What does Dividend Aristocrat mean?
A stock that pays dividends has increased dividends consistently for the last 25 years is called a dividend aristocrat stock. The dividend aristocrats are well-established companies and have been paying out dividends for a long time already. This signals to investors that these companies are reliable for long-term investment. Dividend Aristocrats are also suitable for investors seeking a reliable source of income (through dividend payouts). Investors can pick and choose individual Dividend Aristocrats or simply invest in a Dividend Aristocrats ETF.
What is the Criteria to be a Dividend Aristocrat Stock?
Here are the criteria for being a dividend aristocrat:
- The stock must be in the S&P 500 Index
- The stock must pay dividends
- Must have increased dividends every year for the last 25 years
- Should have a market cap of $3 Billion or more
- Must have an average daily trading value of at least $5 million
Is the List of Dividend Aristocrats Updated?
The stocks are evaluated regularly, and some stocks may lose their status while new ones might get added to the list based on fulfilling the criteria mentioned above.
If a stock misses out on increasing the dividend one year, it gets dropped from the list of Dividend Aristocrats and isn’t included again until it completes another 25 years of the annual increase in dividend payouts.
As part of the list updating process, in early 2021, three new stocks were added to the list – International Business Machines (IBM), NextEra Energy (NEE), and West Pharmaceutical Services (WST). Simultaneously, three stocks were removed from the list as well – Carrier Global (CARR), Otis Worldwide (OTIS), and Raytheon Technologies (RTX) leaving the total count unaltered.
Recent Changes To The Dividend Aristocrats List for 2022.
Removals from the Dividend Aristocrats list for 2022:
- Dec 2021: Leggett & Platt Stock has been moved out of the S&P 500 Index, hence it is no longer a Dividend Aristocrat. Even though it has been increasing dividends, it doesn’t fulfil the full criteria to be part of the Dividend Aristocrats List.
- Feb 2022: AT&T Stock has been removed from the Dividend Aristocrats list because it failed to increase its base dividend for a couple of years in a row.
Additions to the Dividend Aristocrats List for 2022:
- Nov 2021: Orion Office REIT, spun out of Realty Income, and retained its position in the Dividend Aristocrat List.
- Feb 2022: Brown & Brown joined the Dividend Aristocrats list
- Feb 2022: Church & Dwight joined the Dividend Aristocrats list
How many Dividend Aristocrat stocks are there?
There are 65 Dividend Aristocrat stocks as of March 2022. The stocks are from various industries such as industrials, consumer staples, healthcare, financials, and information technology. A few of the highest dividend yield aristocrats are AT&T (T) <removed from the list in Feb 2022>, Exxon Mobil (XOM), Chevron (CVX), IBM (IBM), and AbbVie (ABBV).
Are all Dividend Aristocrats part of the S&P 500 Index?
Yes, by definition, all Dividend Aristocrats must be part of the S&P 500 Index.
Are FAANG Stocks or Other Tech Stocks Dividend Aristocrats?
No, currently none of the FAANG stocks are dividend aristocrats. In fact, only one of the FAANG stocks (Apple – AAPL) pays dividends at all. Among the MFAANG, Microsoft also pays dividends but it is also not a dividend aristocrat.
In the list, there are only two stocks from the Information Technology sector that are dividend aristocrats. Those two stocks are International Business Machine (IBM) and Automatic Data Processing (ADP).
Which Stocks or Companies are Dividend Aristocrats?
