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The S&P 500 Dividend Aristocrats Index is a very prestigious and popular index among dividend investors. It measures the performance of large cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years. The large-cap companies in this index must also have an average daily trading volume of at least $5 million for the six months prior to the index reference date.

Because of the recent economic downturn, Dividend Aristocrats became much more appealing to defensive investors. Below we compiled a list of the top 10 S&P 500 Dividend Aristocrats by YTD returns. The average YTD return of these 10 stocks is 17.23% vs. -5.17% for SPY. We think these 10 Dividend Aristocrats that are able to increase dividends are attractive options for defensive investors who demand better risk-return combination and some inflation protection.

Company Name

Symbol

Dividend Yield

YTD Return

VF Corp

VFC

2.06%

44.38%

McGraw-Hill Cos Inc

MHP

2.30%

21.06%

Consolidated Edison Inc

ED

4.24%

18.13%

Grainger, W.W. Inc

GWW

1.65%

15.98%

McDonald's Corp

MCD

2.81%

15.81%

Clorox Co

CLX

3.51%

13.82%

Kimberly-Clark

KMB

4.10%

12.43%

Cintas Corp

CTAS

1.57%

11.47%

Hormel Foods Corp

HRL

1.84%

9.71%

Abbott Laboratories

ABT

3.77%

9.48%

VF Corp (NYSE:VFC): VF is a global apparel company based in the United States. VFC has a 2.06% dividend yield and gained 44.38% since the beginning of this year. The stock has a market cap of $13.62B and a P/E ratio of 21.75.

McGraw-Hill Cos Inc (MHP): The McGraw-Hill Companies Inc. is a global information services provider serving the financial, education and business information markets. MHP has a 2.30% dividend yield and gained 21.06% since the beginning of this year. The stock has a market cap of $13.38B and a P/E ratio of 15.89. Barry Rosenstein had more than $300 million in MHP at the end of June. Jana Partners disclosed an activist position in MHP at the beginning of August.

Consolidated Edison Inc (NYSE:ED): Consolidated Edison provides electric service in New York City and most of Westchester County. It also provides natural gas service in Manhattan, the Bronx and parts of Queens and Westchester. ED has a 4.24% dividend yield and gained 18.13% since the beginning of this year. The stock has a market cap of $16.69B and a P/E ratio of 15.63. Michael Messner holds the largest position in ED. Jim Simons is another main holder of the stock.

Grainger, W.W. Inc (NYSE:GWW): Grainger is a distributor of maintenance, repair and operating supplies and other related products and services. GWW has a 1.65% dividend yield and gained 15.98% since the beginning of this year. The stock has a market cap of $11.33B and a P/E ratio of 19.25. Chuck Royce holds the largest position in GWW (check out Royce’s top stock picks).

McDonald’s Corp (NYSE:MCD): McDonald's Corp. is a large fast-food chain operating worldwide. MCD has a 2.81% dividend yield and gained 15.81% since the beginning of this year. The dividend payout ratio of MCD is 53%. The stock has a market cap of $90.95B and a P/E ratio of 17.82. Both Peter J. Eichler Jr. and James Crichton hold more than $150 million of MCD. Ric Dillon and Jim Simons are also among MCD investors (check out Jim Simons’ top stock picks).

Clorox Co (NYSE:CLX): Clorox Co. is a global company providing chemical and food products worldwide. CLX has a 3.51% dividend yield and returned 13.82% since the beginning of this year. CLX has a 61% dividend payout ratio. The stock has a market cap of $8.99B and a P/E ratio of 32.69. Carl Icahn’s Icahn Capital had $700 million in CLX at the end of June.

Kimberly-Clark (NYSE:KMB): Kimberly-Clark Corp. is a U.S. corporation that produces paper-based personal care products. KMB has a 4.10% dividend yield and returned 12.43% since the beginning of this year. The dividend payout ratio of KMB is 60%. The stock has a market cap of $26.80B and a P/E ratio of 16.18. Ric Dillon’s Diamond Hill had the largest position in KMB among the 300-plus funds we are tracking.

Cintas Corp (NASDAQ:CTAS): Cintas provides highly specialized products and services to businesses of all types. CTAS has a 1.57% dividend yield and returned 11.47% since the beginning of this year. The stock has a market cap of $4.14B and a P/E ratio of 18.85. Jean-Marie Eveillard holds more than $500 million in CTAS.

Hormel Foods Corp (NYSE:HRL): Hormel Foods Corporation is engaged in the production of a range of meat and food products and the marketing of those products. HRL has a 1.84% dividend yield and returned 9.71% since the beginning of this year. The stock has a market cap of $7.40B and a P/E ratio of 15.75. Chuck Royce had the largest position in HRL among the 300-plus funds we are tracking.

Abbott Laboratories (NYSE:ABT): Abbott Laboratories is a global healthcare company. ABT has a 3.77% dividend yield and returned 9.48% since the beginning of this year. The dividend payout ratio of the stock is 46%. ABT has a market cap of $79.48B and a P/E ratio of 15.55. Ken Fisher holds more than $400 Million of ABT (check out Fisher’s top stock picks).

Source: Top 10 Dividend Aristocrats In 2011