Dividend Stock Lists
Dividend Stock Lists are a great approach to find the best dividend companies. The best stocks belong to companies that have the ability to pay and grow their dividends over a long period of time. Your dividend growth & income strategy should include these lists because they are a great place to find companies to begin investigating:
Why Dividend Growth?
Why is it important to find companies that consistently raise their dividend? Dividends provide income and receive favorable tax treatment. As companies grow earnings and raise dividends their stock prices usually follow in the long run.
Dividends are also an important indicator of the value of a stock. A company that is able to consistently raise its dividend probably means they are consistently growing their earnings also. In other words, dividend growth helps to identify well managed companies that have confidence in their future earnings. The companies that raise their dividend year after year are the best dividend companies.
The “miracle” of compounding is explosive when it’s combined with increasing dividends. Reinvesting dividends that are increasing is “double compounding”. If you don’t completely understand this powerful concept, take a few minutes to read Dividend Growth Compounding Versus Interest Compounding.
Dividend Stock Lists
Using dividend stock lists is an efficient approach to finding companies that consistently raise their dividend. Each dividend stock list has its own requirements for making the list.
The Dividend Kings List includes a select group (currently 20) of S&P 500 companies which have increased their dividend for 50+ consecutive years.
Aristocrats are a list of S&P companies that have raised their dividend for 25 consecutive years or more. These are the very best of the large company dividend payers. Their size and track record make them potential choices for those who want consistent dividend growers.
Dividend Champions are a list of companies traded on US exchanges which have raised their dividend for 25 consecutive years or more. This list is similar to Dividend Aristocrats but with more small and mid-cap choices due to the fact companies are not required to be S&P 500 members.
Dividend Contenders are a list of companies traded on US exchanges which have raised their dividend for at least 10 consecutive years but less than 25 years. Here you will find great companies that don’t have quite the long term record of companies on the Dividend Champions List.
Dividend Achievers are a list of companies traded on US exchanges which have consistently raised dividends for at least 10 years. The larger universe of stocks and lower requirements provides a wider choice of still high quality dividend payers, particularly in the Mid-Cap and Small Cap areas.
Dividend Challengers are a list of companies traded on US exchanges which have raised their dividend for at least 5 consecutive years but less than 10 years. Here you find companies that have an excellent short term record. Some of these companies are not as mature but have the potential to be Dividend Contenders and Champions in the future.
Is The Price Right?
The value investor will always want to consider the margin of safety and intrinsic value of a stock because the price you pay matters greatly when buying a dividend stock. The best clue I can give you is, once you find these companies, have the discipline and patience to buy them at the right valuation (price).
Being a dividend detective is hard work, but dividend stock lists can be a great place to find the best dividend companies for your investment portfolio. I like to maintain a stock buy list of companies that meet my standards and buy them when their prices fall to bargain levels. Remember, just because a company is one of the best does not mean it is priced right for inclusion in your portfolio.