Dividend Aristocrat


DEFINITION of 'Dividend Aristocrat'

A company that has continuously increased the amount of dividends it pays to its shareholders. To be considered a dividend aristocrat, a company must typically have raised dividends for at least 25 years. More specifically, the company needs to have a managed dividend policy that increased its dividend every year for those 25 years.

Companies that are able to maintain high dividend yields are often considered to be more stable than others, and because stocks maintaining this association must keep yields consistently high, the list of aristocrats is often under 100 companies.

BREAKING DOWN 'Dividend Aristocrat'

Dividend aristocrats are rare because most companies are unable to continually boost dividend payouts while also facing recessions and market shocks. Two of the more popular ways of tracking this type of company are through the S&P Dividend Aristocrats and the S&P High-Yield Dividend Aristocrats indexes, which track the performance of companies that have increased dividends for at least 25 years. The index is weighted according to each stock's yield.

  1. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends ...
  2. Dividend Payout Ratio

    The percentage of earnings paid to shareholders in dividends. ...
  3. Dividend

    A distribution of a portion of a company's earnings, decided ...
  4. Retention Ratio

    The proportion of earnings kept back in the business as retained ...
  5. Dividend Arbitrage

    An options trading strategy that involves purchasing put options ...
  6. Dividend Discount Model - DDM

    A procedure for valuing the price of a stock by using predicted ...
Related Articles
  1. Stock Analysis

    Coca-Cola Stock: A Dividend Analysis

    Discover analysis of The Coca-Cola Company's dividend policy, and learn about the dividend policies of its competitors, PepsiCo and Dr Pepper Snapple.
  2. Investing Basics

    The Power Of Dividend Growth

    Dividends may not seem exciting, but they can certainly be lucrative. Learn more here!
  3. Investing

    Dividend Yield For The Downturn

    High-dividend stocks make excellent bear market investments, but the payouts aren't a sure thing.
  4. Markets

    Due Diligence On Dividends

    Understanding dividends and how they work will help you become a more informed and successful investor.
  5. Markets

    The 4 Basic Elements Of Stock Value

    Investors use these four measures to determine a stock's worth. Find out how to use them.
  6. Investing Basics

    Dividend Facts You May Not Know

    Discover the issues that complicate these payouts for investors.
  7. Active Trading

    Finding The Best Yields

    Using yields to supplement earnings can mean big bucks, with the right strategy.
  8. Fundamental Analysis

    Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  9. Markets

    Your Dividend Payout: Can You Count On It?

    We go over several telling factors that can help you answer this question and avoid losses.
  10. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  1. Do mutual funds pay interest?

    Some mutual funds pay interest, though it depends on the types of assets held in the funds' portfolios. Specifically, bond ... Read Full Answer >>
  2. Do dividends affect working capital?

    Regardless of whether cash dividends are paid or accrued, a company's working capital is reduced. When cash dividends are ... Read Full Answer >>
  3. Do mutual funds pay dividends?

    Depending on the specific assets in its portfolio, a mutual fund may generate income for shareholders in the form of capital ... Read Full Answer >>
  4. How often do mutual funds pay capital gains?

    The frequency with which mutual funds pay capital gains varies. However, funds that generate a profit within a given year ... Read Full Answer >>
  5. Can dividends be paid out monthly?

    Though it is more common for dividends to be paid quarterly or annually, some stocks do pay monthly dividends. Dividends: ... Read Full Answer >>
  6. Are dividends considered an asset?

    Whether dividends paid on stock are considered an asset depends on which role you play in the investment: the issuing company ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!