To qualify for membership in the S&P 500 Dividend Aristocrats index, a stock must satisfy the following criteria:
1. Be a member of the S&P 500
2. Have increased dividends every year for at least 25 consecutive years
3. Meet minimum float-adjusted market capitalization and liquidity requirements defined in the index inclusion and index exclusion rules below.
The group of companies in the Dividend Aristocrats index tend to generate reliable dividend income, and provide the potential for strong total returns. The list is well diversified across sectors.
There are 53 companies in the Dividend Aristocrats index, after the committee dropped C.R. Bard (BCR) from the list. The company is being acquired by Becton Dickinson (BDX).
The three new additions include Praxair (PX), A.O. Smith (AOS) and Roper Technologies (ROP)
The 2018 Dividend Aristocrats are listed below:
Symbol
|
Name
|
Years
of Annual Dividend Increases
|
Trailing
P/E
|
Dividend
Yield
|
10
Year Dividend Growth
|
ABBV
|
AbbVie Inc.
|
45
|
26.31
|
2.70%
|
12.40%
|
ABT
|
Abbott Laboratories
|
45
|
51.03
|
1.89%
|
10.53%
|
ADM
|
Archer Daniels Midland
|
42
|
20.08
|
3.00%
|
10.78%
|
ADP
|
Automatic Data Proc.
|
43
|
30.59
|
2.06%
|
10.99%
|
AFL
|
AFLAC Inc.
|
35
|
12.99
|
2.04%
|
8.08%
|
AOS
|
A.O. Smith Corp.
|
25
|
33.04
|
1.08%
|
16.98%
|
APD
|
Air Products & Chem.
|
35
|
12.75
|
2.24%
|
9.63%
|
BDX
|
Becton Dickinson & Co.
|
46
|
52.68
|
1.28%
|
11.61%
|
BEN
|
Franklin Resources
|
38
|
15
|
2.02%
|
14.87%
|
BF-B
|
Brown-Forman Class B
|
34
|
35.76
|
1.17%
|
8.51%
|
CAH
|
Cardinal Health Inc.
|
30
|
21.56
|
2.53%
|
19.71%
|
CINF
|
Cincinnati Financial
|
57
|
25.57
|
2.60%
|
3.53%
|
CL
|
Colgate-Palmolive Co.
|
54
|
29.85
|
2.08%
|
8.55%
|
CLX
|
Clorox Company
|
40
|
26.89
|
2.34%
|
7.99%
|
CTAS
|
Cintas Corp.
|
35
|
33.02
|
0.98%
|
15.30%
|
CVX
|
Chevron Corp.
|
30
|
38.03
|
3.30%
|
6.69%
|
DOV
|
Dover Corp.
|
62
|
24.29
|
1.78%
|
10.96%
|
ECL
|
Ecolab Inc.
|
26
|
31.21
|
1.19%
|
12.40%
|
ED
|
Consolidated Edison
|
43
|
20.21
|
3.59%
|
1.75%
|
EMR
|
Emerson Electric
|
61
|
30.99
|
2.65%
|
5.88%
|
FRT
|
Federal Realty Inv. Trust
|
50
|
30.02
|
3.21%
|
5.37%
|
GD
|
General Dynamics
|
26
|
21.46
|
1.62%
|
11.54%
|
GPC
|
Genuine Parts Co.
|
61
|
23.79
|
2.58%
|
6.47%
|
GWW
|
W.W. Grainger Inc.
|
46
|
34.19
|
2.23%
|
14.21%
|
HRL
|
Hormel Foods Corp.
|
52
|
22.03
|
2.15%
|
16.32%
|
ITW
|
Illinois Tool Works
|
43
|
26.81
|
1.80%
|
11.61%
|
JNJ
|
Johnson & Johnson
|
55
|
307.23
|
2.37%
|
7.44%
|
KMB
|
Kimberly-Clark Corp.
|
45
|
19.29
|
3.29%
|
6.75%
|
KO
|
Coca-Cola Company
|
55
|
46.09
|
3.12%
|
7.94%
|
LEG
|
Leggett & Platt Inc.
|
46
|
19.48
|
3.04%
|
7.18%
|
LOW
|
Lowe's Companies
|
55
|
25.64
|
1.53%
|
19.31%
|
MCD
|
McDonald's Corp.
|
42
|
25.42
|
2.28%
|
9.83%
|
MDT
|
Medtronic plc
|
40
|
23.88
|
2.16%
|
14.24%
|
MKC
|
McCormick & Co.
