What are the Dividend Aristocrats and the list for 2023

By Behiver | behiver | 4 Sep 2023

I've not talked too much of my investments outside of crypto, but I've posted some articles in the past about my stocks portfolio alongside with some opportunities I've picked along the way. And as I like to read about the stocks domain, sometimes I find useful and interesting insight about it that I feel to share it with the finance community. Going in more details about this, I just found out about a secretive list within the stocks known under the name of Dividend Aristocrats. So in this post I intend to go more deep in what this means and also provide the list of Dividend Aristocrats for 2023, that I've succeeded to grab it from a broker sharing it with its investors. So let's begin!

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What are the Dividend Aristocrats?

Dividend Aristocrats are a chosen group of well selected S&P 500 companies that have a record of boosting their annual dividend distribution amount for at least the last 25 consecutive years. This started in 1989, when the first list of Dividend Aristocrats was published in the form of 26 companies. Considering that the payment of dividends usually takes place on a quarterly cycle like January, April, July and October, this determines for the list to evaluate the companies eligibility. Along the way some companies have fallen out of the list, while others have entered it gracefully. Crisis on one side and bull runs on the other have truly challenged the stocks, but in the same time have refined this list to only the strong that have survived. So from this purpose, I think that it is a solid stocks list that should be given considerations when one want to build or expand a portfolio.

Eligibility requirements

The Dividend Aristocrats list comes with some specific criteria that included companies must fulfil. Here are some of them:

  • maintain of at least 25 consecutive annual dividend hikes
  • have a minimum market capitalization of $3 billion
  • achieve an average daily trading value of at least $5 million over the three-month period that precedes the rebalancing date
  • after each quarterly rebalancing, the list must have at least 40 components
  • the cumulative share of all companies in any single sector may not exceed 30%

Is there any Index for Dividend Aristocrats

It seems there is also on Index that tracks the Dividend Aristocrats. The "ProShares S&P 500 Aristocrats ETF" is the only ETF that exclusively tracks the performance of Dividend Aristocrats - S&P 500 members that have increased their dividends for at least 25 consecutive years. These stocks tend to have lower risk levels, thus might provide a good entry level for those wanted to mitigate risks. This ETF currently owns 64 Dividend Aristocrat stocks.

While the above introductory details should provide an idea for what the Dividend Aristocrats represent, I will move forward and publish the List for 2023 that I have grabbed it.

Dividend Aristocrats List 1-37 as of Friday, 1st of September 2023

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Dividend Aristocrats List 38-68 as of Friday, 1st of September 2023

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Now in my case while I am involved in stocks for a couple of years and I want through bull and bear market cycles, I've ended up to the conclusion that is safer to have a portfolio built around companies that also offer dividends. Why? Simply because I am not waiting just for the stocks volatility to push their price up and simply trade on them, but also I have a periodic revenue stream that I can benefit from. Sure the dividends are not astronomic (even some sectors like Energy provided some amazing returns in nowadays crisis), but simply are working like a comfy cushion for troubled times. And with some diversifications I might feel good enough about my portfolio even if some of my assets would be in the red at some point in time. Thus, while I have some assets already from the Dividend Aristocrats list without knowing about it before - like Chevron - in the next period I will be trying to rebalance my portfolio and include more companies from this list.

What about you? Are you invested in stocks and what's your strategy on that?

Posted Using LeoFinance Alpha

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