Deep Dive: Dozens of Dividend Aristocrat stock have been big winners in 2019

Dividend stocks are in a sweet spot, as they bridge the difference between growth and income.

Among dividend stocks, so-called Dividend Aristocrats are considered by some to be the cream of the crop.

Companies with long track records of annual dividend increases, as a group, have performed well over a long period. And some have dividend yields that are high enough to attract income-seeking investors, which may be important in the coming years if the Federal Reserve follows the European Central Bank down the road of incredibly low — or even negative — interest rates.

There are two Dividend Aristocrat indexes.

S&P 500 Dividend Aristocrats

The S&P 500 Dividend Aristocrats Index SP50DIV, +0.01%  is maintained by S&P Dow Jones Indices and is made up of the 57 companies in the S&P 500 SPX, -0.29%  that have increased regular dividends on common shares for at least 25 consecutive years. It makes no difference how high a stock’s current dividend yield is.

You can invest in the entire S&P 500 Dividend Aristocrats group with the ProShares S&P 500 Dividend Aristocrats ETF NOBL, +0.01%

Here’s how the S&P 500 Dividend Aristocrats Index has performed against the broader S&P 500 over various periods:

In the past five years, with the S&P 500’s performance being weighted toward the FAANG group (Facebook FB, -1.83% Amazon.com AMZN, -0.59% Apple AAPL, -0.04% Netflix   NFLX, +1.58%  and Google holding company Alphabet GOOG, -1.08% GOOGL, -1.05% ) and other rapidly growing technology companies, the S&P 500 Dividends Aristocrats Index’s return has lagged that of the benchmark. However, the total returns for 10, 15 and 20 years speak for themselves.

The ProShares S&P 500 Dividend Aristocrats ETF was established on Oct. 10, 2013. Here’s a comparison of its long-term performance against the SPDR S&P 500 ETF SPY, -0.31% : 

S&P High-Yield Dividend Aristocrats

S&P Dow Jones Indices also maintains the S&P High-Yield Dividend Aristocrats Index SPHYDA, -0.03% which includes the 112 companies in the S&P 1500 Composite Index that have increased their regular dividend payouts for at least 20 straight years. (The S&P 1500 Composite Index is made up of the S&P 500 SPX, -0.29% the S&P 400 Mid-Cap Index MID, -0.42%  and the S&P Small-Cap 600 Index SML, -0.24% So all S&P 500 Dividend Aristocrats are also high-yield Dividend Aristocrats.)

You can invest in the High-Yield Aristocrats as a group with the SPDR S&P Dividend ETF SDY, -0.01%

The SPDR S&P Dividend ETF was established Nov. 15, 2005. The S&P 500 High-Yield dividend Aristocrats Index was established Dec. 7, 1999. Here’s how the performance of the ETF and the High-Yield Dividends Aristocrats Index compare to that of the S&P 1500 Composite Index for various periods:

Performance for all the Dividend Aristocrats

First, here are total returns for the S&P 500 Dividend Aristocrats, sorted by how well they have performed this year:

And here are total returns for the remaining 55 High-Yield Dividend Aristocrats:

Amcor PLC’s AMCR, +1.81%  shares were first listed on the New York Stock Exchange on June 11 when the company, headquartered in Australia, acquired Bemis. The “new” Amcor hasn’t announced dividends for the combined company yet.

Shares of Kontoor Brands KTB, -3.30%  were first listed on the New York Stock Exchange on May 9 after the company was separated from V.F. Corp. VFC, +0.17% which is an S&P 500 Dividend Aristocrat. Kontoor Brands declared a quarterly dividend of 56 cents a share on July 23. With this quarterly payout, the annual dividend yield is 7.23%, based on the closing share price of $31 on July 23.

We’ll update this story with more information about Amcor and Kontoor when it is available. Representatives of S&P Dow Jones Indices and State Street Global Advisors (which runs the SPDR ETFs) weren’t immediately available for comment.

Don’t miss: These dividend stocks haven’t been scooped up by investors yet

Create an email alert for Philip van Doorn’s Deep Dive columns here.

Read More