Top 10 Dividend Aristocrats for Long-Term Returns
February 8, 2023
These Dividend Aristocrats Are the Best Stocks for Income Investors
What’s better than a bullish stock? A bullish stock that pays dividends. What’s even better than that? A bullish stock that increases its dividends each year for decades at a time. These stocks, the crème de la crème of Wall Street, are called dividend aristocrats.
Dividend aristocrats are S&P 500-listed companies that have increased their dividends each year for at least 25 consecutive years, have a market cap of at least $3.0 billion, and have an average daily value traded of at least $5.0 million over the last three months.
Dividend aristocrats should be on the radar of any investor who’s looking for passive income and long-term financial stability. Why? If a company can raise its payout annually when times are good and bad—including recessions, wars, and pandemics—then you know it’s an established business with products and/or services that are in demand regardless of what’s happening on Wall Street and Main Street. In other words, the company makes boatloads of money no matter what.
Their rising dividends, coupled with rising share prices, mean dividend aristocrats tend to outperform the S&P 500 over the long term and are an excellent way to fight inflation and stock market volatility. Since the start of 2014, when the ProShares S&P 500 Dividend Aristocrats ETF (BATS:NOBL) paid its first dividend, the exchange-traded fund’s price has climbed by 159.6%. Over that time frame, the S&P 500 has advanced 127.9%.
Last year, the dividend aristocrats held up well amid rising interest rates and decades-high inflation. This is a testament to their strong business operations and cash flow generation.
Chart courtesy of StockCharts.com
The dividend aristocrat list isn’t static; companies get added every year when they hit the 25-year threshold for raising their dividends annually. Just recently, CH Robinson Worldwide Inc (NASDAQ:CHRW), J M Smucker Co (NYSE:SJM), and Nordson Corp (NASDAQ:NDSN) were added to the list, which now numbers at 67. (Source: “J.M. Smucker Among the 3 Newcomers to Dividend Aristocrats,” Barron’s, January 24, 2023.)
Not all dividend aristocrats are created equal; some of them experience static or negative periods. Below are the dividend aristocrats that have provided the highest overall returns (with dividends reinvested) over the last five years.
Best 10 Dividend Aristocrats for Long-Term Gains
Nucor Corporation (NYSE:NUE) manufactures and sells steel and steel products. The company’s business segments include Steel Mills, Steel Products, and Raw Materials.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 1.2% | 50 | 36% | 33% | 58% | 269.4% | 199.6% |
WW Grainer Inc (NYSE:GWW) is a business-to-business distributor of maintenance, repair, and operating products and services. Its operations are primarily in North America, Japan, and the U.K. The products that the company provides include safety and security supplies; material handling and storage equipment; pumps and plumbing equipment; cleaning and maintenance supplies; and metalworking and hand tools.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 1.2% | 51 | 15.4% | 25.2% | 35.8% | 86.0% | 182.4% |
Cintas Corporation (NASDAQ:CTAS) provides work uniforms, promotional items, facility services, safety training, and related services in the U.S., Canada, and Latin America. Its business segments include First Aid and Safety Services, and Uniform Rental and Facility Services.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 1.0% | 40 | 4.5% | 5.8% | 16.4% | 39.8% | 182.0% |
Albemarle Corporation (NYSE:ALB) develops and manufactures specialty chemicals. It has leading positions in bromine, lithium, and refining catalysts. Its customers include companies in the automotive, construction, consumer electronics, crop protection, energy storage, lubricant, petroleum refining, and pharmaceutical sectors.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 0.6% | 27 | 2.6% | 19.5% | 27.8% | 74.4% | 179.6% |
Target Corporation (NYSE:TGT) operates approximately 2,000 discount stores in the U.S. It sells a wide assortment of general merchandise and food. The company’s product categories include apparel and accessories; beauty and household essentials; food and beverage; and home furnishings and decor.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 2.6% | 54 | 13.3% | 11.8% | 18.8% | 1.1% | 178.6% |
West Pharmaceutical Services Inc. (NYSE:WST) designs, manufactures, and sells containment and delivery systems for injectable drugs and health-care products. It operates through two business segments: Proprietary Products and Contract-Manufactured Products.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 0.3% | 30 | 28.3% | -16.7% | -31.4% | -8.2% | 175.1% |
Lowe’s Companies Inc (NYSE:LOW) is a home improvement retailer that operates in the U.S. and internationally. The company offers a wide range of products for construction, decorating, maintenance, remodeling, and repairs. Its product categories include appliances; building materials; decor; electrical; flooring; kitchens and bath; lawn and garden; lighting; lumber; paint; rough plumbing; seasonal and outdoor living; and tools.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 2.0% | 60 | 20.7% | 19.5% | -5.1% | 38.0% | 139.2% |
Brown & Brown, Inc. (NYSE:BRO) is a diversified financial services company that markets and sells insurance, primarily in the casualty, employee benefits, and property areas.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 0.79% | 29 | 2.7% | -6.2% | -13.1% | 32.7% | 131.0% |
Archer-Daniels-Midland Co (NYSE:ADM) is an agricultural company that procures, transports, stores, processes, and merchandises agricultural commodities, ingredients, and other products around the world. The company operates through three business segments: Ag Services and Oilseeds; Carbohydrate Solutions; and Nutrition.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 2.2% | 48 | -14.5% | -0.5% | 8.5% | 59.7% | 126.4% |
S&P Global Inc (NYSE:SPGI), through its subsidiaries, provides analytics, benchmarks, credit ratings, and workflow solutions in the global capital, commodity, and automotive markets. The company’s business divisions include S&P Dow Jones Indices, S&P Global Commodity Insights, S&P Global Engineering Solutions, S&P Global Market Intelligence, S&P Global Mobility, and S&P Global Ratings.
| Dividend Yield | Years of Dividend Increases | Three-Month Return | Six-Month Return | One-Year Return | Two-Year Return | Five-Year Return |
| 0.95% | 50 | 24.8% | 5.2% | -7.4% | 19.2% | 122.5% |
The Lowdown on Dividend Aristocrats
When it comes to long-term investment growth, it’s tough to compete with dividend aristocrats.
Not only do they provide stock investors with high share-price gains, but they’ve also increased their dividends annually for at least 25 years. That means shareholders can rely on these dividend stocks for reliable annual pay raises no matter what’s going on in the economy.
