5 Promising Dividend Aristocrats, With an ETF Alternative
Wednesday, April 7th, 2010Scott’s Investments submits:
In a continued effort to expand the focus of my site’s screens and hypothetical portfolios, this article focuses 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.