Here’s the List of All Dividend Aristocrats with their Dividend Yields
It is important to note that to predict the sustainability of the dividend payouts in the future, consider taking a look at the stocks’ Dividend Payout Ratios. Generally, lower dividend payout ratios mean the company is stable and still has room to grow the dividends in the future.
|Stock||Ticker Symbol||Dividend Yield||Years of Dividend Growth|
|Johnson & Johnson||JNJ||2.63%||59|
|Procter & Gamble||PG||2.41%||64|
|Stanley Black & Decker||SWK||1.74%||53|
|Becton, Dickinson & Co.||BDX||1.38%||49|
|Illinois Tool Works||ITW||2.18%||50|
|Federal Realty Investment Trust||FRT||3.45%||53|
|Archer Daniels Midland||ADM||2.31%||47|
|Automatic Data Processing||ADP||1.75%||46|
|Walgreens Boots Alliance||WBA||3.90%||45|
|Air Products & Chemicals||APD||2.05%||39|
|McCormick & Co.||MKC||1.71%||35|
|T. Rowe Price Group||TROW||2.16%||34|
|Atmos Energy Corporation||ATO||2.69%||37|
|West Pharmaceutical Services, Inc.||WST||0.17%||28|
|People’s United Financial||PBCT||4.12%||27|
|Essex Property Trust, Inc.||ESS||2.51%||27|
|Expeditors International of Washington, Inc.||EXPD||1.00%||27|
|Orion Office REIT (spun out of Realty Income Corporation)||ONL||4.07%||26|
|International Business Machines||IBM||4.54%||26|
|NextEra Energy Inc||NEE||1.89%||26|
|Church & Dwight||CHD||1.06%||25|
|Brown & Brown||BRO||0.60%||25|
Dividend Aristocrat Stocks Interactive Table
|Stock||Exchange||Ticker Symbol||Dividend Yield||Sector||Years of Dividend Growth|
|Genuine Parts||NYSE||GPC||2.56%||Consumer discretionary||65|
|Johnson & Johnson||NYSE||JNJ||2.63%||Healthcare||59|
|Procter & Gamble||NYSE||PG||2.41%||Consumer staples||64|
|Stanley Black & Decker||NYSE||SWK||1.74%||Industrials||53|
|Hormel Foods||NYSE||HRL||2.30%||Consumer staples||55|
|Becton, Dickinson & Co.||NYSE||BDX||1.38%||Healthcare||49|
|Illinois Tool Works||NYSE||ITW||2.18%||Industrials||50|
|Federal Realty Investment Trust||NYSE||FRT||3.45%||Real estate||53|
|Kimberly Clark||NYSE||KMB||3.42%||Consumer staples||49|
|VF Corp.||NYSE||VFC||2.66%||Consumer discretionary||47|
|Archer Daniels Midland||NYSE||ADM||2.31%||Consumer staples||47|
|Automatic Data Processing||NASDAQ||ADP||1.75%||Information technology||46|
|Walgreens Boots Alliance||NASDAQ||WBA||3.90%||Consumer staples||45|
|Air Products & Chemicals||NYSE||APD||2.05%||Materials||39|
|McCormick & Co.||NYSE||MKC||1.71%||Consumer staples||35|
|T. Rowe Price Group||NASDAQ||TROW||2.16%||Financials||34|
|Atmos Energy Corporation||NYSE||ATO||2.69%||Utilities||37|
|West Pharmaceutical Services, Inc.||NYSE||WST||0.17%||Healthcare||28|
|People's United Financial||NASDAQ||PBCT||4.12%||Financials||27|
|Essex Property Trust, Inc.||NYSE||ESS||2.51%||Real estate||27|
|Expeditors International of Washington, Inc.||NASDAQ||EXPD||1.00%||Industrials||27|
|Orion Office REIT (spun out of Realty Income Corporation)||NYSE||ONL||4.07%||Real estate||26|
|International Business Machines||NYSE||IBM||4.54%||Information Technology||26|
|NextEra Energy Inc||NYSE||NEE||1.89%||Utilities||26|
|Brown & Brown||NYSE||BRO||1.06%||Financials||25|
|Church & Dwight||NYSE||CHD||0.60%||Consumer Staples||25|
Table last updated: March 2022
What are Dividend Kings?
