S&P 500 Dividend Aristocrats


DEFINITION of 'S&P 500 Dividend Aristocrats'

Companies in the S&P 500 who have increased their dividends for at least 25 consecutive years. The S&P 500 Dividend Aristocrats index tracks their performance, and is mainly comprised of large, well-known blue-chip companies. Standard & Poors will remove companies from the index if they fail to increase their dividends from the previous year. The index is updated annually in January.

BREAKING DOWN 'S&P 500 Dividend Aristocrats'

In addition to consistently increasing dividends, dividend aristocrats must have a float-adjusted market capitalization of at least $3 billion and an average trading volume of at least $5 million. The list typically contains 40 to 50 companies.

The strength of the dividend aristocrats lies not just in their ability to continually increase dividend payments to shareholders, but in their overall performance. These companies have historically outperformed the S&P 500 by a little more than 1% per year and have been slightly less volatile.

Dividend aristocrats come from a wide variety of industries and sectors. Some companies have been dividend aristocrats for decades, such as Emerson Electric Co., which sells electronic products and engineering services predominantly to industrial clients. Others, such as Bemis Company, Inc., an industrial packaging products manufacturer, are relatively new to the list.

The recession of 2008–2009 caused many companies, such as Bank of America, General Electric and Pfizer, to be removed from the list. A company can be dropped from the list if it does not increase its dividend or if it is removed from the S&P 500.

One criticism of companies on the dividend aristocrats list is that they sometimes use share repurchases to facilitate dividend increases. The complaint is that a true dividend aristocrat should be increasing its overall payout to shareholders from year to year and, particularly if the company is overpaying for its shares, it may not be acting in shareholders’ best interests overall, even if dividends are going up.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. ACCRA Cost Of Living Index - COLI

    A measure of key living costs compiled by the Council for Community ...
  3. Dividend Aristocrat

    A company that has continuously increased the amount of dividends ...
  4. Blue Chip

    A nationally recognized, well-established and financially sound ...
  5. Cardboard Box Index

    An index used by some investors to gauge industrial production ...
  6. Help-Wanted Index - HWI

    The U.S. job market index, published monthly by the Conference ...
Related Articles
  1. Stock Analysis

    Johnson & Johnson Stock: A Dividend Analysis

    Explore a detailed analysis of Johnson & Johnson's dividend policy, and learn about the dividend policies of its competitors, Pfizer, Inc. and Merck & Company, Inc.
  2. Stock Analysis

    General Electric Stock: A Dividend Analysis

    Read a detailed analysis of the dividend policy of General Electric Company, and explore a comparison of the dividend policies of its competitors.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares Core High Dividend

    Discover how the iShares Core High Dividend ETF is managed, which index it tracks, and for whom it is most suitable as part of an overall portfolio allocation.
  4. Mutual Funds & ETFs

    Introduction To Fundamentally Weighted Index Investing

    If you believe the market smiles on those who focus on value, growth or income, this vehicle may be for you.
  5. Investing Basics

    How And Why Do Companies Pay Dividends?

    If a company decides to pay dividends, it will choose one of three approaches: residual, stability or hybrid policies. Which a company chooses can determine how profitable its dividend payments ...
  6. Investing

    Build A Dividend Portfolio That Grows With You

    Balance risk and return to produce adequate income despite inflation.
  7. Investing

    10 Dividend Aristocrats

    These companies have paid dividends for 25 uninterrupted years. They could be a great addition to your portfolio.
  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. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. What are the dividend reinvestment options for a mutual fund?

    There are two primary choices for how investors can choose to handle dividend distributions made by mutual funds that they ... Read Full Answer >>
  3. Do mutual funds pay dividends or interest?

    Depending on the type of investments included in the portfolio, mutual funds may pay dividends, interest, or both. Types ... Read Full Answer >>
  4. Should I sell my shares if a company suspends its dividend?

    Since 2008, when the Federal Reserve slashed interest rates to zero and then kept them there indefinitely, dividend-paying ... Read Full Answer >>
  5. Do hedge funds pay dividends?

    Hedge funds rarely pay dividends to the accredited investors who invest directly in them. Instead, these investors share ... Read Full Answer >>
  6. Which mutual funds pay the highest dividends?

    For many people, the reliability of dividend or interest income is one of the primary benefits of investing. Like individuals ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center