2022 are:
- Spirax-Sarco Engineering PLC
- Hikma Pharmaceuticals Plc
- Bunzl plc
- IG Group Holdings plc
By end of October, Wm Morrison shares have been delisted from the London stock exchange after 54 years as a public company. Hence, Wm Morrison is no longer part of the UK Dividend Aristocrats list.
In June 2021, S&P has announced an update to the Monthly Dividend Review (“MDR”) for the UK and high-yield euro dividend aristocrats.
A relevant change is to focus more on the quality of dividend. The Constituent Selection Rule is now:
“Stocks must have increased or maintained stable dividends for at least 10 consecutive years. Stocks cannot have an indicated yield of more than 10% as of the index rebalancing reference date. In addition, new index constituents must have a maximum 100% dividend payout ratio, and existing index constituents must have a non-negative dividend payout ratio”
New UK Dividend aristocrats added to the index in July 2021 are:
- Diploma plc
- BAE Systems plc
- Electocomponents plc
- Rio TInto Group plc
- Dechra Pharmaceuticals plc
- Admiral Group
- Primary Health Properties plc
The table below lists all current 39 constituents, with indicated dividend yield and lists returns over trailing last month, and year-to-date.
The average dividend yield for all the UK dividend aristocrats is around 5% at the moment of writing. Here are the 10 highest UK dividend aristocrats yields:
Other Sources of Dividend Investment Ideas
There are several lists to quickly screen for businesses that regularly pay rising dividends.
- The Dividend Aristocrats Index is based on 64 companies part of the S&P 500 and with 25+ years of consecutive dividend increases.
- 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 in 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 years of dividend can be a list of inspiration.
- Blue Chips stocks from the US or the European ones.
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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