Dividend Aristocrats
A Dividend Aristocrat is a company that has not only paid but increased their dividend every year consecutively for a minimum of 25 years. That means that if they paid a dividend 30 years ago and that dividend was one penny, and then the next year it was two pennies, then today it’s 30 cents per share, that would be an example of a Dividend Aristocrat. This is the sign of an extremely healthy company and one of the things we look for when building a portfolio for the Dividend Lifestyle.
Exxon is a beautiful example of an aristocrat, as are Verizon and Coca-Cola. There are a number of them. I believe 40 or 50 current Dividend Aristocrats with a 25-year plus track record of yearly increases of their payout to shareholders. If you think about it for a moment, it’s remarkable that a business has increased its dividend payments consistently for that long and never missed.
In 2009, when it looked like the world was ending and we had a global financial meltdown, Verizon increased its dividend that year. In 2001, Exxon increased its dividend after 9-11 when we didn't know if WWIII was kicking off. In 2020, the COVID shutdown was unprecedented, and the economy came to a screeching halt. The world literally did shutdown. We’ve never closed down the economy before, yet Coca-Cola increased its dividend during Covid, as did the other Aristocrats. The Aristocrats are the best of the best and exactly where you should be looking when constructing a portfolio of stocks to support the Dividend Lifestyle.
Disclosures: Please note that there were other years that these stocks were down; however, this is just an example of what to look for when you're assessing potential stocks or investments to purchase
Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Examples are for illustration purpose only and do not represent an actual investment. Dividends are not guaranteed and must be authorized by the company's board of directors. Investments mentioned may not be suitable for all investors. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.