Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
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."
These S&P 1500 companies have paid and increased their dividend for at least 25 years. Because the S&P 1500 comprises small-, medium-, and large-cap stocks, you can get dividends from fast-growing mighty mites and king-sized major leaguers alike.
Let's examine the top dividend aristocrats by yield in the Food, Beverage, and Tobacco industry. For context, I've also included their five-year annualized dividend growth rate.
5-Yr Dividend Growth Rate
|1. PepsiCo (NYSE: PEP )||3%||
|2. Coca-Cola (NYSE: KO )||2.9%||
|3. Brown-Forman (NYSE: BF-B )||1.9%||
|4. Archer Daniels Midland (NYSE: ADM )||1.8%||
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.
Interested in reading more about Coca-Cola? Add it to My Watchlist, and we'll automatically aggregate our Foolish analysis on the stock just for you.