By
Jim Royal
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More Articles
August 15, 2011
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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 25 fastest-growing yields among these dividend aristocrats. For context, I've also included their trailing yield.
|
Company
|
5-Year Average Annual Dividend Growth Rate
|
Yield
|
| CenturyLink (NYSE: CTL ) |
63.9% |
8.4% |
| Lowe's (NYSE: LOW ) |
29.7% |
2.9% |
| McDonald's (NYSE: MCD ) |
28.9% |
2.8% |
| Walgreen (NYSE: WAG ) |
21.9% |
2.6% |
| Target (NYSE: TGT ) |
20.1% |
2.5% |
| AFLAC (NYSE: AFL ) |
19.7% |
3.2% |
| W.W. Grainger (NYSE: GWW ) |
17.7% |
1.9% |
| Wal-Mart (NYSE: WMT ) |
15.6% |
2.9% |
| Automatic Data Processing (Nasdaq: ADP ) |
14.9% |
3% |
| Clorox (NYSE: CLX ) |
14.4% |
3.5% |
| Becton, Dickinson (NYSE: BDX ) |
14.2% |
2% |
| PepsiCo (NYSE: PEP ) |
12.6% |
3.3% |
| VF Corp (NYSE: VFC ) |
12.2% |
2.3% |
| Ecolab (NYSE: ECL ) |
11.9% |
1.5% |
| Hormel Foods (NYSE: HRL ) |
11.5% |
1.8% |
| Procter & Gamble (NYSE: PG ) |
11.4% |
3.4% |
| Sigma-Aldrich (Nasdaq: SIAL ) |
11.2% |
1.1% |
| Archer-Daniels-Midland (NYSE: ADM ) |
10.9% |
2.3% |
| Family Dollar Stores (NYSE: FDO ) |
10.9% |
1.5% |
| Leggett & Platt (NYSE: LEG ) |
10.7% |
5.6% |
| Chubb (NYSE: CB ) |
10.3% |
2.6% |
| Air Products & Chemicals (NYSE: APD ) |
10.1% |
2.8% |
| Dover (NYSE: DOV ) |
10.1% |
2.3% |
| Abbott Laboratories (NYSE: ABT ) |
10% |
3.9% |
| Johnson & Johnson (NYSE: JNJ ) |
9.9% |
3.6% |
Source: Capital IQ, a division of 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. You can find the list of highest yields here.
Get the best dividend stocks you can find. Read the Fool's special report, "13 High-Yielding Stocks to Buy Today." It's free.
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