The Dividend Aristocrats

Today I would like to write about a special group of dividend paying stocks called the “Dividend Aristocrats”.

Background
People who invest mostly in stocks which pay a quarterly dividend or share of the companies quarterly earnings are known as “dividend investors”. There is a subset of dividend investors who focus their investments into companies with track record of increasing their dividend rate every year. These investors are known as dividend growth investors.

The Dividend Aristocrats
These dividend growth investors have a favorite group of stocks to invest in called the Dividend Aristocrats. This group is an elite group of dividend paying stocks that have increased their dividend payouts for 25 consecutive years or more.

Diversification
Those investors who are big in diversification will be happy to know that companies that comprise the Dividend Aristocrats span all eleven sectors within the S&P 500 index.

Profitability
The Dividend Aristocrat portfolio long term track record shows that over the past ten years on an average annual basis, the Dividend Aristocrat portfolio has returned approximately 1.6% more annually than the S&P 500 index with less risk.

The Review
I have personally reviewed the charts and performance numbers for some of these stocks. They encompass a wide range of earnings, so they are the largest dividends amongst dividend paying stocks but they pay every quarter and they increase the size of their dividend each year. These are very important characteristics for planning to replace your income for retirement. The groups prices also show low volatility and steady price appreciation amongst the ones I looked at so I was also pleased with that aspect because it makes purchasing them with margin less nerve racking. This allows you to double the size of your investment with less sleepless nights worrying about margin calls.

Conclusion
Dividend investors primarily invest in stocks which pay investors quarterly payments. Dividend growth investors primarily invest in stocks with a good track record of growing their dividend. The “dividend aristocrats” are a group of stocks which have done both of these things for 25 years. This group is characterized by growth, profitability and low volatility. These are good reasons to invest in this group. After reading these articles I will seriously look at this group of stocks to find candidates to add to my portfolio. I think buying an index fund which contains all of them is a good substitute and allows investors with less capitol access to the financial profits of this group.

A partial list of the Dividend Aristocrats and source for the entire list.

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