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Old 30-04-2019, 08:19 AM   #5
Mr. Wood
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Join Date: Oct 2013
Posts: 9,876
Seeking Income? Dividend Aristocrats Are King
By Robert Rapier

Investors seeking long-term dividend growth should become familiar with the S&P 500's Dividend Aristocrats.

By definition, a Dividend Aristocrat must be in the S&P 500 index and have recorded dividend increases for at least the past 25 consecutive years. A company must also meet certain market capitalization and liquidity requirements to appear on the list.

Why should investors care about this list? Dividend Aristocrats have historically outperformed the S&P 500. Over the past 10 years, the Dividend Aristocrats have earned 16.4% annually, versus 15.2% for the S&P 500. They have likewise outperformed the S&P 500 for the most recent one-year and five-year periods, but did lag the S&P 500 over the past three years.

There are two caveats I should mention on the Dividend Aristocrats. Even companies with a long track record of dividend increases can implode. General Electric (NYSE: GE) was on the list until 2010, and only came off after the share price had fallen more than 50% as a result of the financial crisis.

Second, you might expect that companies that have raised their dividends for at least 25 consecutive years would have attractive dividends. You would be wrong for the most part. Most of the companies on the list have yields that are pretty low for dividend investors.

Of the 57 companies on the current list, 43 yield less than 3%. The average yield for the entire list is 2.46%. But that's still a bit better than the S&P 500, which has seen its yield drop to 1.9%.
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