Dividend-paying companies are an oasis in the desert of underperforming stocks. They offer solid payouts today and the promise of capital gains tomorrow. According to a study by Ibbotson, reinvested dividends made up about 40% of total stock returns from 1926 to 2006. In fact, dividend investing is so appealing that super-investor Warren Buffett has made it a significant component of his portfolio.
When searching for great dividend stocks, it makes a lot of sense to start with companies that have been playing the dividend game the longest. Standard & Poor's has culled the dividend winners from the also-rans in a list it calls the "Dividend Aristocrats."
Recently, S&P announced its Dividend Aristocrats for 2011, which included adding three companies and deleting three others. Here are the latest changes:
Dividend Aristocrats additions
|
Company |
Yield |
5-Year Dividend Growth Rate |
|---|---|---|
|
Ecolab |
1.4% |
12.1% |
|
McCormick |
2.5% |
10.5% |
|
Hormel |
2.1% |
10.1% |
Dividend Aristocrats deletions
|
Company |
Yield |
5-Year Dividend Growth Rate |
|---|---|---|
|
Eli Lilly |
5.6% |
5.6% |
|
Integrys Energy Group |
5.6% |
4.1% |
|
SUPERVALU |
4% |
(6.8%) |
The Dividend Aristocrats aren't formal recommendations -- just ideas for your own further research. Still, they could give you a great start toward finding companies capable of paying rising dividends for a quarter-century or more. You can see the top yielders among Dividend Aristocrats here.
Looking for more investable stocks? My fellow Fools have put together a free report detailing 13 of their favorite high-yield stock ideas.
