The Fastest-Growing Dividend Aristocrats

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 superinvestor 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."

Let's examine the top 20 fastest-growing yields among these dividend aristocrats. For context, I've also included their trailing yield.

Company

5-Year Dividend
Growth Rate

Yield

CenturyLink (NYSE: CTL  )

64.6%

7.2%

Lowe's (NYSE: LOW  )

30.7%

1.6%

McDonald's (NYSE: MCD  )

27.5%

3.2%

Walgreen (NYSE: WAG  )

21.8%

1.7%

AFLAC (NYSE: AFL  )

21.0%

2.3%

Target (NYSE: TGT  )

19.3%

2.0%

W.W. Grainger (NYSE: GWW  )

17.7%

1.5%

VF Corp (NYSE: VFC  )

17.2%

2.5%

Automatic Data Processing (NYSE: ADP  )

16.3%

2.8%

Wal-Mart (NYSE: WMT  )

15.1%

2.7%

Becton, Dickinson (NYSE: BDX  )

15.0%

2.0%

Clorox (NYSE: CLX  )

13.7%

3.2%

PepsiCo (NYSE: PEP  )

13.4%

2.9%

Ecolab (NYSE: ECL  )

12.0%

1.4%

Archer-Daniels-Midland (NYSE: ADM  )

12.0%

1.8%

Sherwin-Williams (NYSE: SHW  )

11.9%

1.7%

Procter & Gamble (NYSE: PG  )

11.6%

3.3%

Chubb (NYSE: CB  )

11.5%

2.5%

Sigma-Aldrich (Nasdaq: SIAL  )

11.0%

1.1%

Leggett & Platt (NYSE: LEG  )

11.0%

4.7%

Source: Standard & Poor's.

These aren't formal recommendations -- just ideas for your own further research. Still, they could give you a great start toward find companies capable of paying rising dividends for a quarter-century or more.

If you're interested in other income ideas, take a look at 13 other dividend stocks in a free report from The Motley Fool called "13 High-Yielding Stocks to Buy Today." Hundreds of thousands have requested access to this special free report, and now you can access it today at no cost. To get instant access to the names of these 13 high yielders, simply click here -- it's free.

Jim Royal, Ph.D., owns McDonald's and P&G. Becton Dickinson, Lowe's, and Wal-Mart are Motley Fool Inside Value choices. AFLAC and Sherwin-Williams are Stock Advisor selections. Wal-Mart is a Global Gains recommendation. Automatic Data Processing, Clorox, McDonald's, PepsiCo, Procter & Gamble, and Wal-Mart are Income Investor picks. Motley Fool Options has recommended writing covered calls on Lowe's and diagonal call positions on PepsiCo and Wal-Mart. The Fool owns shares of AFLAC, Clorox, PepsiCo, and Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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