When spending my time looking for worthy investments, there are four primary places I look:
I. S&P 500 Dividend AristocratsThese stocks are the best of the best - the blue blood stocks. S&P maintains the list. Here is a description from their site:
S&P 500 Dividend Aristocrats is designed to measure the performance of S&P 500 index constituents that have followed a policy of consistently increasing dividends every year for at least 25 consecutive years. This index is a member of the S&P Dividend Aristocrats index series.Among others, Dividend Aristocrats include these highly recognizable names:
Index constituents exhibit the following characteristics:
- Underlying Indices – S&P 500
- Weighting – Equally weighted; Constituents re-weighted quarterly
- Reconstitution – Reviewed annually in December
Members may be deleted during the December rebalance if calendar-year dividends did not increase from the previous year, or intra-year if the stock is removed from the underlying S&P 500.
- Coca-Cola Co (KO) | Yield: 3.5%
- Exxon Mobil (XOM) | Yield: 3.7%
- Johnson & Johnson (JNJ) | Yield: 2.6%
- McDonald's Corp (MCD) | Yield: 2.9%
- 3M Company (MMM) | Yield: 2.5%
- Procter & Gamble (PG) | Yield: 3.0%
- Wal-Mart Stores (WMT) | Yield: 2.8%
II. US Broad Dividend Achievers™ IndexThis index is maintained by NASDAQ. Here is the description from their website:
The Broad Dividend Achievers™ Index (DAA) is comprised of companies incorporated in the United States or its territories, trade on the NYSE, NASDAQ or AMEX, and have increased their annual regular dividend payments for the last ten or more consecutive years. In addition, Indxis requires that a stock's average daily cash volume exceed $500,000 per day in the November and December prior to the annual reconstitution date on the last trading date in January.
The Index is calculated using a modified market capitalization weighting methodology and has been published by the American Stock Exchange under the ticker symbol DAA since December 5, 2003.Here are several prominent companies that are Dividend Achievers:
- Caterpillar Inc. (CAT) | Yield: 3.5%
- Donaldson Company (DCI) | Yield: 1.3%
- Eaton Vance Corp. (EV) | Yield: 2.5%
- Owens & Minor Inc. (OMI) | Yield: 3.1%
III. International Dividend Achievers™ IndexThis index is maintained by NASDAQ. Here is the description from their website:
The International Dividend Achievers™ Index (DAT) is designed to track the performance of dividend paying American Depositary Receipts and foreign common stocks trading on major US exchanges. To become eligible for inclusion in the International Dividend Achievers Index a stock must be incorporated outside the United States, trade on the NYSE, NASDAQ or AMEX, and have increased its annual regular dividend payments for the last five or more consecutive years.The International Dividend Achievers are filled with world renowned companies including these:
In addition, Indxis requires that a stock's average daily cash volume exceed $500,000 per day in November and December prior to each annual reconstitution in January. The Index is calculated using a dividend yield weighting methodology and is calculated by American Stock Exchange under the symbol DAT since August 1, 2005.
- Shaw Communications, Inc. (SJR) | Yield: 4.4%
- Vodafone Group Plc (VOD) | Yield: 5.9%
- Unilever N.V. (UN) | Yield: 2.9%
- Bank of Montreal (BMO) | Yield: 3.6%
- Thomson Reuters Corp (TRI) | Yield: 3.2%
IV. The U.S. Dividend ChampionsThis list is maintained by Dave Fish of MoneyPaper is regularly updated and located at the The Drip Investing Resource Center. Here is a description from the spreadsheet:
The initial goal was to identify companies that had increased their dividend in at least 25 consecutive years. But that definition was broadened to include additional companies that had paid higher dividends (without necessarily having increased the quarterly rate in every calendar year. Also included (under the Contenders tab) are companies that have increased increased the quarterly rate in every calendar year. Also included (under the Contenders tab) are companies that have increased their dividend for 10-24 straight years and (under the Challengers tab) companies that have increased their dividend for 5-9 straight years.
Some of the names on the U.S. Dividend Champions list may not be as familiar as those above, but it includes some smaller companies not found on the other lists such as:
- American States Water (AWR) | Yield: 2.2%
- Computer Services Inc. (CSVI) | Yield: 2.5%
- Weyco Group Inc. (WEYS) | Yield: 3.0%
Bringing It All TogetherThe above four lists contain a significant number of companies, and unfortunately a great deal of duplication. I took the above lists, combined them into a single list and eliminated multiple entries for the same company. To that end, I have posted an aggregated list as Ideas on my site. It is still a work in process. Keep in mind that not every stock on the list is a great dividend investment, but virtually all great dividend investments are on the list.
Full Disclosure: Long KO, XOM, JNJ, MCD, MMM, PG, WMT in my Dividend Growth Stocks Portfolio. See a list of all my Dividend Growth Portfolio holdings here.
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This article was written by Dividends4Life. If you enjoyed this article, please subscribe to my feed [RSS] or have future articles emailed to you [Email].