5 Dividend Aristocrat Stocks

In a continued effort to expand the focus of my site’s screens and hypothetical portfolios, this article is a follow-up to an article written in early April focusing on the S&P 500 Dividend Aristocrats. The S&P 500 Dividend Aristocrats index measures the performance of large cap, blue chip companies within the S&P 500 that have followed a policy of increasing dividends every year for at least 25 consecutive years. The current list has 43 constituents and the entire list is available from S&P or on my site. If an investor’s portfolio was large enough he or she could consider purchasing the entire list.

Alternatively, an investor could invest in the SDY, the SPDR Dividend ETF, which is a variation of the Aristocrats – it seeks to replicate the “High Yield” Dividend Aristocrats Index. A third alternative is to start with the Aristocrat list and then reduce the list of candidates through screens and/or fundamental analysis. I screened for Aristocrats which had a sustainable payout ratio, a high dividend yield, relatively low debt/equity ratio, and positive return on assets and equity.

Using Finviz, which has some of the better screeners and charts available, I screened the Aristocrat list for:

• Payout Ratio < 80%,
• Dividend Yield > 3%

Below is a list of 5 Aristocrats which are worthy of further consideration, especially if one is seeking yield or seeking to reduce exposure to non-dividend paying companies. All of the companies on the list are familiar names and four of the five names were also on last month’s list.

MHP is a new addition since its share price has dropped in the past month, driving the yield over 3%.