By
Jim Royal
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More Articles
October 26, 2010
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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."
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 Insurance industry. For context, I've also included their five-year annualized dividend growth rate.
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Company
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Trailing Yield
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5-Yr Dividend Growth Rate
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1. Cincinnati Financial (Nasdaq: CINF )
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5.2%
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7.4%
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2. The Chubb Corporation (NYSE: CB )
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2.6%
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11.7%
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3. AFLAC (NYSE: AFL )
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2.2%
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22.3%
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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.
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