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Dividend Aristocrats: The Top 15 For Long-Term Dividend Growth

Written By: Bob Ciura
Reviewed by: Mike Reyes
Last Updated February 2, 2022

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retired couple talking about dividend aristocrats

Dividend Aristocrats are the best dividend stocks to buy and hold over the long term have a number of key characteristics in common. First, they have leadership positions in their industry, which provides for steady profits each year, even when the economy is in recession. Next, quality dividend stocks have shareholder-friendly management teams that prioritize rising dividends within their capital allocation strategies. Finally, they have long-term growth potential due to their durable competitive advantages. Indeed, these are the blue chip stocks investors will want to look to for dividends.

Investors can find stocks with all these qualities in a single place: the Dividend Aristocrats, a group of 65 stocks in the S&P 500 Index, that have raised their dividends for 25+ consecutive years.

Top 15 Dividend Aristocrats

The following 15 stocks are among the most attractive Dividend Aristocrats to buy and hold for long-term dividend growth.

1. AT&T Inc. (T)

AT&T is a telecommunications conglomerate providing wireless, cable and satellite TV, and broadband Internet to over 100 million U.S. consumers and businesses.

AT&T has increased its dividend for over 30 years, and the stock is particularly attractive for income investors due to its high dividend yield above 6%. The company is investing heavily in growth, such as its massive acquisition of Time Warner.

The acquisition has provided AT&T with growth properties in media including streaming platform HBO Max. AT&T ended the 2021 first quarter with over 44 million combined domestic HBO and HBO Max subscribers, and nearly 64 million globally.

Related read: How To Invest In Dividend Stocks For Income

2. Becton, Dickinson & Company (BDX)

Becton, Dickinson & Company is a medical supply manufacturer. It generates annual revenue above $17 billion, with over 40% of revenue coming from outside the United States. Indeed, the company has steadily grown into an industry giant.

For example, this dividend aristocrat manufactures over 40 billion medical devices each year. Moreover, its leading industry position is due to years of significant investment in R&D to create durable competitive advantages. The company spends over $1 billion in R&D annually, and this investment has paid off as BDX now has over 27,000 active patents.

BDX has increased its dividend for nearly 50 years, and currently yields 1.4%.

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3. AbbVie Inc. (ABBV)

AbbVie is a pharmaceutical manufacturer spun off by Abbott Laboratories (ABT) in 2013. Its most important product is Humira, which will lose patent protection in the U.S. in 2023. Even so, AbbVie has multiple growth opportunities to replace Humira, particularly in the therapeutic areas of immunology, hematology, and neuroscience.

The $63 billion acquisition of Allergan is an additional catalyst. Surely, Allergan’s flagship product is Botox diversifies AbbVie’s portfolio with exposure to global aesthetics. And, in the first quarter of 2021, AbbVie’s revenue grew 51%, while earnings-per-share increased 22%.

AbbVie stock has a high dividend yield of 4.5%, which makes this dividend aristocrat particularly appealing for income investors..

Related read: 15 European Dividend Aristocrats To Diversify Your Portfolio

4. Atmos Energy (ATO)

Atmos Energy distributes and stores natural gas in eight states, and serves over 3 million customers primarily in Texas. Indeed, approximately two-thirds of its business mix is distribution, with pipeline and storage accounting for the remaining one-third.

By operating in a stable and regulated industry, Atmos Energy is allowed to generate a return on equity of 11.5%. Additionally, customer additions and rate increases provide for virtually assured revenue and earnings growth. Also, the company has a long-term objective of 6%-8% compound annual growth in its adjusted earnings-per-share.

Shareholders naturally benefit from this growth, through a rising dividend. Interestingly, Atmos has increased its dividend for over 30 years in a row.

5. Johnson & Johnson (JNJ)

Johnson & Johnson is the largest U.S. healthcare company, with a market capitalization of over $400 billion and annual sales of above $80 billion. Indeed, it has reached this level of dominance with a diversified business model and a leading position across pharmaceuticals, medical devices, and consumer healthcare products.

The company has 28 individual products or platforms which each generates over $1 billion in sales each year. Overall, this dividend aristocrat is a cash-flow machine, producing over $20 billion in free cash flow in 2020. Not surprisingly, such strong cash flow allows the company to reward shareholders with rising dividends.

