13 Dividend Aristocrats for Further Research

Last week I shared with you the list of 2016 Dividend Aristocrats and its performance over the past decade. In addition, I isolated twenty-one companies for further research. In order to come up with the list, I looked for companies where:

1) P/E was below 20

For those of you who have read my stock analyses, you know that these are just the beginning criteria I use to reduce the list of investable opportunities to a more manageable level.

I also looked for:

2) Dividend Payout Ratio below 60%
3) Minimum yield of 2%

If you want to add more quantitative criteria, I would look for companies where the 5 and 10 year dividend growth rate exceeds a certain percentage such as 5% or 6%/year on average. After that, I would look at trends in earnings per share, dividends per share, and dividend payout ratios to further isolate the companies which have managed to prosper. I do this in order to eliminate companies that have managed to grow dividends not because they prospered, but because they are simply paying a higher portion of earnings out to shareholders.

Below, you could find the list of companies for further research. You may also check linked analysis for more details on each company:

COMPANY	Ticker	SECTOR	Years	P/E - ttm	Yield	Payout Ratio	5 year Div Growth	10 Year Div Growth
AFLAC Inc	(AFL)	Financials	33	11.43	2.45	28.00%	6.75	13.64
Dover Corp	(DOV)	Industrials	53	12.08	2.54	30.68%	12.91	11.52
Walgreens Boots Alliance Inc	(WBA)	Consumer Staples	40	19.83	1.77	35.10%	17.42	19.50
Abbott Laboratories	(ABT)	Health Care	43	14.83	2.39	35.44%	11.60	10.60
Cardinal Health Inc	(CAH)	Health Care	28	20.49	1.84	37.70%	14.50	27.40
Stanley Black & Decker	(SWK)	Industrials	48	18.8	2.02	37.98%	9.82	6.50
Grainger W.W. Inc	(GWW)	Industrials	44	20.3	2	40.60%	17.15	17.44
Target Corp	(TGT)	Cons Discretionary	44	15.54	2.74	42.58%	20.79	19.62
Illinois Tool Works Inc	(ITW)	Industrials	44	20.44	2.1	42.92%	9.56	13.11
Wal-Mart Stores	(WMT)	Consumer Staples	39	15.11	2.91	43.97%	10.57	12.89
T Rowe Price Group Inc	(TROW)	Financial	29	16.53	2.82	46.61%	14.01	16.29
Emerson Electric Co	(EMR)	Industria	53	14.6	3.45	50.37%	6.90	8.35
Johnson & Johnson	(JNJ)	Health Care	53	20.11	2.73	54.90%	6.93	8.75

As a future retiree, I am looking for dependable dividend income which can grow above the rate of inflation. I plan on living off dividends in retirement. I am fine if I underperform all benchmarks out there, as long as my organic dividend income grows above the rate of inflation over time.

If an investor had decided to purchase more than one dividend stock at once, they could potentially use a low-cost broker like Motif Investing. Motif Investing would allow an investor to purchase up to 30 individual securities for a low price of $9.95/trade. This keeps costs low for anyone who invests $1,000 - $2,000 per transaction.

Full Disclosure: Long AFL, WBA, ABT, GWW, TGT, ITW, WMT, TROW, EMR, JNJ

Relevant Articles:

- Dividend Aristocrats List for 2016
- Dividend Aristocrats for Dividend Growth and Total Returns
- Margin of Safety in Dividends
- How to read my stock analysis reports
- The most important metric for dividend investing