|
32
|
29.18
|
2.10%
|
8.92%
|
MMM
|
3M Company
|
59
|
28.17
|
1.91%
|
9.37%
|
NUE
|
Nucor Corp.
|
45
|
20.08
|
2.20%
|
9.13%
|
PEP
|
PepsiCo Inc.
|
45
|
24.98
|
2.65%
|
8.90%
|
PG
|
Procter & Gamble Co.
|
61
|
23.56
|
3.10%
|
7.25%
|
PNR
|
Pentair Ltd.
|
42
|
22.19
|
1.91%
|
8.69%
|
PPG
|
PPG Industries Inc.
|
46
|
19.04
|
1.54%
|
5.24%
|
PX
|
Praxair Inc.
|
25
|
29.07
|
1.98%
|
10.13%
|
ROP
|
Roper Technologies Inc.
|
25
|
40.51
|
0.60%
|
18.34%
|
SHW
|
Sherwin-Williams Co.
|
39
|
37.33
|
0.79%
|
10.44%
|
SPGI
|
S&P Global Inc.
|
44
|
26.73
|
0.90%
|
7.18%
|
SWK
|
Stanley Black & Decker
|
50
|
21.37
|
1.45%
|
7.09%
|
SYY
|
Sysco Corp.
|
48
|
29.29
|
2.27%
|
5.68%
|
T
|
AT&T Inc.
|
34
|
18
|
5.38%
|
3.28%
|
TGT
|
Target Corp.
|
50
|
15.99
|
3.17%
|
16.72%
|
TROW
|
T. Rowe Price Group
|
31
|
19.22
|
1.93%
|
12.86%
|
VFC
|
VF Corp.
|
45
|
34.04
|
2.28%
|
11.93%
|
WBA
|
Walgreens Boots Alliance Inc.
|
42
|
21.59
|
2.08%
|
16.21%
|
WMT
|
Wal-Mart Stores Inc.
|
44
|
28.3
|
1.93%
|
9.39%
|
XOM
|
ExxonMobil Corp.
|
35
|
28.75
|
3.49%
|
8.37%
|
The index has generated strong total returns over time past decade. I wanted to note that in 2008, the Dividend Aristocrats index declined by 21.88%. The S&P 500 however declined by 37%. The dividend aristocrats index tends to shine during bear markets and low return environments. However, it also pulls its weight when we are in a bull market too. It is the best of both worlds really.
I first stumbled upon the Dividend Aristocrats index in late 2007, and instantly understood why dividend growth investing is such a powerful wealth generating tool. If someone had invested in the Dividend Aristocrats index after reading my review of the list at the beginning of 2008, they would have tripled their money.
As I gained more experience however, I have gravitated more towards the Dividend Champions list, which is maintained by Dave Fish. The Dividend Champions list is more complete, as it doesn’t exclude companies due to low liquidity, or due to market capitalization below a certain threshold. In addition, I find that historically, the list of Dividend Champions has followed a more consistent approach than the list of Dividend Aristocrats.
When I review the list of historical changes in the Dividend Aristocrats index, I see some inconsistencies in the way portfolio components are added or removed.
For example, the Dividend Aristocrats index removed Altria in 2007, after it spun-off Kraft Foods and as a result its dividend decreased. It could be argued that the dividend income for the investor was not decreased, because they kept getting a dividend from Altria as well as dividends from Kraft Foods.
The S&P committee seems to have rectified this issue, and have kept both Abbott and Abbvie after legacy Abbott Laboratories split in two companies in early 2013.
Ironically, Dave Fish has Altria listed as a Dividend Champion. However, he doesn’t have Abbott nor Abbvie listed as a dividend champion ( they are listed as Dividend Aristocrats however).
This is why you need to perform your own checks as an investor.
In addition, I wanted to let you know that I would not purchase all companies from either lists blindly. I run my entry criteria screen to come up with a list of companies for further research. Before investing in any individual stock, I research it enough to gain some understanding of the business and its trends in fundamentals.
Relevant Articles:
- Dividend Champions, Contenders & Challengers: The most complete list of US dividend growth stocks available
- Dividend Aristocrats List for 2017
- Dividend Aristocrats for Dividend Growth and Total Returns
- Where are the original Dividend Aristocrats now?
- Historical changes of the S&P Dividend Aristocrats
- Why do I like the Dividend Aristocrats?
- Dividend Aristocrats List for 2016
