S&P 500 Dividend Aristocrats

The Dividend Aristocrats are S&P 500 index constituents that have increased their dividend payouts for 25 consecutive years or more.

The S&P 500 Dividend Aristocrat index was launched by Standard and Poors in May 2005 and has historically outperformed the S&P 500 index with lower volatility over longer investment time frames. Over the past 10 years through the period ending March 31, 2020, the S&P 500 Dividend Aristocrat index has returned 10.98% on an average annual basis whereas the S&P 500 index has returned 10.53% annually during that same period. During this same 10-year period, the standard deviation of the S&P 500 was 13.30% while the Dividend Aristocrats' was 12.47%.

The increased popularity of "Dividend Growth" investing in recent years has elevated the public profile of the S&P 500 Dividend Aristocrat index. The S&P 500 Dividend Aristocrat index has traditionally had a large-cap value-investor audience that favored blue-chip dividend stocks. However, many large-cap growth investors also now view the S&P 500 Dividend Aristocrat index constructively as they seek companies that possess a combination of both capital appreciation and a consistent and increasing dividend payout.

The S&P 500 Dividend Aristocrat index has historically consisted of approximately 50 large-cap companies including both value and growth stocks, spanning across all eleven sectors within the S&P 500 index.

To be eligible for the S&P 500 Dividend Aristocrat index, a stock must have:

• increased its dividend payouts for a minimum of 25 consecutive years,
• currently be part of the S&P 500 index,
• have a minimum market capitalization of $3 billion.

History

Since the 2008 financial crisis, the S&P 500 Dividend Aristocrat list has evolved as follows:

2020 - Amcor (AMCR), Atmos Energy (ATO), Realty Income (O), Essex Property Trust (ESS), Ross Stores (ROST), Albemarle Corporation (ALB), and Expeditors International (EXPD) will be added to the list effective prior to market open on February 3.[1]

United Technologies became Raytheon (RTX) after divestment of some divisions and remained on the list. In addition, both spinoffs Carrier Global (CARR) and Otis Worldwide (OTIS) were added to the list as well, effective prior to the market opening on April 3, 2020.[2]

Ross Stores (ROST) suspended its dividend on May 21st due to the COVID-19 crisis and was removed from the list prior to market open on July 1, 2020.[3]

2019 - Chubb (CB), People's United Financial (PBCT), Caterpillar Inc. (CAT), and United Technologies (UTX) were added to the list.[4][5]

2018- Praxair (PX), A.O. Smith (AOS) and Roper Technologies (ROP) were added to the list. Praxair was subsequently replaced by Linde plc (LIN), which was created by the merger of Linde AG and Praxair.

2017- General Dynamics (GD) and the REIT Federal Realty Investment Trust (FRT) were added to the list and the REIT HCP, Inc. was removed from the index due to spinning off HCR Manor Care and reducing their dividend.

Also in 2017, CR Bard (BCR) was removed from the list due to its purchase by Becton Dickinson (BDX) on December 29, 2017.

2016 - Chubb Corp (CB) was removed upon acquisition by ACE Limited (ACE).[6]

2015 - Family Dollar Stores (FDO) was removed from the list due to its purchase by Dollar Tree. Also in 2015, Sigma-Aldrich Corp (SIAL) was removed from the list due to its acquisition by Merck.[7]

2014 - Bemis (BMS) was removed from the S&P 500 index and therefore dropped from the S&P 500 Dividend Aristocrat list.

2013 - Pitney Bowes (PBI) was removed after slashing the dividend from 37.5c to 18.75c per quarter per share.

2012 - CenturyLink (CTL) was removed from the index after reducing its dividend from 72.5 to 54 cents per share per quarter.

In addition in 2012, nine new companies were added to the index as follows:

1. AT&T (T)
2. Colgate-Palmolive (CL)
3. Franklin Resources (BEN)
4. Genuine Parts (GPC)
5. Health Care Property Investors (HCP)
6. Illinois Tool Works (ITW)
7. Medtronic (MDT)
8. Sysco (SYY)
9. T. Rowe Price (TROW)

2011 - Three companies were added, Ecolab (ECL), Hormel Foods (HRL), and McCormick (MKC).

2010 - A second round of ten companies were dropped: Avery Dennison (AVY), BB&T (BBT), Gannett (GCI), General Electric (GE), Johnson Controls (JCI), Legg Mason (LM), M&T Bank (MTB), Pfizer (PFE), State Street Bank (STT), and US Bancorp (USB).

Also in 2010, Brown Forman (BF.B) was added.

2009 - The list declined from 52 companies in 2008 to 43 companies in 2009, as nine companies were delisted or cut their dividend payouts; some of them due to the 2008 financial crisis. They were: Anheuser Busch (BUD), Bank of America (BAC), Comerica (CMA), Fifth Third Bank (FITB), Keycorp (KEY), Progressive Corp (PGR), Regions Financial (RF), Synovus Financial (SNV), and Wm. Wrigley (WW), which was acquired by Mars.

Also in 2009, there were two additions - Bemis (BMS) and Leggett & Platt (LEG).

Investing

The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) has tracked the S&P 500 Dividend Aristocrats Index since 2013.

