The Fastest-Growing Dividend Aristocrats
Dividend-paying companies are an oasis in the desert of underperforming stocks. They offer solid payouts today and the promise of capital gains tomorrow. According to a study by Ibbotson, reinvested dividends made up about 40% of total stock returns from 1926 to 2006. In fact, dividend investing is so appealing that superinvestor Warren Buffett has made it a significant component of his portfolio.
When searching for great dividend stocks, it makes a lot of sense to start with companies that have been playing the dividend game the longest. Standard & Poor's has culled the dividend winners from the also-rans in a list it calls the "dividend aristocrats."
Let's examine the top 25 fastest-growing yields among these dividend aristocrats. For context, I've also included their trailing yield.
Company | 5-Year Average Annual Dividend Growth Rate | Yield |
|---|---|---|
CenturyLink (NYS: CTL) | 63.9% | 8.4% |
Lowe's (NYS: LOW) | 29.7% | 2.9% |
McDonald's (NYS: MCD) | 28.9% | 2.8% |
Walgreen (NYS: WAG) | 21.9% | 2.6% |
Target (NYS: TGT) | 20.1% | 2.5% |
AFLAC (NYS: AFL) | 19.7% | 3.2% |
W.W. Grainger (NYS: GWW) | 17.7% | 1.9% |
Wal-Mart (NYS: WMT) | 15.6% | 2.9% |
Automatic Data Processing (NAS: ADP) | 14.9% | 3% |
Clorox (NYS: CLX) | 14.4% | 3.5% |
Becton, Dickinson (NYS: BDX) | 14.2% | 2% |
PepsiCo (NYS: PEP) | 12.6% | 3.3% |
VF Corp (NYS: VFC) | 12.2% | 2.3% |
Ecolab (NYS: ECL) | 11.9% | 1.5% |
Hormel Foods (NYS: HRL) | 11.5% | 1.8% |
Procter & Gamble (NYS: PG) | 11.4% | 3.4% |
Sigma-Aldrich (NAS: SIAL) | 11.2% | 1.1% |
Archer-Daniels-Midland (NYS: ADM) | 10.9% | 2.3% |
Family Dollar Stores (NYS: FDO) | 10.9% | 1.5% |
Leggett & Platt (NYS: LEG) | 10.7% | 5.6% |
Chubb (NYS: CB) | 10.3% | 2.6% |
Air Products & Chemicals (NYS: APD) | 10.1% | 2.8% |
Dover (NYS: DOV) | 10.1% | 2.3% |
Abbott Laboratories (NYS: ABT) | 10% | 3.9% |
Johnson & Johnson (NYS: JNJ) | 9.9% | 3.6% |
Source: Capital IQ, a division of Standard & Poor's.
These aren't formal recommendations -- just ideas for your own further research. Still, they could give you a great start toward find companies capable of paying rising dividends for a quarter-century or more. You can find the list of highest yields here.
Get the best dividend stocks you can find. Read the Fool's special report, "13 High-Yielding Stocks to Buy Today." It's free.
At the time thisarticle was published Jim Royal, Ph.D.,owns shares of P&G, J&J, and McDonald's.The Motley Fool owns shares of Clorox, PepsiCo, Abbott, AFLAC, Johnson & Johnson, and Wal-Mart.Motley Fool newsletter serviceshave recommended buying shares of Becton, Clorox, Abbott, Procter & Gamble, McDonald's, ADP, Lowe's, AFLAC, J&J, Wal-Mart, and PepsiCo; creating diagonal call positions in Wal-Mart, J&J, and PepsiCo; and writing covered calls on Lowe's. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
