The S&P 500 Dividend Aristocrats Index is a collection of S&P 500 firms that have increased dividends for at least 25 years in a row.
Are Dividend Aristocrats good investments?
Dividend aristocrats are firms that have a demonstrated track record of increasing their dividends year after year. Many investors believe them to be the best equity income investments you can make because of their continuous performance.
Do Dividend Aristocrats outperform S&P 500?
The S&P 500 Dividend Aristocrats index focuses solely on a small number of high-quality companies within the S&P 500 that have increased their dividends for at least 25 years. The Dividend Aristocrats presently include 50 well-known companies, with more than half of them having increased their dividends for more than 40 years.
The S&P Dividend Aristocrats Index has outperformed the broader S&P 500 Index with reduced volatility since its debut in May 2005.
Dividend Aristocrats Outperformed the S&P 500
The performance mentioned is from the past and does not guarantee future results. An investment’s return and principle value will change, so an investor’s shares may be worth more or less than the original cost when sold or redeemed. The actual performance may be lower or higher than that stated. See Performance for standardized returns and performance data up to the most recent month end. Index results are purely for demonstration purposes and do not reflect fund performance. Management fees, transaction charges, and expenses are not included in index performance returns. Indexes are not managed and cannot be invested in.
What is a Dividend Aristocrats ETF?
Dividend ETFs are divided into several categories, including index funds, geographies, and equities with historically increasing dividends, such as dividend aristocrats. Other forms of dividend ETFs include sectors such as real estate (REITs) and utility or preferred equities, which are noted for their high yields.
We’ve highlighted some of the best dividend ETFs in each major category below. Keep in mind that these are not recommendations for any specific fund. They’re simply examples of the types of funds you might look at when looking for the best dividend ETF for you.
Diversified High Dividend ETFs
Companies that pay higher-than-average dividends are included in high dividend ETFs. Companies that pay bigger dividends are more likely to have higher risk profiles and so be prone to more price volatility.
International Diversified High Dividend ETFs
Overseas dividend ETFs are similar to domestic high-dividend ETFs in that they invest in international companies rather than those based in the United States. This type of global exposure can help you diversify your portfolio even more.
If you plan to rely significantly on international dividend ETFs, check with a tax advisor because their dividend payments may be taxed at a higher, or at least different, rate than those paid by U.S.-based firms.
Dividend REITs
REITs are corporations that own stock in firms that acquire or lend money to income-producing real estate. REITs are obligated by law to pay out 90% of their earnings to shareholders, making them ideal for individuals looking for high dividends.
Dividend Aristocrat ETFs
Dividend aristocrats are the gold standard of dividend-paying stocks since they have a track record of raising dividend payments year after year for up to 20 years. As a result, they’re popular among investors looking for a continuous stream of dividend income.
Is Kinder Morgan a dividend aristocrat?
This Aristocrat will almost certainly continue to provide a healthy dividend. The oil and gas transportation industry is expected to develop at a compound annual growth rate of 6% through 2026, owing to increased demand. Pipeline projects that were put on hold during the pandemic are now ramping up and running at full capacity. This could give Enbridge with revenue growth to fund dividends, as well as a boost to the stock price as it recovers from a 35% decline in 2020. The stock dropped from $42 to $27 before regaining momentum and reaching the $40 barrier once more.
Are dividend aristocrats safe?
Stocks that provide dividends are always safe. Dividend aristocrats—companies that have increased their dividend every year for the past 25 years—are frequently seen as safe investments.
Is Verizon an aristocrat?
Verizon Communications (NYSE: VZ), a future “Dividend Aristocrat,” took a shot at AT&T (NYSE: T) with its latest dividend announcement.
In line with the previous three quarters, Verizon declared a quarterly dividend of 62.75 cents per outstanding share. Verizon shareholders who were present at the conclusion of business on July 9, 2021 will receive a quarterly dividend on August 2, 2021. Based on the current Verizon share price, the annual dividend yield is 4.5 percent.
“As we continue to execute our multi-purpose network strategy and increase the top and bottom lines, we are committed to delivering value to our shareholders,” stated Chairman and CEO Hans Vestberg. “We expect the Board will be able to enhance the dividend again later this year, as a result of the strength of our business and revenue growth trajectory, as we have done for the past 14 years.”
With its plans to merge its WarnerMedia assets with Discovery, AT&T just stated that it will decrease its dividend by roughly half (NASDAQ: DISCA).
“Dividend Aristocrats” are S&P 500 firms that have grown their dividends for at least 25 years in a row.
Verizon would have to wait another ten years to join the prestigious list after this year.
How many dividend stocks should I own?
- For most investors, owning 20 to 60 equally-weighted stocks appears reasonable, depending on portfolio size and research time limits.
- Stocks should be spread among many sectors and industries, with no single sector accounting for more than 25% of a portfolio’s value.
- Stocks with a high level of financial leverage are more volatile and provide a higher risk to investors.
- The beta of a stock indicates how volatile it has been in relation to the market.
Are dividend ETFs worth it?
Dividend-paying exchange-traded funds (ETFs) are becoming increasingly popular, particularly among investors seeking high yields and greater portfolio stability. Most ETFs, like stocks and many mutual funds, pay dividends quarterly—every three months. There are, however, ETFs that promise monthly dividend yields.
Monthly dividends are more convenient for managing cash flows and provide a predictable income stream for planning. Furthermore, if the monthly dividends are reinvested, these products provide higher overall returns.
Do Tesla pay dividends?
Tesla’s common stock has never paid a dividend. We want to keep all future earnings to fund future expansion, so no cash dividends are expected in the near future.
