The 69 stocks that have made the grade as Dividend Aristocrats® -- having raised their dividends for at least 25 years running -- tend to outperform broader markets. (The term Dividend Aristocrats® is a registered trademark of Standard & Poor’s Financial Services LLC.) A 2025 analysis by Charles Schwab found that the group had outperformed the S&P 500 by an average 1.59% a year since 2000.
For context, the S&P 500 has achieved average annual returns of 7.33% this century so far, so an extra 1.59% of annual returns would make the difference between having $58,600 with the S&P 500 and $84,700 with Dividend Aristocrats® on an initial $10,000 investment.
It's not hard to see why Dividend Aristocrats® would outperform as a group. Companies that can increase payouts year after year for decades through all kinds of economic conditions tend to be resilient and well-managed. But when a Dividend Aristocrat® falls, it can fall hard.
Look no further than Walgreens Boots Alliance, which fell off the prestigious list in January when it suspended its dividend after 90 years of annual payouts. Shares plunged 15% in intraday trading on the announcement, and the company was delisted from the Nasdaq in August.
But Dividend Aristocrats® can also fail investors in less dramatic ways by making the list while offering increasingly token dividend increases that are swamped by inflation over time. Here are three Dividend Aristocrats®, each with a dividend increase that is failing to keep up with inflation as its business struggles, that investors should avoid.
1. Hormel Foods
The $13 billion packaged foods company Hormel Foods (HRL 9.13%) hasn't announced a dividend increase in 2025 so far as I write this on Oct. 26, but last year it raised the payout by 2.5%, an increase that fell short of the 2.9% inflation seen in 2024. Zooming out, Hormel's dividend growth has trailed the inflation rate since 2021, raising payouts by 18% compared to the 24% rise in the Consumer Price Index (CPI).
Signs are mounting that the company will struggle to raise payouts at a rate matching inflation in the years ahead, too. Hormel's payout ratio is 84%, meaning it already sets aside that percentage of its net earnings to meet its current dividend. That's significantly higher than the 35% to 55% range generally considered healthy for dividend stocks and leaves Hormel little margin for error when planning future dividend increases, especially since the company only grew earnings by 4% last quarter.
NYSE: HRL
Key Data Points
For now, Hormel shares offer a roughly 5% yield, well above the S&P 500 average. However, shares of Hormel are down 24% year to date through Oct. 24, which has boosted the dividend yield even as the stock trails the S&P 500's rise in that time frame.
Hormel may well announce a dividend increase for 2025. But it will likely trail the annual inflation rate once more, and the company is at risk of an official dividend cut in the years ahead.
2. Archer-Daniels-Midland
Archer-Daniels-Midland (ADM 1.39%), a $30 billion farm products manufacturing company, announced a mere 2% dividend increase this year amid cratering earnings growth. Earnings per share (EPS) fell by 54% year over year last quarter, as rising trade tensions combined with accounting issues to roil its business. The company is downsizing many operations as it plans to reduce costs by $500 million to $700 million over the next few years.
NYSE: ADM
Key Data Points
With its payout ratio of 87%, Archer-Daniels-Midland could soon see its payout ratio pass 100%, a "code red" signal for any dividend payer if the company sees even a modest further decline in earnings. Analysts predict that the pain for this company is nowhere near over, as they forecast sales growth of just 1.3% for 2026. With these fundamentals, Archer-Daniels-Midland is at high risk of a dividend cut in 2026; even if it avoids this fate, its dividend increase in 2026 will likely severely lag inflation again.
3. Tyson Foods
Tyson Foods (TSN 2.72%), a meat-processing company headquartered in Arkansas, has paid a rising dividend since 1988. But this year's dividend increase of 2% trailed inflation, and the company's payout ratio of 90% is the highest on this list.
NYSE: TSN
Key Data Points
Like Hormel, Tyson Foods pays a dividend yield well over the S&P 500 average -- 3.8% compared to the 1.2% yield sported by the average S&P 500 dividend company. But this high yield is also a function of the company's falling share price. Tyson Foods stock is down 10% for the year compared to the double-digit percent rise of the S&P 500. The company reported a year-over-year earnings decrease of 68% last quarter as the company struggled with rising beef costs and closed processing plants throughout the U.S.
Zooming out, Tyson Foods has raised its dividend by just 12.5% in the last five years, including two increases of just $0.01 per share. This dramatically trails the 25% inflation seen in this time frame and cements Tyson Foods' status as a Dividend Aristocrat® in name only. In 2026, it may lose even that, as its dangerously high payout ratio of 90% leaves it almost no room for error to raise its dividend amid falling earnings. This is a stock to avoid.