2021 Dividend Aristocrats List: All 65 Stocks | Stock market news
Income investors often look to bonds for yield, but with interest rates so low for so long, the stock market can sometimes be a better option, with many actions offering better earnings than a 10-year Treasury, which pays less than 2%.
But dividend yields themselves don’t mean much if they’re not sustainable. This is why being a member of the Dividend Aristocrats is such a distinction: There are 65 companies (also members of the S&P 500), which have not only paid dividends for at least 25 consecutive years – they have increased their dividends for a minimum of 25 consecutive years also.
The only two requirements that a stock must be a member of the venerable S&P 500 and have a 25-year record of dividend increases on their own are stringent enough criteria to ensure that investors check out a list of solid companies and reliable.
But the requirements go even further, with the following attributes also mandatory to be a member of the Dividend Aristocrats List:
- Companies must be worth at least $ 3 billion at the time of each quarterly rebalance.
- Average daily trading volume of at least $ 5 million for each rolling three-month period on each quarterly rebalance date.
The index rebalancing takes place every January, April, July and October. New entrants are added and old ones deleted once a year.
It’s important to keep the objective of the index in mind when reviewing it: it is designed to be a well-diversified, low-volatility group of stocks offering both dividend income and the potential for capital appreciation.
S&P Dow Jones Indices, the index’s creator, notes that nearly a third of total equity market returns since 1926 have come from dividends, and that its selection criteria and diversification requirements place aristocratic stocks at dividends in a unique position to do well as a group.
On the question of diversification, the index has a minimum floor for membership in 40 different companies – a level that is unlikely to be exceeded anytime soon given that the current group consists of 65 stocks.
The index also caps the weighting of a single sector at 30%, thus limiting the impact of the impact of a single sector on the entire portfolio.
To this end, while investors could certainly try to adopt their own “smart beta“to eliminate the less attractive members of the group, it is a much more modest effort to simply buy the whole group as a whole, which is possible thanks to the existence of an exchange-traded fund for the dividend aristocrats that follows the portfolio.
The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) is the leading exchange-traded fund in the space, with over $ 8 billion in assets under management and a reasonable expense ratio of 0.35%.
Here’s a full list of the 65 S&P 500 dividend aristocrats, and how long each has been increasing shareholder payouts. The list is current until May 2021.
(Read more after the table for more information on recent additions and subtractions.)
Recent additions and subtractions
While the total number of Dividend Aristocrats remained stagnant at 65 between 2020 and 2021, there are actually three new members of the Index in the past year or so, and three stocks that have been phased out.
Here are the three new dividend aristocrats:
International Business Machines. The old-fashioned tech giant recorded its 25th consecutive year of dividend increases last year, making Big Blue a proud new member of the elite club.
While things have slowly improved for IBM shareholders over the past year, some critics criticize IBM for focusing more on dividends than on bold, long-term investments in innovation. IBM has been a hugely disappointing player over the past decade and more, with stocks not having gained ground since 2010.
NextEra Energy. Electric utility NextEra Energy is also a new member of the list from 2021, having recorded 25 consecutive years of dividend growth. Unlike IBM, this has been accompanied by an impressive long-term stock market performance, and the company has some of the most impressive clean energy operations among large American companies, known for its growing interest in wind and wind power. solar.
Western Pharmaceutical Services. While this medical supply company has recorded 28 straight years of dividend growth, WST is new to the S&P dividend aristocrats simply because it only joined the S&P 500 in 2020.
It tends to happen when you’re growing as fast as West Pharmaceutical Services. As recently as 2012, stocks were trading below $ 20; the stock recently hit all-time highs around $ 335.
And, because everything has an end, here are the three stocks that come out of the index:
Global carrier (CARR). It is no coincidence that these three companies in particular have just lost their status as dividend aristocrats: They are all the result of a 2020 merger between United Technologies and Raytheon which created the new aerospace and defense giant Raytheon Technologies.
Heating, air conditioning and refrigeration company Carrier Global was split from United Technologies for the merger and began marketing as a stand-alone stock in 2020.
Otis in the world (OTIS). Elevator and escalator giant Otis was in a similar situation last year, transforming into its own corporate entity to help make the Raytheon-United Technologies merger more accessible to regulators.
Although the new company still pays a dividend, it is not a dividend aristocrat.
Raytheon Technologies (RTX). Newly formed defense and aerospace giant Raytheon Technologies will reap other benefits of its business combination in the form of increased market share and make the segment more competitive against Boeing (BA) in the field of commercial aerospace. Alas, RTX still pays a dividend and can still be a good investment, but it is no longer a dividend aristocrat.