Johnson & Johnson has increased its dividend for 59 consecutive years, which puts it on the exclusive list of Dividend Kings.

Related read: You can see all 31 Dividend Kings by clicking here.

6. Roper Technologies (ROP)

Roper Technologies is a specialized industrial company that manufactures products such as medical and scientific imaging equipment, pumps, and material analysis equipment. Moreover, Roper Technologies develops software solutions for the healthcare, transportation, food, energy, and water industries.

The company has generated an impressive track record of growth over the past five years. For example, from 2015-2020, Roper’s revenue increased at a 9% compound annual rate, while free cash flow increased 13% per year over this period.

Shareholders have benefited from this growth with rapid dividend increases. For example, it has increased its dividend for 28 consecutive years. Also, over the past decade, dividends-per-share have grown by nearly 24% per year, on average.

7. Lowe’s Companies (LOW)

Lowe’s is the #2 home improvement retailer in the U.S., just behind The Home Depot (HD). Interestingly, Lowe’s has increased its dividend for over 50 years, placing it on the Dividend Kings list.

Indeed, Lowe’s operates more than 2,200 home improvement and hardware stores in the U.S. and Canada. Further, this dividend aristocrat performed very well last year, as the continued strength in the housing market combined with the pandemic forcing more people to stay at home.

The company grew its net sales by 24% last year, to over $89 billion. Also, a major contributor to Lowe’s growth is its booming digital platform. In the fourth quarter, sales on increased 121%.

This growth allowed Lowe’s to increase its dividend by 9% last year, an impressive raise given the weakness of the broader U.S. economy.

8. McDonald’s Corp. (MCD)

McDonald’s is the world’s largest publicly-traded fast food company, with about 39,000 locations in over 100 countries. Over 90% of McDonald’s restaurants are independently owned and operated.

Its accelerated franchising activity over the past few years has helped boost McDonald’s profit margins, and overall earnings-per-share.

McDonald’s competitive advantage is its global scale, an immense network of restaurants, well-known brand and valuable real estate assets. The company also outperforms in a recession, as many consumers scale down their spending on dining during economic downturns.

This recession-resistance quality has allowed McDonald’s to grow its dividend over time. McDonald’s has raised its dividend every year since paying its first dividend in 1976. Shares currently yield 2.3%.

Related read: Don’t Miss These 16 Investments to Avoid In Retirement

9. Automatic Data Processing (ADP)

ADP is a business outsourcing services company. It was founded in 1949, and began with a single client. In the 70+ years since, ADP has grown into the leading payroll and human resource outsourcing company. It has over 860,000 clients, in more than 140 countries worldwide.

ADP provides services including payroll, benefits administration, and human resources management, to companies of all sizes. Furthermore, this dividend aristocrat sees high demand for these services, as companies would prefer to outsource these functions in order to better focus on their core business activities.

ADP will almost certainly continue to increase its dividend for many years to come given that its fundamentals are so strong. Also, ADP maintains a target payout ratio of 55%-60% of annual earnings, so the payout is very safe with room to grow.

10. Walmart Inc. (WMT)

Walmart is a discount retail giant, serving around 230 million customers each week. Walmart is one of the most recession-resistant businesses investors will find. Because it focuses on everyday low prices, consumers actually shop more at Walmart when times are tough.

This strength was evident in 2020, when the coronavirus pandemic wreaked havoc on the U.S. economy. Walmart’s total revenue increased 8.6% in constant currencies last year. Walmart has invested heavily in its e-commerce platform to compete against Internet rivals such as Amazon (AMZN).

This investment is paying off, as Walmart’s U.S. e-commerce sales increased 79% in 2020. Indeed, this dividend aristocrat is rewarding shareholders as a result. The company increased its dividend for the 48th consecutive year in 2020, and also approved a new $20 billion share repurchase authorization.

11. AFLAC Inc. (AFL)

AFLAC is a supplemental insurance company that provides accident, short-term disability, critical illness, dental, vision, and life insurance. AFLAC relies heavily on Japan, which represents approximately 70% of its pretax earnings, with the remaining 30% from the United States.

The company has a long history of steady growth. It has increased its dividend for 39 consecutive years, including an 18% dividend increase in 2020. Shares currently yield 2.4%.