Dividend Kings, like Dividend Aristocrats, are also an elite group of stocks. To be a Dividend King, the stock must have paid and increased their dividends every year for the last 50 years. Stocks such as Dover (DOV), 3M (MMM), Emerson Electric (EMR), Genuine Parts (GPC), Proctor & Gamble (PG), and Coca Cola (KO) are some of the Dividend Kings.
Should I Invest in Dividend Aristocrat Stocks?
Investors looking to benefit from the stability of the Dividend Aristocrats can consider investing in them for a steady source for income for the long term. It is important to note that the dividend aristocrats do not necessarily provide the highest dividend yield, but they are attractive for their consistency.
Additionally, dividend aristocrats may not be the best option for investors seeking rapid growth via capital gains. For example, the stocks such as Tesla, Amazon have brought in tremendous gains for their investors via capital gains (increase in stock price) but they are not dividend aristocrats.
Due to the different treatment of dividend income as compared to capital gains, investors must also consider the tax implications before investing in dividend aristocrat stocks. Investing in these stocks in a tax-advantaged account such as a 401(k), IRA, or Roth IRA might be more suitable for certain investors.
Dividend Aristocrats ETF: Is there an ETF for Investing in Dividend Aristocrats?
Two popular ETFs for investing in the Dividend Aristocrat Stocks are the following:
- NOBL – ProShares S&P 500 Dividend Aristocrats ETF
- SDY – SPDR S&P Dividend ETF
What are Technology Dividend Aristocrats?
Technology Dividend Aristocrats are a group of well established technology and technology-related companies that have paid and raised their dividends every year for the last seven years or more.
Technology Dividend Aristocrats are high quality stocks that have stable earnings and robust fundamentals.
What Stocks or Companies are Technology Dividend Aristocrats?
There are 36 companies on the list of Technology Dividend Aristocrats. Here’s the complete list of stocks.
|Stock||Exchange||Ticker Symbol||Dividend Yield|
|Activision Blizzard, Inc||NASDAQ||ATVI||0.58%|
|Analog Devices, Inc.||NASDAQ||ADI||1.53%|
|Automatic Data Processing, Inc.||NASDAQ||ADP||1.70%|
|Badger Meter, Inc.||NYSE||BMI||0.77%|
|Broadridge Financial Solutions,||NYSE||BR||1.39%|
|Cass Information Systems, Inc||NASDAQ||CASS||2.66%|
|Cisco Systems, Inc.||NASDAQ||CSCO||2.65%|
|CSG Systems International, Inc.||NASDAQ||CSGS||2.03%|
|Hewlett Packard Enterprise Comp||NYSE||HPE||3.23%|
|International Business Machines||NYSE||IBM||5.24%|
|Jack Henry & Associates, Inc.||NASDAQ||JKHY||1.12%|
|Microchip Technology Incorporated||NASDAQ||MCHP||1.21%|
|Motorola Solutions, Inc.||NYSE||MSI||1.16%|
|National Instruments Corporation||NASDAQ||NATI||2.68%|
|PetMed Express, Inc.||NASDAQ||PETS||4.55%|
|Power Integrations, Inc.||NASDAQ||POWI||0.52%|
|TE Connectivity Ltd. New Switz.||NYSE||TEL||1.36%|
|Texas Instruments Incorporated||NASDAQ||TXN||2.34%|
Technology Dividend Aristocrat Stocks Interactive Table
|Stock||Ticker Symbol||Exchange||Dividend Yield|
|Activision Blizzard, Inc||ATVI||NASDAQ||0.58%|
|Analog Devices, Inc.||ADI||NASDAQ||1.53%|
|Automatic Data Processing, Inc.||ADP||NASDAQ||1.70%|
|Badger Meter, Inc.||BMI||NYSE||0.77%|
|Broadridge Financial Solutions,||BR||NYSE||1.39%|
|Cass Information Systems, Inc||CASS||NASDAQ||2.66%|
|Cisco Systems, Inc.||CSCO||NASDAQ||2.65%|
|CSG Systems International, Inc.||CSGS||NASDAQ||2.03%|
|Hewlett Packard Enterprise Comp||HPE||NYSE||3.23%|
|International Business Machines||IBM||NYSE||5.24%|
|Jack Henry & Associates, Inc.||JKHY||NASDAQ||1.12%|
|Microchip Technology Incorporat||MCHP||NASDAQ||1.21%|
|Motorola Solutions, Inc.||MSI||NYSE||1.16%|
|National Instruments Corporatio||NATI||NASDAQ||2.68%|
|PetMed Express, Inc.||PETS||NASDAQ||4.55%|
|Power Integrations, Inc.||POWI||NASDAQ||0.52%|
|TE Connectivity Ltd. New Switze||TEL||NYSE||1.36%|
|Texas Instruments Incorporated||TXN||NASDAQ||2.34%|
How to invest in Technology Dividend Aristocrats
The ETF from ProShares S&P TECHNOLOGY DIVIDEND ARISTOCRATS ETF (TDV) aims to track the performance of the Technology Dividend Aristocrats Index.
