What is an S&P 500 Dividend Aristocrat?

In a previous post I reviewed my quick checklist for buying dividend paying stocks. One of the parameters was they had to be a Dividend Aristocrat. I received e-mails asking me to define Dividend Aristocrat.

Aristocracy comes from the Greek wordἀριστοκρατία aristokratía, from ἄριστος aristos “excellent,” and κράτος kratos “power”. It´s a form of government that is roughly translated as “the rule of the best”. In the case of the S&P500 Dividend Aristocrats, it means the group of the best dividend paying stocks in the S&P 500. They are defined as stocks that have been increasing  their dividend payouts in the past 25 consecutive years and must have a float adjusted market capitalization of over $3 billion, and have an average daily trading volume of at least $5 million.

Think about this, a Dividend Aristocrat is a business that over the last 25 years has been increasing the dividends it pays to its owners. Talk about consistency. These are businesses that can make money and grow throughout a business cycle. They are stable performers.

Only a few companies can make the Dividend Aristocrat cut. In 2013 the following 41 companies made the list:

  • 3M Co.
  • Abbott Laboratories
  • AFLAC Inc.
  • Air Products & Chemicals
  • Archer-Daniels-Midland Co.
  • AT&T
  • Automatic Data Processing
  • Bard, C.R. Inc.
  • Becton, Dickinson & Co.
  • Bemis Co Inc.
  • Brown-Forman Corp B
  • Chubb Corp
  • Clorox Co.
  • Coca-Cola Co.
  • Colgate-Palmolive Co.
  • Consolidated Edison Inc.
  • Dover Corp.
  • Emerson Electric Co.
  • Exxon Mobil Corp.
  • Family Dollar Stores Inc.
  • Franklin Resources
  • Genuine Parts Co.
  • Grainger, W.W. Inc.
  • Johnson & Johnson
  • Kimberly-Clark
  • Leggett & Platt
  • Lowe’s Cos Inc.
  • McDonald’s Corp.
  • McGraw-Hill Cos Inc.
  • Medtronic Inc.
  • PepsiCo Inc.
  • Pitney Bowes Inc.
  • PPG Industries Inc.
  • Procter & Gamble
  • Sherwin-Williams Co
  • Stanley Black & Decker
  • Sysco Corp.
  • Target Corp.
  • VF Corp.
  • Wal-Mart Stores
  • Walgreen Co.

If you are new to dividend investing, then Dividend Aristocrat list is a good place to start. It does have its flaws, which we will review in future post. For now, if I were to start a new dividend portfolio I would definitely select a couple of the companies in this list.

Do you know any of the companies in this list?

Have a profitable day!


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