Continued growth is likely as the company expands its product offerings, such as third-sector products which are increasingly popular in Japan. These include non-traditional products such as cancer insurance, as well as medical and income support.

12. Target Corporation (TGT)

Target was founded in 1902, and over the past several decades has grown into a leading discount retailer. This dividend aristocrat operates over 1,800 stores, with annual sales above $90 billion.

Target has increased its dividend for over 40 consecutive years. Shares currently yield 1.3%, as Target stock has raced to all-time highs over the past year. The company is reporting strong growth, particularly in e-commerce as it ramps up its digital platform.

Target’s digital sales grew by nearly $10 billion in 2020, driven by 235% growth in same-day services. The company is also highly profitable and continues to grow earnings-per-share, which allows it to keep raising its dividend even as it invests heavily in e-commerce.

13. S&P Global Inc. (SPGI)

S&P Global is a worldwide provider of financial services and business information with a market capitalization above $80 billion. The company generates annual revenue above $7 billion, and has generated high growth for several years due to the strong performance of the global capital markets. In 2020, revenue increased 11% while adjusted earnings-per-share increased 23%.

S&P Global generates about half of its operating income from its ratings segment, 30% from market and commodities intelligence and the remainder from S&P Dow Jones Indices. These businesses should continue to report growth as demand for ratings services steadily increases over time.

S&P Global has paid dividends continuously since 1937 and has increased its payout for 48 years.

14. Sherwin-Williams (SHW)

Sherwin-Williams was founded in 1866. Today, it is North America’s largest manufacturer of paints and coatings. The company distributes its products through wholesalers as well as retail stores (including a chain of more than 5,000 company-operated stores and facilities) to 120 countries under the Sherwin-Williams name.

The company also manufactures Dutch Boy, Pratt & Lambert, Minwax, Thompson’s Waterseal, Krylon, and Valspar which was acquired in 2017. Sherwin-Williams generated annual sales of $18 billion last year.

Sherwin-Williams has increased its dividend for 43 years. While the stock has a relatively low current yield at slightly less than 1%, it more than makes up for this with extremely high dividend growth. For example, the most recent dividend increase was a 23% raise in February.

15. T. Rowe Price Group (TROW)

T. Rowe Price Group is one of the largest publicly traded asset managers. The company provides a broad array of mutual funds, sub-advisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries.

T. Rowe Price has increased its dividend for 35 years. It has achieved this track record with a leading position in the financial services industry. The company had assets under management of $1.52 trillion at the end of the 2021 first quarter, up 50% year-over-year.

This has flowed through to investors, in the form of high dividend growth. In February, T. Rowe Price declared a $1.08 quarterly dividend, representing a 20% increase. Shares currently yield 2.3%.

Dividend Aristocrats FAQ

What Are The Dividend Aristocrats?

The Dividend Aristocrats list is compiled by Standard & Poor’s. It includes the 65 Dividend Aristocrats that are within the S&P 500 Index, have increased their dividends for at least 25 consecutive years, and satisfy other criteria including market cap and daily trading volume.

Are There Any ETFs That Track The Dividend Aristocrats?

Yes, there are Exchange-Traded Funds that specifically invest in the Dividend Aristocrats. The most well-known ETF is the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). The appeal of an ETF is that it provides instant diversification with a basket of stocks, with relatively low annual fees.

Are All Market Sectors Represented In The Dividend Aristocrats List?

Every major market sector is represented with at least one Dividend Aristocrats, although some market sectors have more representation than others. For example, there are only 2 stocks from the energy and information technology sectors, compared to more than a dozen consumer staples stocks.

Should Investors Buy Every Dividend Aristocrat?

Not necessarily. Investors should always conduct proper due diligence before buying a stock. It is important to remember that all stocks carry risk, even high-quality dividend stocks such as the Dividend Aristocrats.

2 thoughts on “Dividend Aristocrats: The Top 15 For Long-Term Dividend Growth”

  1. You really need to give the dividend growth rates over at least a ten year period. Some of these companies have very low rate increases but can say they have raised rates over the years which I find misleading.

  2. It would seem appropriate to update your summary on AT&T to reflect the likelihood of significant dividend decrease with the spin off of its media assets. The summary appears to be just a retread of prior summaries.


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