What are the dividend aristocrats?

Dividend aris­to­crats are large com­pa­nies in the S&P 500 that have increased their div­i­dend pay­ment for 25+ con­sec­u­tive years.

25 years is a long time. It’s worth pay­ing atten­tion when a com­pa­ny does some­thing con­sis­tent­ly for that long. Especially when we con­sid­er how every­one talks about “get­ting start­ed ear­ly” when invest­ing, but oth­er than answer­ing the ques­tion with the ques­tion (start ear­ly because you have more time), most peo­ple can’t tell you why start­ing ear­ly is impor­tant (com­pound­ing).

That line of think­ing takes us into what we mea­sure, but first, let’s under­stand a good place to find some of your first invest­ments: the div­i­dend aris­to­crats.

The most important thing

To be extra clear, these com­pa­nies increase their div­i­dend annu­al­ly.

That means, if you own these com­pa­nies, you get a raise every year.

It does­n’t get sim­pler than that. I could stop this post here and have told you every­thing I think is worth con­sid­er­ing, but I real­ize there are prob­a­bly a few more ques­tions you have.

Answers to your questions

In fact, read­ers often wish I’d includ­ed the list of div­i­dend aris­to­crats in my book. The thing is the list changes. There are 57 div­i­dend aris­to­crats at the moment, includ­ing four new com­pa­nies that were added to the list at the start of 2019.

Where do you find out about these com­pa­nies? How can you read more?

Do what I do. Head over to Sure Dividend for the cur­rent list of div­i­dend aris­to­crats. Even if you don’t sub­scribe, you can get tons of infor­ma­tion, includ­ing their annu­al review of each div­i­dend aris­to­crat and a spread­sheet that con­tains lots of infor­ma­tion about each com­pa­ny. There’s no page bet­ter for hav­ing one sin­gle place to track the div­i­dend aris­to­crats.

Feel free to reach out if you have fur­ther ques­tions, but it’s real­ly sim­ple. Increasing div­i­dends help you beat infla­tion and grow your div­i­dend pay­check sim­ply by hold­ing over time.

Companies that have a process that has worked to help them raise div­i­dends for decades are like­ly to con­tin­ue to pro­duce future rais­es. The com­mon refrain of “past per­for­mance is not an indi­ca­tor of future results”… is more about ass-cov­er­ing than human behav­ior. If a com­pa­ny has done some­thing for decades, it’s more like­ly to keep doing it (than if they did­n’t have such a long track record of the same behav­ior). Human behav­ior mat­ters.

That said, one com­pa­ny, in par­tic­u­lar, that is not a div­i­dend aris­to­crat has also talked about con­sis­tent div­i­dend increas­es. On Apple’s quar­ter­ly con­fer­ence call Tim Cook has men­tioned that they plan to increase the div­i­dend reg­u­lar­ly when they update investors on their cap­i­tal man­age­ment plans each April. You don’t need a crys­tal ball, just lis­ten to the CEO him­self tell you this.

Finally, if you’re curi­ous, there is a sub­class of div­i­dend aris­to­crat known as the div­i­dend kings that have 50+ years of annu­al div­i­dend increas­es.