By
Jim Royal
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More Articles
August 16, 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 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." But Standard & Poor's has also created another similar index that it calls the High Yield Dividend Aristocrats.
According to Standard & Poor's, "The S&P High Yield Dividend Aristocrats index is designed to measure the performance of the 60 highest dividend yielding S&P Composite 1500 constituents which have followed a managed dividends policy of consistently increasing dividends every year for at least 25 years."
Let's examine the top 25 high-yield dividend aristocrats ranked by yield. For context, I've also included their five-year annualized dividend growth rate.
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Company
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Yield
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5-Year Dividend Growth Rate
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CenturyLink (NYSE: CTL )
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8.3%
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63.9%
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Pitney Bowes (NYSE: PBI )
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7.6%
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3.1%
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Mercury General (NYSE: MCY )
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6.3%
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5.6%
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National Retail Properties (NYSE: NNN )
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6.2%
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3.2%
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Cincinnati Financial (Nasdaq: CINF )
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6.0%
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4.6%
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HCP (NYSE: HCP )
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5.5%
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(5.7%)
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Leggett & Platt (NYSE: LEG )
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5.4%
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10.7%
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Vectren (NYSE: VVC )
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5.3%
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2.6%
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Universal Corp (NYSE: UVV )
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5.0%
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2.2%
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Black Hills Corp (NYSE: BKH )
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4.9%
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2.2%
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Consolidated Edison (NYSE: ED )
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4.4%
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0.9%
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Atmos Energy (NYSE: ATO )
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4.2%
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1.5%
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Kimberly Clark (NYSE: KMB )
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4.2%
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7.7%
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RPM International (NYSE: RPM )
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4.2%
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5.8%
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WGL Holdings (NYSE: WGL )
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4.0%
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2.7%
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Diebold (NYSE: DBD )
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4.0%
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5.5%
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Piedmont Natural Gas (NYSE: PNY )
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3.9%
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4.0%
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Northwest Natural Gas (NYSE: NWN )
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3.9%
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4.8%
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Sonoco Products (NYSE: SON )
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3.9%
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4.0%
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Abbott Laboratories (NYSE: ABT )
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3.8%
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10.0%
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UGI Corp (NYSE: UGI )
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3.6%
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8.2%
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Johnson & Johnson (NYSE: JNJ )
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3.5%
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9.9%
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Westamerica Bancorp. (Nasdaq: WABC )
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3.5%
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2.7%
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Genuine Parts (NYSE: GPC )
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3.5%
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5.8%
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Clorox (NYSE: CLX )
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3.4%
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14.4%
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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.
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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