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.

RELATED TERMS
  1. S&P 500 Dividend Aristocrats

    Companies that have had an increase in dividends for 25 consecutive ...
  2. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
  3. Forward Dividend Yield

    An estimation of a year's dividend expressed as a percentage ...
  4. Dividend

    A distribution of a portion of a company's earnings, decided ...
  5. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends ...
  6. Cash Dividend

    Money paid to stockholders, normally out of the corporation's ...
Related Articles
  1. ETFs & Mutual Funds

    The 4 Best Indexes for Dividends

    Learn about some of the biggest dividend indexes in the marketplace and which niche of the dividend universe each of these indexes targets.
  2. ETFs & Mutual Funds

    Now Is The Time To Invest In The Dividend Aristocrats

    Given their incredible track record, the dividend aristocrats represent some of the most stable companies in the world.
  3. Investing

    10 Dividend Aristocrats

    These companies have paid dividends for 25 uninterrupted years. They could be a great addition to your portfolio.
  4. Insights

    The Top 5 Companies Paying Dividends (JNJ, XOM)

    Explore analyses of the top five dividend-paying companies, and learn about their trailing 12-month dividend payouts and dividend payout ratios.
  5. Investing

    6 Rules for Successful Dividend Investing

    Dividend investing is a smart way to build wealth but there are some important rules investors must remember in order to maximize value.
  6. Investing

    The 3 Biggest Misconceptions of Dividend Stocks

    To find the best dividend stocks, focus on total return, not yield.
  7. Investing

    Due Diligence On Dividends

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

    The Top 5 Dividend Paying Oil Stocks for 2016

    Discover the top five dividend-paying oil companies for 2016 and what factors contribute to their ability to continue dividend payments.
  9. Investing

    Stock-Picking Strategies: Income Investing

    Income investing, which aims to pick companies that provide a steady stream of income, is perhaps one of the most straightforward stock-picking strategies. When investors think of steady income ...
  10. Managing Wealth

    The Risks of Chasing High Dividend Stocks

    Dividend stocks offer enticing yields, but a lot can go wrong on the way to collecting that dividend payout.
RELATED FAQS
  1. What is the difference between yield and dividend?

    Learn how to differentiate between dividend yield and dividend return, and see why dividend yield is the more popular rate ... Read Answer >>
  2. Can dividends be paid out monthly?

    Find out if stocks can pay dividends monthly, and learn about the types of companies most likely to do so and how monthly ... Read Answer >>
  3. What is the difference between the dividend yield and the dividend payout ratio?

    Learn the differences between a stock's dividend yield and its dividend payout ratio, and learn why the latter might be a ... Read Answer >>
  4. Do I receive the posted dividend yield every quarter?

    First things first: a company with common stock that pays a dividend will typically distribute the dividend every quarter. ... Read Answer >>
  5. Does the S&P 500 index include dividends?

    Learn about dividend payments and the S&P 500 and how the yield on the index has trended lower over time due to changes in ... Read Answer >>
  6. Are dividends considered an asset?

    Find out why dividends are considered an asset for investors but a liability for the company that issued the stock, and learn ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center