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Wed. Dec. 16, 2009

The 2010 Dividend Aristocrats *

The S&P 500 Dividend Aristocrats is the most prestigious list of dividend stocks. The Dividend Aristocrats index is designed to measure the performance of S&P 500 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.

Dividend Aristocrats constituents exhibit the following characteristics:

  • Underlying Indices – S&P 500
  • Weighting – Equally weighted; Constituents re-weighted quarterly
  • Reconstitution – Reviewed annually in December

Among others, Dividend Aristocrats include these highly recognizable names, with years of consecutive dividend increases shown:

  • Clorox Co (CLX) – 32 years
  • Coca-Cola Co (KO) – 47 years – [Analysis]
  • Exxon (XOM) – 27 years
  • Johnson & Johnson (JNJ) – 47 years – [Analysis]
  • McDonald’s Corp (MCD) – 33 years – [Analysis]
  • Procter & Gamble (PG) – 53 years – [Analysis]
  • Wal-Mart Stores (WMT) -35 years – [Analysis]

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.

On December 4th, S&P announced changes to the Dividend Aristocrats Index. Standard & Poor’s will perform the annual reconstitution of the S&P 500 Dividend Aristocrats Index after the close of trading on Friday, December 18, 2009.

The following stocks will be added to the Dividend Aristocrats:

  • Brown-Forman Corporation (BF.B)
  • Cintas Corp. (CTAS)

The following stocks will be dropped from the Dividend Aristocrats:

  • Avery Dennison Corporation (AVY)
  • BB&T Corp. (BBT)
  • Gannett Co., Inc. (GCI)
  • General Electric Co. (GE)
  • Johnson Controls Inc. (JCI)
  • Legg Mason Inc. (LM)
  • M&T Bank Corp. (MTB)
  • Pfizer Inc. (PFE)
  • State Street Corp. (STT)
  • US Bancorp (USB)

As the number of drops vs. adds indicates, the last two years were difficult for dividend stocks, but that is not necessarily a bad thing.  During good times it is easy for companies to increase dividends, and many companies were added to the index. It is during times of adversity that we learn who the real aristocrats are.

Full Disclosure: Long CLX, KO, JNJ, MCD, PG, WMT. See a list of all my income holdings here.

(Photo Credit)


6 Responses to “The 2010 Dividend Aristocrats *”

  1. John says:

    Why isn’t there a etf that represents the DAristocrats? I hold vanguard acheivers(vig) and others…..is there a etf that I am missing………..thanks for all you do

    John

  2. John: I am not aware of an ETF that tracks just Aristrocrats. However, you may want to take a look at SDY. It tracks the “High Yield Dividend Aristocrats.”

    Best Wishes,
    D4L

  3. John says:

    Greetings D4L

    Just subscribed but the return to merchant didn’t work for me so I will wait for your response Cheers for us in the New Year!

  4. John: I have emailed you your login credentials. Let me know if you have any problems getting in.

    Best Wishes,
    D4L

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