Imagine taking an hour’s stroll along the golden sands on a deserted beach, and returning home to find your bank account a few hundred dollars fatter. Or simply receiving a couple of thousand dollars every month as you lived out your retirement without any money worries.
And while it sounds too good to be true, dividend aristocrats really do have the ability to unlock the path towards a worry-free retirement for the ‘lifestyle’ investor.
So What is a Dividend Aristocrat
There are currently 65 Dividend Aristocrats. It’s an elite list of stocks with certain characteristics that make them highly attractive to dividend investors. Over the long term, Dividend Aristocrats have a history of providing market-beating total returns.
To qualify as a Dividend Aristocrat, a company must satisfy these three requirements:
- It must be an S&P 500 company
- It must pay consistent dividends and have increased its dividend for at least 25 years running
- It must have a market capitalization of at least $3 billion
Advantages of Investing In a Dividend Aristocrat
Most dividend aristocrats are large and established companies that have a durable moat or competitive advantage in their market space. This enabled them to weather multiple market changes and probably even went through a few recessions themselves.
And in order to increase its dividends, a company must be able to grow its earnings and have healthy, predictable cash flow. And to be able to increase its dividends for 25 years straight really speaks volumes about the business.
So, in a nutshell, investing in a dividend aristocrat gives you:
- Access to a stable company with a track record of predictable earnings and cashflow.
- Income or cash flow (in the form of dividends) even during a recession.
- ‘Pay’ raise (in the form of dividends) every year
- Likely some form of capital gains in the long term.
Dividend Aristocrats for 2023
There are currently 65 Dividend Aristocrats and here is the current list of Dividend Aristocrats for 2023:
| Ticker | Name | Industry | Dividend Yield |
| MMM | 3M | Industrial Conglomerates | 4.68% |
| AOS | A. O. Smith | Building Products | 2.02% |
| ABT | Abbott Laboratories | Health Care Equipment | 1.83% |
| ABBV | AbbVie | Biotechnology | 3.59% |
| AFL | Aflac | Life and Health Insurance | 2.38% |
| APD | Air Products and Chemicals | Industrial Gases | 1.99% |
| ALB | Albemarle | Specialty Chemicals | 0.60% |
| AMCR | Amcor | Paper Packaging | 3.90% |
| ADM | Archer-Daniels-Midland | Agricultural Products | 1.72% |
| ATO | Atmos Energy | Gas Utilities | 2.50% |
| ADP | Automatic Data Processing | Data Processing/Outsourced Services | 1.91% |
| BDX | Becton, Dickinson and Company | Health Care Equipment | 1.43% |
| BRO | Brown & Brown | Insurance Brokers | 0.78% |
| BF.B | Brown-Forman Corporation | Distillers and Vintners | 1.19% |
| CAH | Cardinal Health | Health Care Distributors | 2.53% |
| CAT | Caterpillar | Construction Machinery/Heavy Trucks | 2.04% |
| CVX | Chevron | Integrated Oil and Gas | 3.27% |
| CB | Chubb | Property and Casualty Insurance | 1.53% |
| CHD | Church & Dwight | Household Products | 1.28% |
| CINF | Cincinnati Financial | Property and Casualty Insurance | 2.57% |
| CTAS | Cintas | Diversified Support Services | 0.99% |
| CLX | Clorox | Household Products | 3.20% |
| KO | Coca-Cola | Soft Drinks | 2.75% |
| CL | Colgate-Palmolive | Household Products | 2.39% |
| ED | Consolidated Edison | Multi-Utilities | 3.21% |
| DOV | Dover | Industrial Machinery | 1.42% |
| ECL | Ecolab | Specialty Chemicals | 1.39% |
| EMR | Emerson Electric | Electrical Components and Equipment | 2.12% |
| ESS | Essex Property Trust | Residential REITs | 3.94% |
| EXPD | Expeditors International of Washington | Air Freight and Logistics | 1.19% |
| XOM | Exxon Mobil | Integrated Oil and Gas | 3.39% |
| FRT | Federal Realty | Retail REITs | 3.98% |
| BEN | Franklin Resources | Asset Management and Custody Banks | 4.33% |
| GD | General Dynamics | Aerospace and Defense | 2.03% |
| GPC | Genuine Parts Company | Distributors | 2.01% |
| HRL | Hormel Foods | Packaged Foods and Meats | 2.36% |
| ITW | Illinois Tool Works | Industrial Machinery | 2.32% |
| IBM | International Business Machines | IT Consulting and Other Services | 4.38% |
| JNJ | Johnson & Johnson | Pharmaceuticals | 2.52% |
| KMB | Kimberly-Clark | Household Products | 3.35% |
| LEG | Leggett & Platt | Home Furnishings | 5.22% |
| LIN | Linde | Industrial Gases | 1.37% |
| LOW | Lowe’s | Home Improvement Retail | 1.99% |
| MKC | McCormick & Company | Packaged Foods and Meats | 1.80% |
| MCD | McDonald’s | Restaurants | 2.22% |
| MDT | Medtronic | Health Care Equipment | 3.39% |
| NEE | NextEra Energy | Electric Utilities | 1.95% |
| NUE | Nucor | Steel | 1.34% |
| PNR | Pentair plc | Industrial Machinery | 1.89% |
| PEP | PepsiCo | Soft Drinks | 2.50% |
| PPG | PPG Industries | Specialty Chemicals | 1.85% |
| PG | Procter & Gamble | Household Products | 2.40% |
| O | Realty Income | Retail REITs | 4.58% |
| ROP | Roper Technologies | Application Software | 0.62% |
| SPGI | S&P Global | Financial Exchanges and Data | 0.95% |
| SHW | Sherwin-Williams | Specialty Chemicals | 0.93% |
| SWK | Stanley Black & Decker | Industrial Machinery | 3.87% |
| SYY | Sysco | Food Distributors | 2.38% |
| TROW | T. Rowe Price | Asset Management and Custody Banks | 3.89% |
| TGT | Target | General Merchandise Stores | 2.86% |
| VFC | V.F. Corporation | Apparel, Accessories and Luxury Goods | 7.18% |
| GWW | W.W. Grainger | Trading Companies and Distributors | 1.18% |
| WBA | Walgreens Boots Alliance | Drug Retail | 4.68% |
| WMT | Walmart | Hypermarkets and Super Centers | 1.52% |
| WST | West Pharmaceutical Services | Life Sciences Tools and Services | 0.30% |
Dividend Aristocrats ETFs
There really are 2 ways when it comes to investing in dividend aristocrats. You either buy them as individual stocks or have them in a basket through ETFs.
While the returns and dividends may not be as attractive as picking the individual dividend aristocrats, an ETF does provide the diversification needed to protect your portfolio.
For those who are interested in buying an aristocrat ETF:
ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
NOBL invests in the traditional large-cap S&P 500 Aristocrats, while SDY invests in a broader set of S&P Aristocrats of all market-caps. Both NOBL and SDY’s expense ratio stands at at affordable 0.35%.
Who Should Invest In a Dividend Aristocrat?
While there are a lot of good things to say about dividend aristocrats, growth may be limited for this group of stocks. Generally speaking, the more the company pays out its dividends, the less it can reinvest in growing the company. That said, however, we can still expect a 5 – 10% growth for most dividend aristocrats when held over the long term – excluding dividends.
And since the companies within this group have an established track record of paying reliable and consistent dividends, Dividend aristocrats are great for Investors who are seeking a reliable, long-term income and who have a low appetite for risk.