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| The Standard & Poor's Dividend Aristocrats
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Income is a big part of investors' returns. Stocks, mutual funds and fixed income ideas in this column are featured because they are relatively solid in their ability to pay dividends or interest. We're giving income investors a resource to start their research for investments that give better yields with lower risk. June 8, 2011 - Standard & Poor's is best known for its indexes: the S&P 500, the S&P 2000, etc. But it has many indexes that are not as well known. One of them should be of particular interest to Income Investors: The S&P Dividend Aristocrats. What makes this list special is that each stock in the index has increased its dividend every year for at least 25 consecutive years. These are all large cap, blue chip companies that are part of the S&P 500 index.
There are 42 stocks in the index. The average size (by market cap) is $43.23 billion. The Largest stock is $48.13 billion. The Smallest is $36.37 billion. The Top 10 Holdings comprise 25.89% of the Index. Currently the top 10 stocks by Market Cap are: | Name/Ticker | Sector | Yield | | Cintas Corp (CTAS) | Industrials | 1.60% | | Bard, C.R. (BCR) | Healthcare | 0.70% | | Ecolab Inc. (ECL) | Materials | 1.30% | | Chubb Corp. (CB) | Financials | 2.40% | | Johnson & Johnson (JNJ) | Healthcare | 3.50% | | McDonald's Corp. (MCD) | Consumer Discretion | 3.00% | | Becton, Dickinson & Co. (BDX) | Healthcare | 1.90% | | McGraw-Hill Cos. Inc. (MHP) | Consumer Discretion | 2.40% | | PepsiCo Inc. (PEP) | Consumer Staples | 3.00% | | Sigma-Aldrich Corp. (SIAL) | Materials | 1.10% |
A couple of interesting points about this list. Of the 10 stocks, 3 are from Health Care and 3 are from Consumer oriented companies. The other is that while each has raised its dividend annually for at least a quarter of a century, the absolute yield isn't particularly noteworthy. That's usually because the incremental raises are very small or, more likely, the stock has performed so well that its price has outpaced the dividend hikes. While this is a good list to know, it doesn't have enough information for a "Buy" decision. Yield alone, like any one number, is not the only reason to buy a stock. Further analysis is recommended on each stock before any investment is made. For more information, please see the Web site: the S&P Dividend Aristocrats. |