2011's Top Dividend Aristocrats

Yes, dividend investing is popular. And it may become even more popular, now that Congress has extended legislation that maintains the low tax rate on corporate payouts. You can find many great dividend stalwarts among the companies that have successfully paid out cash for decades.

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 culls the dividend winners from the also-rans in a list it calls the "dividend aristocrats." These companies have paid and increased their dividend for at least 25 years.

Standard & Poor's announced its annual adjustment to the dividend aristocrats in December, so this is the latest version of the popular list. Below are the 25 highest-yielding constituents, and you can click on any of the green plus signs next to the ticker symbols to add those stocks to your watchlist and get all of our Foolish analysis on the stock.

Company

Yield

5-Year Average Annualized Dividend Growth Rate

CenturyLink (NYSE: CTL  )

7.5%

64.3%

Pitney Bowes (NYSE: PBI  )

6.7%

3.2%

Cincinnati Financial (Nasdaq: CINF  )

5.8%

5.0%

Leggett & Platt (NYSE: LEG  )

4.6%

10.8%

Consolidated Edison (NYSE: ED  )

4.5%

0.9%

Kimberly Clark (NYSE: KMB  )

4.2%

7.8%

Abbott Laboratories (NYSE: ABT  )

3.6%

9.9%

Johnson & Johnson (NYSE: JNJ  )

3.4%

10.4%

Procter & Gamble (NYSE: PG  )

3.2%

11.5%

Clorox (NYSE: CLX  )

3.2%

14.1%

PepsiCo (NYSE: PEP  )

3%

13.1%

McDonald's (NYSE: MCD  )

2.9%

28.2%

Bemis (NYSE: BMS  )

2.8%

5.0%

Coca-Cola (NYSE: KO  )

2.8%

9.3%

Wal-Mart (NYSE: WMT  )

2.7%

15.6%

Automatic Data Processing (NYSE: ADP  )

2.7%

15.5%

AFLAC (NYSE: AFL  )

2.6%

20.3%

PPG Industries (NYSE: PPG  )

2.5%

3.1%

Chubb (NYSE: CB  )

2.5%

10.8%

Emerson Electric (NYSE: EMR  )

2.5%

9.6%

Air Products & Chemicals (NYSE: APD  )

2.5%

9.5%

Lowe's (NYSE: LOW  )

2.4%

29.7%

McGraw-Hill (NYSE: MHP  )

2.4%

7.1%

Stanley Black & Decker (NYSE: SWK  )

2.4%

4.3%

Target (NYSE: TGT  )

2.3%

20.1%

Source: Standard & Poor's.

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.

Given their strong track records, these stocks are a great place to begin your research, but they're not formal recommendations. High yields could be time bombs, and that really attractive high yield could suddenly die. So investigate such companies thoroughly, and diversify across sectors, no matter how delicious that dividend looks.

For a basket of some high-yield some dividend opportunities, click here to get The Motley Fool's five-page free report: "13 High-Yielding Stocks to Buy Today." You can also click on any of the green plus signs next to the ticker symbols above to add those stocks to your watchlist and get all of our Foolish analysis on the stock.

Jim Royal, Ph.D., owns shares of McDonald's, Procter & Gamble, and Johnson & Johnson. The Motley Fool owns shares of PepsiCo, Coca-Cola, Clorox, Abbott Labs, Johnson & Johnson, AFLAC, and Wal-Mart. Motley Fool newsletter services have recommended buying shares of Abbott, Procter & Gamble, McDonald's, Johnson & Johnson, Wal-Mart, PepsiCo, Emerson Electric, Coca-Cola, Clorox, Lowe's, Automatic Data Processing, Kimberly Clark, and AFLAC; creating diagonal call positions on Wal-Mart, PepsiCo, and Johnson & Johnson; and writing covered calls on Lowe's. 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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