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The S&P 500 Dividend Aristocrats Index is a very prestigious and popular index among dividend investors. The Index measures the performance of blue-chip S&P 500 companies that have increased their dividends 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.

A previous articles on Seeking Alpha I indicated that the Dividend Aristocrats Index beat the S&P 500 index over the past 1, 3, 5 and 7 years. Since the beginning of 2011, the companies in the S&P 500 Dividend Aristocrats Index returned -4.1 % vs. -8.7% loss for the S&P 500 index. Average dividend pay-out ratio of all 42 stocks in the S&P 500 Dividend Aristocrats Index is 44%, while the average dividend yield of all 42 stocks is 3.1%.

The market data are sourced from Standard & Poors and Fidelity

Below, we compiled a list of 21 stocks from the S&P 500 Dividend Aristocrats Index and showed how they have performed this year:

Company Name

Ticker

Dividend Yield

Dividend Payout Ratio 2010

YTD Return

CenturyLink Inc

CTL

8.8%

86%

-24.3%

Cincinnati Financial Corp

CINF

6.1%

96%

-13.4%

Consolidated Edison Inc

ED

4.2%

70%

19.1%

Abbott Laboratories

ABT

3.8%

46%

9.7%

Clorox Co

CLX

3.6%

57%

7.4%

AFLAC Inc

AFL

3.4%

22%

-36.9%

Bemis Co Inc

BMS

3.3%

47%

-8.2%

Emerson Electric Co

EMR

3.3%

51%

-26.3%

Automatic Data Processing

ADP

3.1%

61%

4.1%

3M Co

MMM

3.1%

38%

-15.3%

Air Products & Chemicals

APD

2.9%

46%

-14.3%

Coca-Cola Co

KO

2.8%

54%

4.9%

Dover Corp

DOV

2.7%

36%

-19.1%

Chubb Corp

CB

2.7%

26%

2.5%

Exxon Mobil Corp

XOM

2.6%

30%

1.1%

Archer-Daniels-Midland Co

ADM

2.6%

21%

-16.3%

Becton, Dickinson & Co

BDX

2.2%

33%

-11.9%

Brown-Forman Corp B

BF.B

1.9%

33%

1.7%

Cintas Corp

CTAS

1.7%

33%

0.6%

Ecolab Inc

ECL

1.4%

30%

-2.0%

Bard, C.R. Inc

BCR

0.9%

14%

-4.1%

AVERAGE

3.18%

44%

-6.70%

Since the beginning of this year, the average YTD return of these 21 stocks was -6.7% vs. -8.7% for the S&P 500 index. All these stocks except two – CTL and CINF – have dividend payout ratio of less than 75%. The average dividend pay-out ratio of those stocks is 44% and the average dividend yield is 3.18%.

Here are the 10 highest dividend yielding stocks in our list:

CenturyLink Inc. (NYSE:CTL): CenturyLink Inc. is a leading integrated communications company providing Internet services in the United States. CTL recently traded at $33.59 and has a 8.8% dividend yield. CTL lost 24.3% since the beginning of this year. The stock has a market cap of $19.9B and a P/E ratio of 16. Phill Gross has the largest CTL position among the 300-funds we are tracking.

Cincinnati Financial Corp. (NASDAQ:CINF): Cincinati Financial Corp. is a U.S. insurance company specialized in property casualty insurance. CINF has a 6.1% dividend yield, but lost 13.4% since the beginning of this year. The stock has a market cap of $4.3B and a P/E ratio of 14.6. Jean-Marie Eveillard’s First Eagle had more than $300 Million in CINF at the end of June 2011.

Consolidated Edison Inc. (NYSE:ED): Consolidated Edison Inc. is an energy company providing electric, gas and steam utility services in the United States. ED has a 4.2% dividend yield and returned 19.1% since the beginning of this year. The stock has a market cap of $16.7B and a P/E ratio of 15.7. Michael Messner and Jim Simons are the most prominent ED investors.

Abbott Laboratories (NYSE:ABT): Abbott Laboratories is a large healthcare company operating worldwide. ABT has a 3.8% dividend yield and returned 9.7% since the beginning of this year. The stock has a market cap of $79.6B and a P/E ratio of 15.6. Ken Fisher holds nearly $500 Million of ABT.

Clorox Co (NYSE:CLX): Clorox Co. is a global company that provides food and chemical products worldwide. CLX has a 3.63% dividend yield and returned 7.4% since the beginning of this year. The stock has a market cap of $8.7B and a P/E ratio of 16.48. Carl Icahn’s Icahn Capital had more than $800 Million in CLX at the end of June.

AFLAC Inc (NYSE:AFL): AFLAC Inc. is an American company providing supplemental insurance services. AFL has a 3.4% dividend yield but lost 36.9% since the beginning of this year. The stock has a market cap of $16.3B and a P/E ratio of 9.2. Robert Pohly’s Samlyn Capital has the largest AFL position among the funds we are tracking.

Bemis Co Inc. (NYSE:BMS): Bemis Co Inc. is an US company supplying flexible packaging products in the United States. BMS has a 3.3% dividend yield but lost 8.2% since the beginning of this year. The stock has a market cap of $3B and a P/E ratio of 14.6. Chuck Royce and Phill Gross are among BMS investors.

Emerson Electric Co. (NYSE:EMR): Emerson Electric Co. is a global conglomerate providing a wide range of engineering and technology products and related services. EMR has a 3.3% dividend yield but lost 26.3% since the beginning of this year. The stock has a market cap of $30.8B and a P/E ratio of 12.7. Ken Fisher holds more than $250 million of EMR.

Automatic Data Processing (NASDAQ:ADP): Automatic Data Processing is one of the leading providers of integrated computing services in the world. ADP has a 3.1% dividend yield and returned 4.1% since the beginning of this year. The stock has a market cap of $23.1B and a P/E ratio of 18.7. Jean-Marie Eveillard’s First Eagle had more than $150 Million in ADP at the end of June 2011.

3M Co. (NYSE:MMM): 3M Co. is a large American conglomerate providing a wide range of diversified technology products worldwide. MMM has a 3.1% dividend yield but lost 15.3% since the beginning of this year. The stock has a market cap of $51B and a P/E ratio of 12.2. Jean-Marie Eveillard is the most prominent MMM investor, holding $600 Million of the stock.

Continue to Part II >>

Source: Investing In S&P 500 Dividend Aristocrats, Part I