Any company in the Technology Dividends Aristocrats Index must have increased dividend payments each year for at least seven years, its shares must be listed on a U.S. national securities exchange, and must meet certain minimum liquidity requirements.
Currently, the index contains 36 stocks, such as Intuit (INTU), Motorola Solutions (MSI), Paychex (PAYX), Analog Devices (ADI), NetApp (NTAP), Qualcomm (QCOM), etc.
A dividend is a form of income that investors receive. Depending on your tax-filing status, there may be tax consequences on your dividend income. The taxes on dividend income also vary depending on whether your dividends are classified as ‘qualified dividends‘ or ‘ordinary dividends‘.
Ordinary Dividends are also called ‘non-qualified dividends’.
What Dividends are Qualified?
The IRS treats qualified dividends favorably and taxes them at a lower rate. A dividend is considered ‘qualified’ where certain conditions are met.
- Generally, to be considered a ‘qualified dividend‘, the dividend must be paid by a US company. In some cases, certain foreign companies’ dividends may also be considered.
- The dividend must be paid out by a for-profit organization. Dividends from tax-exempt organization are not considered.
- The investor must hold the underlying stock (or any security that pays dividends) for more than 60 days in the qualifying period. The qualifying period is determined by the ex-dividend date. If the ex-dividend date is D, the qualifying period is (D – 60) days to (D + 60) days.
This is information of general nature. For details and exceptions, please refer IRS Publication 550.
Qualified Dividend vs Ordinary Dividend
Any dividend that does not satisfy all the criteria for being considered ‘qualified dividend‘ may be treated as ‘ordinary dividend‘. While qualified dividends are given preferential treatment and investors (almost always) pay lower taxes on them, the ordinary dividends are usually taxed at the same tax rate as the investor’s personal income tax rate.
Thankfully, your brokerage accounts should clearly specify whether the dividends you receive are ‘qualified’ or ‘ordinary’ in the tax forms, taking the burden away from you of classifying the dividends.
Qualified Dividend Taxes
Qualified Dividends are taxed at three different rates. Depending on taxable income and tax filing status, the tax rate for qualified dividends can be 0%, 15%, or 20%. It’s important to note that while the personal income tax rates in the US can be as high as 37%, the maximum tax rate on qualified dividends is 20%.
Here’s how the tax rates are determined for qualified dividends.
- 0% on any amount that otherwise would be taxed at a 10% or 15% rate (personal income tax rate),
- 15% on any amount that otherwise would be taxed at rates between 15% and 37% (personal income tax rate), and
- 20% on any amount that otherwise would be taxed at a 37% rate (personal income tax rate)
Understandably, people in higher tax brackets, i.e. higher annual income pay a higher dividend tax rate on qualified dividends as well.
This is information of general nature. For details and exceptions, please refer IRS Publication 550.
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