Published on 21 Mar 2023 on Insider Monkey via Yahoo Finance
In this article, we discuss 14 best dividend aristocrats to buy now. You can skip our detailed analysis of dividend investments and the performance of dividend stocks in the past, and go directly to read 5 Best Dividend Aristocrat Stocks To Buy Now.
Dividend aristocrats are companies that have raised their dividends consecutively for 25 years or more. These stocks are popular among investors because they can generate stable and regular income for them, which tends to grow over time. In addition to this, these securities provide protection during market downturns. According to a report by S&P Dow Jones Indices, the S&P High-Yield Dividend Aristocrats outperformed the S&P Composite 1500 by an average of 140 basis points from December 1999 to December 2022. The report also mentioned that during the 15 worst-performing months for the S&P 1500 during the same period, the high-yield index fell by 7.29%, compared with a 9.58% decline in the S&P Composite 1500.
When investing in dividend growers, investors look beyond yield and focus on other factors, including value, cash flow, and other business fundamentals. Companies that have proven records of dividend growth remain committed to their shareholder obligation and signal that they have the ability to raise their dividends in the long term. Washington Crossing Advisors referred to data by Ned Davis Research and revealed that dividend growers delivered a higher return with lower volatility when compared with ordinary dividend payers, non-dividend companies, and dividend cutters. The report mentioned that dividend growers and initiators delivered an annual average return of 11.6% from 1972 to 2014 with a 15.9% annual risk. In comparison, dividend cutters returned 3.4% during this period with an annual risk of 25.1%.