By taking a Targeted Outcome approach, Cboe (Chicago Board Options Exchange) launched an index called Cboe S&P 500 Dividend Aristocrats Target Income Index[8] (Ticker: SPAI). This index is designed with the primary goal of generating an annualized level of income that is approximately 3.5% over the annual dividend yield of the S&P 500 Index and a secondary goal of generating price returns that are proportional to the price appreciation of the Index. The SPAI Index investment strategy includes (1) buying the stocks contained in the S&P 500 Dividend Aristocrat Index, and (2) partially "writing" (or selling) weekly "covered" call options on each stock, generally on the last trading day of each week.

Additionally, Cboe launched another index called Cboe S&P 500 Dividend Aristocrats Target Income Index - Monthly Series[9] (Ticker: SPATI). This index differs from the weekly series in that this index is designed with the primary goal of generating an annualized level of income that is approximately 3% over the annual dividend yield of the S&P 500 Index by partially "writing" (or selling) monthly "covered" call options on each stock, generally on the third Friday of each month.

Cboe Vest, a subsidiary of Cboe, is an asset management firm that has released a mutual fund (Ticker: KNGIX) (Sep 11, 2017) that seeks to track the 'SPAI' index, as well as an ETF (Ticker: KNG) (Mar 27, 2018) that seeks to track the 'SPATI' index.

Other popular ETFs that mimic the S&P 500 Dividend Aristocrat index but do not replicate it exactly include the exchange-traded fund (ETF) SPDR S&P Dividend (SDY) which tracks the S&P High Yield Dividend Aristocrats Index. The S&P High Yield Dividend Aristocrat Index is a different index than the S&P 500 Dividend Aristocrat Index. The High Yield version tracks the S&P Composite 1500 index, which contains three times as many stocks than the S&P 500 index. Another difference is that the High Yield version contains stocks that have increased their dividends for at least 20 consecutive years while the more popular and widely held Dividend Aristocrat Index has stocks that have increased their dividends for at least 25 consecutive years.

One other well-known ETF that mimics but does not exactly track the S&P 500 Dividend Aristocrat Index is the iShares Select Dividend (DVY). This ETF tracks the Dow Jones U.S. Select Dividend Index.[10]

S&P 500 Dividend Aristocrat companies (effective July 03, 2020)

Ticker Symbol	Company	GICS Economic Sector	GICS Sub-Industry	SEC Filings
MMM	3M Company	Industrials	Industrial Conglomerates	reports
AOS	A.O. Smith	Industrials	Building Products	reports
ABT	Abbott Laboratories	Health Care	Health Care Equipment & Supplies	reports
ABBV	AbbVie Inc.	Health Care	Biotechnology	reports
AFL	Aflac	Financials	Insurance	reports
APD	Air Products & Chemicals Inc	Materials	Chemicals	reports
ALB	Albemarle Corporation	Materials	Chemicals	reports
AMCR	Amcor plc	Materials	Containers and Packaging	reports
ADM	Archer Daniels Midland	Consumer Staples	Food Products	reports
T	AT&T	Communication Services	Diversified Telecommunication Services	reports
ATO	Atmos Energy	Utilities	Gas Utilities	reports
ADP	Automatic Data Processing	Information Technology	IT Services	reports
BDX	Becton Dickinson	Health Care	Health Care Equipment & Supplies	reports
BF-B	Brown-Forman (Class B shares)	Consumer Staples	Beverages	reports
CAH	Cardinal Health Inc.	Health Care	Health Care Providers & Services	reports
CARR	Carrier Global	Industrials
CAT	Caterpillar Inc.	Industrials	Machinery	reports
CVX	Chevron Corp.	Energy	Oil, Gas & Consumable Fuels	reports
CB	Chubb Limited	Financials	Insurance	reports
CINF	Cincinnati Financial Corp	Financials	Insurance	reports
CTAS	Cintas Corp	Industrials	Commercial Services & Supplies	reports
CLX	The Clorox Company	Consumer Staples	Household Products	reports
KO	Coca-Cola Co	Consumer Staples	Beverages	reports
CL	Colgate-Palmolive	Consumer Staples	Household Products	reports
ED	Consolidated Edison Inc	Utilities	Multi-Utilities	reports
DOV	Dover Corp	Industrials	Machinery	reports
ECL	Ecolab Inc	Materials	Chemicals	reports
EMR	Emerson Electric	Industrials	Electrical Equipment	reports
ESS	Essex Property Trust	Real Estate	Equity REITs	reports
EXPD	Expeditors International of Washington	Industrials	Air Freight & Logistics	reports
XOM	Exxon Mobil Corp	Energy	Oil, Gas & Consumable Fuels	reports
FRT	Federal Realty Investment Trust	Real Estate	Equity REITs	reports
BEN	Franklin Resources	Financials	Capital Markets	reports
GD	General Dynamics	Industrials	Aerospace & Defense	reports
GPC	Genuine Parts Company	Consumer Discretionary	Distributors	reports
HRL	Hormel Foods Corp	Consumer Staples	Food Products	reports
ITW	Illinois Tool Works	Industrials	Machinery	reports
JNJ	Johnson & Johnson	Health Care	Pharmaceuticals	reports
KMB	Kimberly-Clark	Consumer Staples	Household Products	reports
LEG	Leggett & Platt	Consumer Discretionary	Household Durables	reports
LIN	Linde plc	Materials	Chemicals	reports
LOW	Lowe's Companies, Inc.	Consumer Discretionary	Specialty Retail	reports
MKC	McCormick & Company	Consumer Staples	Food Products	reports
MCD	McDonald's	Consumer Discretionary	Hotels, Restaurants & Leisure	reports
MDT	Medtronic	Health Care	Health Care Equipment & Supplies	reports
NUE	Nucor	Materials	Metals & Mining	reports
OTIS	Otis Worldwide	Industrials
PNR	Pentair	Industrials	Machinery	reports
PBCT	People's United Financial	Financials	Banks	reports
PEP	PepsiCo	Consumer Staples	Beverages	reports
PPG	PPG Industries	Materials	Chemicals	reports
PG	Procter & Gamble	Consumer Staples	Household Products	reports
RTX	Raytheon Technologies	Industrials	Aerospace & Defense	reports
O	Realty Income	Real Estate	Equity REITs	reports
ROP	Roper Technologies	Industrials	Industrial Conglomerates	reports
SPGI	S&P Global (formerly McGraw Hill Financial, Inc.)	Financials	Capital Markets	reports
SHW	Sherwin-Williams	Materials	Chemicals	reports
SWK	Stanley Black & Decker Inc.	Industrials	Machinery	reports
SYY	Sysco	Consumer Staples	Food & Staples Retailing	reports
TROW	T. Rowe Price	Financials	Capital Markets	reports
TGT	Target Corporation	Consumer Discretionary	Multiline Retail	reports
VFC	VF Corporation	Consumer Discretionary	Textiles, Apparel & Luxury Goods	reports
WBA	Walgreens Boots Alliance	Consumer Staples	Food & Staples Retailing	reports
WMT	Walmart	Consumer Staples	Food & Staples Retailing	reports
GWW	W. W. Grainger	Industrials	Trading Companies & Distributors	reports

