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Standard & Poor's Dividend Aristocrats are the elite dividend payers in the S&P 500. To be included, each company is required to have a minimum track record of 25 consecutive years of higher dividends. But this group has been shaken after the market meltdown. Seven banks in the group have been or will be dropped from the group after their dividend cuts. The most embarrassing was Bank of America (NYSE:BAC), a Dow stock, which 2 years ago bragged about its track record of growth (including dividends) especially over the previous 30 years. At the beginning of the credit crisis, thecompany raised the dividend to a $2.56 annual rate. Just a few months later, it must have regretted that decision. Now it only pays a token dividend, and rejoining this group is a minimum of 25 years away. Early this year, 3 prominent members of the group, Pfizer (NYSE:PFE), General Electric (NYSE:GE) and Masco (NYSE:MAS), cut their dividends which will take them off the list by December.

The S&P group has been reduced from about 60, to 51. By my calculations, at least 3 will be removed by year end. The number of new members must be small since these companies already need streaks of 23 or 24 years to be added to the group in the next year or two.

However their fundamentals remain. These are Warren Buffett's kind of stocks, with Coca Cola (NYSE:KO) as his largest single investment. Major ones which have already increased dividends this year include Dow stocks: 3M (NYSE:MMM), Coca Cola (KO), Johnson & Johnson (NYSE:JNJ), McDonald's (NYSE:MCD), Procter & Gamble (NYSE:PG) and Wal-Mart (NYSE:WMT). The remaining Dividend Aristocrats have generally grown stronger on a relative basis, especially those which have already increased dividends this year.

Below is the list (prepared by Standard & Poor's in March 2009) that I adjusted by deleting companies already announcing dividend cuts. In addition, Cincinnati Financial Corp (NASDAQ:CINF) and M&T Bank Corp (NYSE:MTB) each need a dividend increase by year's end to remain on the list. Based on estimates for 2009 EPS, each one should be considered "iffy" regarding another dividend increase. If there is no increase, that company will be dropped from the list. The remainder of the Dividend Aristocrat list (shown below) can be used for investment ideas. These companies have survived (and to some degree thrived) during the worst economic recession in 75 years. Dividends and dividend increases are important for successful investing. Data from Standard & Poor's shows that over the long term, 1/3 of gains come from dividends and 2/3 from growth. Yields from dividends provide significant help in achieving excellent rates of return for the very smart investor.

S&P Dividend Aristocrats

  • Abbott Laboratories (NYSE:ABT)
  • Archer-Daniels-Midland Co (NYSE:ADM)
  • Automatic Data Processing (NASDAQ:ADP)
  • Air Products & Chemicals Inc (NYSE:APD)
  • Avery Dennison Corp (NYSE:AVY)
  • Bard, C.R. Inc (NYSE:BCR)
  • Becton, Dickinson & Co (NYSE:BDX)
  • Bemis Co Inc (NYSE:BMS)
  • Chubb Corp (NYSE:CB)
  • Cincinnati Financial Corp (CINF)
  • Clorox Co (NYSE:CLX)
  • Centurytel Inc (NYSE:CTL)
  • Dover Corp (NYSE:DOV)
  • Consolidated Edison Inc (NYSE:ED)
  • Emerson Electric Co (NYSE:EMR)
  • Family Dollar Stores Inc (NYSE:FDO)
  • Gannett Co Inc (NYSE:GCI)
  • Grainger, W.W. Inc (NYSE:GWW)
  • Johnson Controls Inc (NYSE:JCI)
  • Johnson & Johnson (JNJ)
  • Kimberly-Clark (NYSE:KMB)
  • Coca-Cola Co (KO)
  • Leggett & Platt (NYSE:LEG)
  • Lilly, Eli & Co (NYSE:LLY)
  • Legg Mason Inc (NYSE:LM)
  • Lowe's Cos Inc (NYSE:LOW)
  • McDonald's Corp (MCD)
  • McGraw-Hill Cos Inc (MHP)
  • 3M Co (MMM)
  • M&T Bank Corp (MTB)
  • Pitney Bowes Inc (NYSE:PBI)
  • PepsiCo Inc (NYSE:PEP)
  • Procter & Gamble (PG)
  • PPG Industries Inc (NYSE:PPG)
  • Rohm & Haas Co (ROH)
  • Sherwin-Williams Co (NYSE:SHW)
  • Sigma-Aldrich Corp (NASDAQ:SIAL)
  • Questar Corp (NYSE:STR)
  • Supervalu Inc (NYSE:SVU)
  • Stanley Works (NYSE:SWK)
  • Integrys Energy Group Inc (NYSE:TEG)
  • Target Corp (NYSE:TGT)
  • VF Corp (NYSE:VFC)
  • Walgreen Co (WAG)
  • Wal-Mart Stores (WMT)
  • Exxon Mobil Corp (NYSE:XOM)

Disclosure: I own KO, LLY & VFC.

Source: These 47 S&P 500 Dividend Aristocrats Are Good Investment Opportunities