Top 20 Dividend Aristocrats by Dividend Yield

The S&P 500 Dividend Aristocrats are 59 large cap, well known S&P 500 companies from 10 sectors that have consistently increased dividends every year for at least 25 consecutive years. Many of the companies have above average dividend yields, price appreciation and dividend growth.

When ranked by dividend yield, Nucor (NUE) tops the Dividend Aristocrats. Not surprisingly, eight of the top 20 are bank stocks.

Investors tend to give up total returns for higher dividend yields. For example, only four stocks, Nucor (NUE), Integrys Energy Group (TEG), Consolidated Edison (ED) and Anheuser-Busch (BUD), have total returns greater than 10 percent. But only Nucor (NUE) has a price appreciation greater than 10 percent. Six stocks have total returns less than 3 percent, which do not keep up with inflation.

The following table ranks the top 20 Dividend Aristocrats by dividend yield. The dividend yield is the average of the yield for the last day of 1997 and 2007. The table also includes includes 10-year annualized total return, price appreciation and dividend growth for each stock. All returns are annualized using the close for the last trading day of 1997 and 2007.

All 10-year annualized returns and dividend yields have been adjusted for inflation so they represent real values.

Stocks With Dividend Yield Greater Than 5 Percent and Total Return Greater than 10 Percent

Stocks with high total returns and price appreciation tend to have relative low dividend yields. But the exceptions to this general rule are:

• Nucor (NUE), steel producer, 23.46% total return and 7.05% dividend yield.
• Integrys Energy Group (TEG), electric utility, 14.20% total return and 6.91% dividend yield.
• Consolidated Edison (ED), electric utility, 11.38% total return and 6.81% (note: ED has -1.55% dividend growth.)

Stocks With Dividend Yield Greater than 3 Percent and Dividend Growth Greater Than 10 Percent

Income and dividend-reinvestment investors want both good dividend yield and steady dividend increases. A high dividend yield means that you are getting a good return on your investment, and high dividend growth means your dividends will keep up or exceed the rate of inflation.

A few stocks with high dividend yield have high dividend growth, but in general there is little correlation between these two dividend measures.

Here are five stocks with high dividend yield and high dividend growth:

• Synovus Financial (SNV), banking services, 5.58% dividend yield and 10.22% dividend growth.
• Bank of America (BAC), banking services, 4.56% dividend yield and 10.49% dividend growth.
• Fifth Third Bancorp (FITB), banking services, 4.06% dividend yield and 13.25% dividend growth.
• Kimberly-Clark (KMB), consumer products, 3.57% dividend yield and 12.37% dividend growth.
• Pfizer (PFE), pharmaceuticals, 3.15% dividend yield and 14.76% dividend growth.

Here are the same five stocks listed by highest dividend growth.

• Pfizer (PFE), pharmaceuticals, 14.76% dividend growth and 3.15% dividend yield.
• Fifth Third Bancorp (FITB), banking services, 13.25% dividend growth and 4.06% dividend yield.
• Kimberly-Clark (KMB), consumer products, 12.37% dividend growth and 3.57% dividend yield.
• Bank of America (BAC), banking services, 10.49% dividend growth and 4.56% dividend yield.
• Synovus Financial (SNV), financial services, 10.22% dividend growth and 5.58% dividend yield.

Related Articles:

Dividend Aristocrats - A Few Truly Great Stocks
Dividend Aristocrats Can Soften the Blow of a Down Market
High Yield Dividend Aristocrats Offer Hefty Total Returns

Posted March 12, 2008.

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