See also [11][12]

S&P 500 Dividend Aristocrat Sector Weightings as of March 31, 2020

1. Consumer Staples - 23%,
2. Industrials - 21%,
3. Materials - 12%,
4. Health Care - 10%,
5. Financials - 10%,
6. Consumer Discretionary - 10%,
7. Real Estate - 4%,
8. Utilities - 3%,
9. Energy - 3%,
10. Technology - 2%,
11. Communications- 2%

References

1. "S&P Dow Jones Indices Announces Rebalancing Results for the S&P 500 Dividend Aristocrats" (PDF).
2. "Constituent Change Announced for the S&P 500 Dividend Aristocrats Index" (PDF).
3. "Constituent Change Announced for the S&P 500 Dividend Aristocrats Index" (PDF).
4. "New Additions To The S&P 500® Dividend Aristocrats® Class Of 2019".
5. "4 Companies Have Joined the 'Dividend Aristocrats' — but Their Stocks Lag the Market".
6. "Constituent Change Announced for the S&P High Yield Dividend Aristocrats Index" (PDF). Spice-indices.com. Retrieved 24 November 2018.
7. "Constituent Change Announced for the S&P 500 Dividend Aristocrats Index" (PDF). Spice-indices.com. Retrieved 24 November 2018.
8. "Cboe S&P 500 Dividend Aristocrats Target Income Index". Cboe.com.
9. "Cboe S&P 500 Dividend Aristocrats Target Income Index - Monthly Series". Cboe.com.
10. "Dividend Aristocrats ETF - Find Out Which S&P 500 Dividend Aristocrat is Best". Smartdividendstocks.com.
11. "Dividend Aristocrats 2014 - MoneyInvestExpert.com". Moneyinvestexpert.com. 20 December 2013.
12. "ProShares S&P 500 Dividend Aristocrats ETF - NOBL - Daily Holdings - ProShares ETFs". Proshares.com.

External links

• Dividend Aristocrats List for 2018 Current list of all Dividend Aristocrats including statistics on each of the stocks that include dividend yield, valuation, debt metrics, and averages. Each stock is a U.S. S&P 500 stock that has increased its dividend for at least 25 consecutive years. This is the complete list of Dividend Aristocrat stocks.
• US Dividend Champions List An excel spreadsheet and PDF file prepared by Justin Law that is updated monthly. The list provides an abundance of stock information for companies that have increased their dividend for consecutive years in a row. The list is broken into three categories separated by the dividend streak length: Dividend Champions (>24 years), Contenders (10 to 24 years) and Challengers (5 to 9 years).
• Canadian Dividend All-Star List The Canadian Dividend All-Star List is a list of Canadian companies that have increased their dividend for five or more calendar years in a row. The excel spreadsheet which can be downloaded for free provides a variety of stock and dividend information. Beyond regular stock information like the price, dividend yield, or P/E the list provides more than 10 years worth of dividend payments for each company and the lowest price each year for the past decade.
• Dividend Aristocrats List for 2020