The Top 25 High-Yield 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 super investor 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." But Standard & Poor's has also created another similar index that it calls the High Yield Dividend Aristocrats.

According to Standard & Poor's, "The S&P High Yield Dividend Aristocrats index is designed to measure the performance of the 60 highest dividend yielding S&P Composite 1500 constituents which have followed a managed dividends policy of consistently increasing dividends every year for at least 25 years."

Let's examine the top 25 high-yield dividend aristocrats ranked by yield. For context, I've also included their five-year annualized dividend growth rate.

Company

Yield

5-Year Dividend Growth Rate

CenturyLink (NYS: CTL)

8.3%

63.9%

Pitney Bowes (NYS: PBI)

7.6%

3.1%

Mercury General (NYS: MCY)

6.3%

5.6%

National Retail Properties (NYS: NNN)

6.2%

3.2%

Cincinnati Financial (NAS: CINF)

6.0%

4.6%

HCP (NYS: HCP)

5.5%

(5.7%)

Leggett & Platt (NYS: LEG)

5.4%

10.7%

Vectren (NYS: VVC)

5.3%

2.6%

Universal Corp (NYS: UVV)

5.0%

2.2%

Black Hills Corp (NYS: BKH)

4.9%

2.2%

Consolidated Edison (NYS: ED)

4.4%

0.9%

Atmos Energy (NYS: ATO)

4.2%

1.5%

Kimberly Clark (NYS: KMB)

4.2%

7.7%

RPM International (NYS: RPM)

4.2%

5.8%

WGL Holdings (NYSE: WGL )

4.0%

2.7%

Diebold (NYS: DBD)

4.0%

5.5%

Piedmont Natural Gas (NYS: PNY)

3.9%

4.0%

Northwest Natural Gas (NYS: NWN)

3.9%

4.8%

Sonoco Products (NYS: SON)

3.9%

4.0%

Abbott Laboratories (NYS: ABT)

3.8%

10.0%

UGI Corp (NYS: UGI)

3.6%

8.2%

Johnson & Johnson (NYS: JNJ)

3.5%

9.9%

Westamerica Bancorp. (NAS: WABC)

3.5%

2.7%

Genuine Parts (NYS: GPC)

3.5%

5.8%

Clorox (NYS: CLX)

3.4%

14.4%

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.

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At the time this article was published Jim Royal, Ph.D.,owns shares of Johnson & Johnson.The Motley Fool owns shares of Clorox, Johnson & Johnson, and Abbott.Motley Fool newsletter serviceshave recommended buying shares of Johnson & Johnson, Piedmont Natural Gas, Clorox, Kimberly Clark, Abbott, and UGI, as well as creating a diagonal call position in Johnson & Johnson. 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.

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