Past actions are not always a prologue when it comes to increasing a dividend every year.
Still, it’s not a bad place to start.
Being a member of the
S&P 500 Dividend Aristocrats Index
confers a sign of dividend strength and long-term consistency. Its 67 members have paid out a higher dividend for at least 25 straight years. Last year, the Aristocrats returned minus 6%, including dividends, compared with minus 18% for the
S&P Dow Jones Indices, which oversees the Aristocrats, recently added three new constituents to the index:
C.H. Robinson Worldwide
That raises the question of who’s in the pipeline to join the group in the next several years?
For some clues, Barron’s looked at the
S&P High Yield Dividend Aristocrats Index,
which requires 20 straight years of dividend hikes. Some of these companies end up in the S&P 500 Dividend Aristocrats.
Barron’s selected the 10 companies in the high-yield index that are also members of the S&P 500.
|Company / Ticker||Recent Price||Dividend Yield||1-Year Return||Market Value (bil)|
|Eversource Energy / ES||$81.31||3.3%||-4.5%||$28.0|
|FactSet Research System / FDS||426.88||0.8||2.4||16.4|
|Fastenal / FAST||53.22||2.6||-0.7||31.0|
|Intl Flavors & Fragrances / IFF||112.76||2.9||-8.7||28.9|
|L3Harris Technologies / LHX||212.33||2.1||1.5||40.2|
|Lockheed Martin / LMT||469.10||2.6||23.6||117.2|
|Microchip Technology / MCHP||84.47||1.7||17.3||46.7|
|NIKE / NKE||125.73||1.1||-12.6||199.2|
|Southern / SO||67.90||4.0||2.7||73.2|
|W.R. Berkley / WRB||68.31||0.6||16.5||17.8|
Data as of Feb. 6
Source: S&P Dow Jones Indices and FactSet.
The list of companies includes
(ES), which generates natural gas and electricity. The stock yields 3.4%, one of the highest on the accompanying table. Eversource has increased its dividend every year since 2001.
(SO), a utility holding company based in Atlanta, last April announced it was raising the dividend for the 21st straight year. The stock yields 4%.
pays a quarterly dividend of 68 cents a share, for an annualized distribution of $2.72.
(NKE) also has had 21 straight years of boosting its dividend, most recently to 34 cents on a quarterly basis—an 11% increase. The apparel giant’s annualized dividend is $1.36 a share, and the stock was recently yielding 1.1%—below the 1.65% average for the S&P 500.
In another sector,
(MCHP), which yields 1.7%, has boosted its dividend every year for about two decades. The chip company recently announced that it will raise the quarterly dividend to 35.8 cents a share, an increase of 9%. That puts the annualized dividend at $1.43 a share.
Defense and aerospace company
(LMT) has increased its quarterly cash dividend for 20 straight years. The quarterly payout is at $3 a share, up from $2.80 previously, for an annualized disbursement of $12.
Other S&P 500 companies that have increased dividends for at least 20 straight years but shy of 25 years are
International Flavors & Fragrances
Fastenal’s large product portfolio includes fasteners along with tools and equipment. The stock yields 2.6%. It pays an annualized dividend of $1.40 a share, having recently announced an increase of 13% from $1.24.
For FactSet Research, which supplies financial data to customers, its 2022 fiscal year marked its 23rd year of dividend growth. It’s currently at 89 cents on a quarterly basis or $3.56 annualized. The stock yields 0.8%.
boosted its quarterly dividend nearly a year ago to $1.12 a share from $1.02, it marked the 21st annual dividend increase for the company. The stock yields 2.1%.
Insurer W.R. Berkley has raised its dividend every year for about two decades. Its quarterly dividend is 10 cents a share, and the stock yields 0.6%.
There are no guarantees that these companies will become full-fledged S&P 500 Dividend Aristocrats, but they are well on their way.
Write to Lawrence C. Strauss at firstname.lastname@example.org