Following the 2008 meltdown in stocks, dividend strategies have become popular because they provide steadier returns. One such dividend strategy is buying stocks with long histories of increasing dividends. These strategies often start with the requirement that the stocks are constituents of the S&P Dividend Aristocrat index. However, I think there are a few stocks that are worth looking at that are not in the S&P Dividend Aristocrat index.
Universal Corporation (UVV) is one such stock. UVV has raised its dividend for much more than 25 years, but isn’t in the S&P Dividend Aristocrat index because it is too small. With a market cap of just less than $1 billion, it is currently in the S&P 400 index. Yet even though it is not a large cap, its yield is an attractive 4.66%.
Mercury General (MCY) is another S&P 400 stock worth looking at. Even though it has only raised its dividend for 20 years, it has a higher yield of 5.59%.
Atmos Energy Corporation (ATO) is yet another midcap stock that may be overlooked. It has 22 years of consecutive dividend increases and currently has a dividend yield of 4.53%.
Piedmont Natural Gas (PNY) has managed to increase its dividend for 30 years. Given such a history, its 3.78% yield seems safe even though it is a small cap stock.
Genuine Parts Company (GPC) is a slightly larger company with a long history of dividend increases. Its 53 years of consecutive raises makes it a true dividend aristocrat. With the longer history also comes greater confidence, and the dividend yield, while not as high, is still considerably above average at 3.4%.
In conclusion, a quick look makes these five stocks appear to be good investments. However, such a short glance at just their dividend characteristics shouldn’t be the only factors in determining whether to buy. A broader analysis using more indicators should be done before buying.
Disclosure: No positions.