Top Dividend Aristocrats from the S&P 500 – Part 2

Top Dividend Aristocrats

Yesterday I presented to you some of the top dividend aristocrats from the S&P 500 Index. Today I will show you 3 more candidates that have raised their dividends for at least 20 years now. If you are wondering whether it’s worthwhile at all to go in search of promising dividend candidates, please read on carefully!

Long-term studies (1972 – 2010) have clearly shown that companies that continuously increase their payouts also perform significantly better in terms of share price. On average, they returned 9.6% per year over the entire period – and thus 2.3% more than the market as a whole. The following example calculation clearly shows what this means in absolute terms:

Investing $10,000 at an annual rate of 7.3% means assets of $157,490 after 40 years. But with 9.6% annual growth, the $10,000 would have become $381,221 in the same time – more than twice as much! The “compound interest effect” is really impressive and explains vividly why a large portion of investor income is generated by dividend payments.

In my analysis today, I therefore present 3 more so-called top dividend aristocrats from the USA:

Chevron (CVX)

Chevron is a globally operating energy company. It’s one of the world’s largest oil companies and is, according to its own information, the largest producer of geothermal energy. The company is active in more than 180 countries; its business activities range from oil and gas production to chemical manufacturing and sales to energy production. On the stock market, Chevron is currently valued at $228 billion.

In the last quarter, Chevron posted revenue of $42.55 billion and a profit of $6.11 billion. Most recently, the oil giant paid its shareholders a quarterly dividend of $1.34 per share. Extrapolated for the year, this results in a payout of $5.36. At the current share price level ($118.60), the dividend yield thus amounts to 4.5%.

IBM (IBM)

IBM, a traditional technology group, is also among the top dividend aristocrats. In the past quarter, the U.S. IT and consulting company achieved an annual surplus of $1.13 billion on revenues of $17.61 billion. Its stock market valuation currently stands at $119 billion. 

The latest quarterly dividend was $1.64 per share. Extrapolated for the year, that works out to a payout of $6.56. This gives investors a dividend yield at the current share price level ($132.62) of 4.98%.

AbbVie (ABBV)

AbbVie is a pharmaceutical company that focuses particularly on areas of high unmet medical need. Key research areas include hepatitis C, cancer, immune, kidney and nerve diseases, and women’s health. In addition, more than 20 other drugs are in phase II or phase III stages of approval. They are designed to help treat diseases such as Parkinson’s, Alzheimer’s, endometriosis and schizophrenia.

In the second quarter, AbbVie posted an 11% increase in revenue to $14.34 billion. Profit was $3.17 billion. The entire company currently costs $237 billion on the stock market. In the last quarter, $1.41 per share was distributed to investors. Extrapolated for the year, the payouts add up to $5.64. Thus, at the current share price level ($134), the dividend yield is 4.20%.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

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