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 Utilities industry. For context, I've also included their five-year annualized dividend growth rate.


Trailing Yield

5-Year Dividend

Growth Rate

1. Integrys Energy Group (NYSE: TEG) 5.1% 4.1%
2. Consolidated Edison (NYSE: ED) 4.8% 0.9%
3. Questar (NYSE: STR) 3.3% 3.4%

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 finding companies capable of paying rising dividends for a quarter-century or more.

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These are a handful of the thousands of public companies that can help you secure a third income for life. If you'd like to see which others make the cut, try Income Investor free for the next 30 days.

Jim Royal, Ph.D., doesn't own any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.