What Are The Dividend Achievers, Contenders, Aristocrats, Champions, and Kings?

It is a visitor contribution by Kanwal Sarai from Merely Investing

Up to date on December thirteenth, 2024 by Bob Ciura

Traders can observe a number of completely different methods for shares. Some traders observe momentum methods, buying and selling shares with excessive worth good points. Different traders observe a excessive progress technique specializing in tech shares, like Apple (AAPL) and Amazon (AMZN).

One more sort of investor seeks revenue by shopping for and holding high-yield shares, like utilities and actual property funding trusts (REITs).

A fourth method is dividend progress investing, specializing in shares that pay a rising dividend yearly. This technique is more and more widespread, and the kind of shares are categorized into the Dividend Achievers, Contenders, Aristocrats, Champions, and Kings.

The Dividend Aristocrats are a bunch of 66 shares within the S&P 500 Index, which have elevated their dividends for 25+ consecutive years.

You’ll be able to obtain an Excel spreadsheet of all 66 Dividend Aristocrats (with metrics that matter akin to dividend yields and price-to-earnings ratios) by clicking the hyperlink beneath:

This text will talk about dividend progress investing, and several other of the varied lists of dividend progress shares.

What’s Dividend Progress Investing?

Dividend progress investing is an method to purchasing and holding the inventory of corporations growing their dividend yearly.

Dividend progress traders want to put money into undervalued shares paying a dividend as a substitute of overvalued shares that don’t.

As well as, these traders rationalize that dividends require actual money to pay shareholders and thus are an indicator of the businesses’ precise earnings and well being.

Moreover, an organization demonstrating the flexibility to boost the dividend yearly over time in all probability has a very good enterprise mannequin.

Alternatively, an organization chopping or suspending its dividend is clearly struggling.

Dividend progress shares are sorted into teams referred to as the Dividend Achievers, Contenders, Aristocrats, Champions, and Kings, however what precisely are they?

What are the Dividend Achievers, Contenders, Aristocrats, Champions, and Kings?

Dividend Achievers are corporations which have raised their dividends for ten years in a row or extra. Moreover the 10-year dividend progress streak, corporations have to be listed on the New York Inventory Alternate or Nasdaq and have a three-month common every day buying and selling quantity of $1 million.

At present, there are about 400 Dividend Achievers. Many corporations are from the Shopper, Industrials, Financials, and Utilities sectors. As well as, the group contains expertise corporations like Microsoft (MSFT), and many others.

The subsequent class is the Dividend Contenders. They’re shares elevating the dividend for between 10 and 24 years. The listing is much like the Dividend Achievers listing, however since it’s capped at 24 years, the entire variety of corporations is smaller.

At present, there are round 368 Dividend Contenders. The sector with essentially the most important illustration is Monetary Companies, adopted by Industrials and Utilities. This group contains corporations like House Depot (HD), Huntington Ingalls Industries (HII), and lots of native and regional banks.

The Dividend Aristocrats are corporations which have raised their dividends for 25+ years and are part of the S&P 500 Index.

As well as, they should have a minimal market capitalization of $3 billion and a $5+ million common every day buying and selling quantity for the three months earlier than the rebalancing date.

There are at the moment 66 Dividend Aristocrats. The quantity is comparatively small due to the stricter necessities. Sectors with essentially the most important illustration are Shopper Staples and Industrials.

Firms on this listing are sometimes bigger, well-established corporations which can be market leaders. For instance, corporations like Worldwide Enterprise Machines (IBM), Colgate-Palmolive (CL), Coca-Cola (KO), and Consolidated Edison (ED) are on the listing.

The Dividend Champions are just like the Dividend Aristocrats. Nevertheless, the one requirement is growing the dividend for 25 or extra years. Consequently, the variety of corporations on the listing is bigger at 137.

As well as, the listing contains corporations which can be part of the Dividend Aristocrats and ones with a market capitalization of lower than $3 billion and aren’t a member of the S&P 500 Index.

The 2 sectors with essentially the most illustration are Industrials and Monetary Companies. Smaller corporations on this listing embody MGEE Vitality (MGEE), and Sonoco Merchandise (SON).

The final class is the Dividend Kings. To achieve this standing, an organization should improve the dividend for 50+ consecutive years. There isn’t any different requirement; nonetheless, the duty isn’t a straightforward one.

At present, there are solely 53 corporations on the listing. Examples of corporations on this listing embody Federal Realty Belief (FRT), Emerson Electrical (EMR), Johnson & Johnson (JNJ), and Procter & Gamble (PG).

Dividend Aristocrat Spotlight: Pentair plc (PNR)

Pentair is a water options firm that operates in 3 segments: Aquatic Programs, Filtration Options, and Move Applied sciences. It was based in 1966.

The corporate has elevated its dividend for greater than 4 many years in a row, when adjusted for spin-offs. Pentair is among the high water shares.

Pentair reported its third quarter earnings outcomes on October 22. The corporate was capable of generate revenues of $990 million through the quarter, down 2% year-over-year.

Supply: Investor Presentation

Core gross sales, which exclude the impression of forex charge actions, acquisitions, and dispossessions, have been down 1% 12 months over 12 months.

Pentair recorded earnings-per-share of $1.09 for the third quarter, which was up 16% year-over-year. Pentair’s earnings-per-share beat the analyst consensus by $0.02.

Click on right here to obtain our most up-to-date Positive Evaluation report on Pentair (preview of web page 1 of three proven beneath):

Dividend King Spotlight: PPG Industries (PPG)

PPG Industries is the world’s largest paints and coatings firm. Its solely rivals of comparable dimension are Sherwin-Williams and Dutch paint firm Akzo Nobel.

PPG Industries was based in 1883 as a producer and distributor of glass (its title stands for Pittsburgh Plate Glass) and at the moment has roughly 3,500 technical staff positioned in additional than 70 international locations at 100 places.

On October sixteenth, 2024, PPG Industries reported third quarter outcomes for the interval ending September thirtieth, 2024. For the quarter, income fell 1.5% to $4.57 billion, which was $90 million lower than anticipated.

The corporate generates annual income of about $18.2 billion.

Supply: Investor Presentation

Adjusted internet revenue of $500 million, or $2.13 per share, in contrast favorably to adjusted internet revenue of $493 million, or $2.07 per share, within the prior 12 months. Adjusted earnings-per-share was $0.02 beneath estimates.

Third quarter natural income progress was as soon as once more flat in comparison with the prior 12 months. Efficiency Coatings income of $2.921 billion was up 1% from the identical interval of 2023.

Greater volumes (+2%) and promoting costs (+1%) have been partially offset by divestitures (-1%) and a headwind from overseas forex change (-1%).

Click on right here to obtain our most up-to-date Positive Evaluation report on PPG (preview of web page 1 of three proven beneath):

Which shares ought to I put money into?

On the finish of the day a very powerful query for traders is: Which shares ought to I put money into? The easy reply is: Put money into high quality dividend paying shares when they’re priced low (undervalued).

The Merely Investing on-line course teaches you precisely the right way to establish when a inventory is a top quality inventory (and when it isn’t a top quality inventory), and when a inventory is undervalued (and overvalued).

A easy guidelines of 12 guidelines of investing lets you choose high quality shares when they’re undervalued, and simply filter via the listing of dividend Achievers, Contenders, Aristocrats, Champions, and Kings.

Different Dividend Lists

The next lists include many extra high-quality dividend shares: