Top Dividend Aristocrats from the S&P 500 – Part 1

Dividend Aristocrats

We all face a dilemma. After all, the persistently low interest rate environment does not make an investment in traditional bonds look very attractive. Thus, many investors are looking at dividend stocks as an alternative. The phrase “dividends are the new interest” may seem trite, but in essence it describes the current situation quite well. That’s because more and more investors are looking for a reliable income stream through high-dividend stocks. This wave of dividend aristocrats is not surprising. 

Many stocks offer significantly higher yields. What matters when looking for interesting dividend stocks: Taking a look at the dividend yield (dividend per share in relation to the current share price) is certainly helpful. However, using the payout as the sole selection criterion is not advisable.

Instead, you should look at the companies that have reliably increased their dividend payments over a long period of time. These stocks are often referred to as dividend aristocrats. Studies have shown that these securities generate a significant excess return over the long term. 

Rather than size, what matters is long-term dividend growth. In my analysis today, I will introduce you to so-called dividend aristocrats from the USA. These are companies from the S&P 500 index that have increased their dividends every year for at least 20 years.

Exxon Mobil (XOM)

Exxon Mobil is a U.S. oil company. It was formed in 1999 by the merger of Exxon (Standard Oil of New Jersey) and Mobil Oil (Standard Oil Company of New York). The company is active in both the production and marketing of crude oil and natural gas. After reporting its first negative year-end in four decades in 2020, Exxon managed to return to profitability in the first quarter. With a significant increase in sales of 58% to $71.88 billion, a net profit of $6.75 billion was in the books at the end.

After a share price increase of almost 50% since the turn of the year, the stock market value is currently back at over $260 billion. In the last quarter, $0.88 per share was distributed to investors. Projected over the year, the payouts add up to $3.52. Thus, the dividend yield at the current share price level ($61.70) is 5.8%.

AT&T (T)

AT&T is one of the world’s largest telecommunications groups. The group is a leading provider of mobile and fixed-line telephone services in the USA. Mobile telephony with AT&T is possible in over 220 countries, and the company now offers complementary mobile broadband services in around 150 countries. 

AT&T is currently valued at around $177 billion on the stock market. Projected over the year, the group is paying out $2.08 to its investors. At the current share price of $24.84, this corresponds to a dividend yield of 8.4%. AT&T is one of the so-called dividend aristocrats. These are companies that have raised their payouts every year for at least 25 years. AT&T has been paying a dividend since 1984. Since then, the dividend has been raised every year.

B&G Foods (BGS)       

The food company B&G Foods also appears among the dividend aristocrats. The company manufactures, sells and distributes a portfolio of shelf-stable and frozen foods and household products in the United States, Canada and Puerto Rico. With a market capitalization of just under $515 million, B&G Foods is one of the smaller Dividend Aristocrats. 

In the most recent quarter, the company saw $1.91 billion in sales pass through its books. In the end, that was enough for a net profit of $21 million. The payouts to investors are striking: annualized, B&G Foods currently pays out $1.90 per share in dividends. At a share price of $31.71, that puts the dividend yield at an impressive 6.02%.

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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