5 Dividend Aristocrats That Have Been There Before

In sports after a player or team scores there is a celebration. Sometimes the celebration is extreme and designed to focus attention on the individual. As a kid growing up in the 70’s and 80’s this behavior was not tolerated. The coaches would say, “Act like you've been there before.” There is something to be said for those that consistently perform at the highest levels, like the Dividend Aristocrats.

The S&P 500 Dividend Aristocrats is a list of companies that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. A quarter of a century is a long time. Once a company has increased its dividend for that period of time, it would think twice before giving up its Aristocrat crown. This is an excellent place to look for potential dividend stocks. Here are five household names to consider:

1. McDonald’s Corporation (MCD) is the largest fast-food restaurant company in the world. Its restaurants serve a varied, yet limited, value-priced menu in more than 100 countries around the world. MCD has paid a cash dividend to shareholders every year since 1937 and has increased its dividend payments for 32 consecutive years. (Analysis)
2. Wal-Mart Stores, Inc. (WMT) is the largest retailer in North America. The company operates retail stores in various formats worldwide. It operates through three segments: Wal-Mart Stores, Sam’s Club, and International. WMT has paid a cash dividend to shareholders every year since 1973 and has increased its dividend payments for 35 consecutive years. (Analysis)
3. Abbott Laboratories (ABT) is engaged in the discovery, development, manufacture and sale of a diversified line of healthcare products including: drugs, nutritional products, diabetes monitoring devices and diagnostics. ABT has paid a cash dividend to shareholders every year since 1926 and has increased its dividend payments for 37 consecutive years. (Analysis)
4. PepsiCo, Inc. (PEP) is a global snack and beverage company. The Company manufactures, markets and sells a range of salty, convenient, sweet and grain-based snacks, carbonated and non-carbonated beverages and foods. PEP has paid a cash dividend to shareholders every year since 1952 and has increased its dividend payments for 37 consecutive years. (Analysis)
5. Lowe’s Companies, Inc. (LOW) and its subsidiaries operate as a home improvement retailer in the United States and Canada. The company offers a range of products and services for home decoration, maintenance, repair, remodeling, and property maintenance. LOW has paid a cash dividend to shareholders every year since 1961 and has increased its dividend payments for 46 consecutive years. (Analysis)

These companies, and the other companies on the Dividend Aristocrats list, have been there before. As previously noted, I am currently reworking my dividend analysis worksheets to focus on what’s most important in selecting a dividend stock. In the new analysis stocks that have increased their dividends in 15 or more years will earn a Star.

Full Disclosure: Long MCD, WMT, ABT, PEP, LOW. See a list of all my income holdings here.

Comments

[datadave:]

Ha, MCD "from 1937", maybe "'57" or "67"?

Jun 30 10:43 PM

[JayC:]

McDonalds definitely was not around in 1937.

Jul 01 08:05 AM

[indefinitelee:]

do you like PEP better than KO? Do you prefer one over the other or would you own both? I think you discussed this somewhat in a recent article.

what about finding stocks on the cusp of becoming Aristocrats or Achievers? Say stocks with 12 or 23 years of increases, respectively who project to join the ranks of Aristocrats or Achievers shortly?

Jul 01 09:59 AM

[Steve20423:]

I think there is typo MCD has paid a cash dividend to shareholders every year since 1937. 1937 should be 1973 it happens

Jul 01 01:32 PM

[user396040:]

I think this identifes a very sweet spot in the market. Barrons had a piece this weekend on how strong companies can now borrow money dirt cheap and have bonds that are trading at 20-25 times interest payments while the stock is trading at 12 times earnings. Some (like T) have higher dividends than interest yield. These strong companies will continue to pay dividends if we have an L shaped recession and will turn out to be a much better investment than treasuries. If we have a strong recovery, these stocks will rise - although they may lag the indices. I am now focused on KFT, MCD, MSFT, JNJ, PG, T, VZ , WMT, KO, PEP, etc.

Jul 01 02:55 PM

[manya05:]

Seen from the US, maybe PEP and KO look similar, but travel around the world and your perspective will be very different: PEP does not exist.

Jul 03 08:24 AM

[nathanredondo:]

All of these picks have two things in common: 1) they pay lousy dividends and 2) they have two much exposure to volatility in American consumer spending habits, which will almost certainly change in the next few years. Not sure how these represent "dividend champions" when I can get better yield buying TIPS (assuming I don't have a moral objection to enabling our wastral deficit spending).

My suggestions: Can Roys (ERF, COSW, HTE); Aberdeen Asian Fund (8% yield, blend of asian bond funds); (New Zealand Telecom) still up around 8-9%after some rise in the market. PAA and EPB- pipeline operators that pay around 8-12%, which along with KMP (at 7%) make good choices. More importantly, they are all long term hedges against a devaluation of the dolalr.

Jul 04 12:22 PM