Dividend increases are amazingly powerful in their impact on the compounding of dividend “paychecks,” especially for people with a long term focus on building wealth. Increases compound over time, but also ensure protection of the dividend “paycheck” from inflation.
A New Dividend King
There are currently only 19 dividend kings, companies with 50+ consecutive years of dividend increases.
California Water Services ($CWT) was added to the list recently.
Two New Dividend Aristocrats
Dividend aristocrats have “only” 25+ years of consecutive dividend increases. There are now 51 dividend aristocrats, with two new additions:
- General Dynamics ($GD)
- Federal Reality Investment Trust ($FRT)
A Dividend Aristocrat Cuts its Dividend
One company, HCP ($HCP), has reduced its dividend and been removed from the list.
I like to point this out because nothing, even dividend aristocrat dividend raises, is ever risk free. The important thing when developing and reinforcing an investing habit though is not just how well you do, but how well you can make sense of what happens. When a dividend is cut, especially from a dividend aristocrat, it makes sense — results haven’t been sustainable. This in comparison to a stock price fluctuation that seems dissociated from the company’s performance.
Have you ever heard a company that posts good results, but the stock price goes down? Doesn’t seem to make sense, right? But it might — maybe the stock was trading on “expectations” and these results were good, but didn’t meet expectations, and so it falls… this is the sort of stuff individual investors can’t really keep up with, and on the surface is confusing and demotivating. That’s why tracking the long term performance of dividend increases makes a good measure — it’s not susceptible to the “mystery of” expectations-driven volatility.
You can download the full list of dividend aristocrats and some basic (but useful) analysis from Sure Dividend.
If you want to learn my unique metrics for tracking dividend raises and long term investing success, subscribe to my free email course where you will learn about four key metrics for tracking dividend portfolios, how to get started with as little as $10, and receive a spreadsheet template for tracking your own portfolio once you do: