Want to know where to find the best dividend stocks? One place to start your search is the Standard & Poor’s dividend aristocrat index. Each December, Standard & Poor’s will re-balance the index to include new members meeting the criteria and drop others that no longer apply. The 2012 dividend aristocrat list is comprised of 51 companies, up from 42 a year ago. There were 10 new companies added to the index and one that was dropped from the 2011 dividend aristocrat list.
In order to be included on the index, a company must meet the following guidelines (among others).
- Company must be a member of the S&P 500 Index.
- Increased dividends annually for at least 25 consecutive year.
Note – The index no longer takes into account special dividends when determining 25 consecutive years.
Dividend Aristocrats List 2012
A total of 51 companies make up the dividend aristocrats list for 2012, with ten new members. At the close of business on December 16, 2011, the following companies make up this list of dividend stocks, with new members noted accordingly.
- 3M Co (MMM)
- Abbott Laboratories (ABT)
- AFLAC Inc (AFL)
- Air Products & Chemicals Inc (APD)
- Archer-Daniels-Midland Co (ADM)
- AT&T Inc (T) – NEW MEMBER
- Automatic Data Processing (ADP)
- Bard, C.R. Inc (BCR)
- Becton, Dickinson & Co (BDX)
- Bemis Co Inc (BMS)
- Brown-Forman Corp B (BF/B)
- Chubb Corp (CB)
- Cincinnati Financial Corp (CINF)
- Cintas Corp (CTAS)
- Clorox Co (CLX) – NEW MEMBER
- Coca-Cola Co (KO)
- Colgate-Palmolive Co (CL)
- Consolidated Edison Inc (ED)
- Dover Corp (DOV)
- Ecolab Inc (ECL)
- Emerson Electric Co (EMR)
- Exxon Mobil Corp (XOM)
- Family Dollar Stores Inc (FDO)
- Franklin Resources Inc (BEN) – NEW MEMBER
- Genuine Parts Co (GPC) – NEW MEMBER
- Grainger, W.W. Inc (GWW)
- HCP Inc (HCP) – NEW MEMBER
- Hormel Foods Corp (HRL)
- Illinois Tool Works Inc (ITW) – NEW MEMBER
- Johnson & Johnson (JNJ)
- Kimberly-Clark (KMB)
- Leggett & Platt (LEG)
- Lowe’s Cos Inc (LOW)
- McCormick & Co (MKC)
- McDonald’s Corp (MCD)
- McGraw-Hill Cos Inc (MHP)
- Medtronic (MDT) – NEW MEMBER
- Nucor Corp (NUE) – NEW MEMBER
- PepsiCo Inc (PEP)
- Pitney Bowes Inc (PBI)
- PPG Industries Inc (PPG)
- Procter & Gamble (PG)
- Sherwin-Williams Co (SHW)
- Sigma-Aldrich Corp (SIAL)
- Stanley Black & Decker (SWK)
- Sysco Corp (SYY) – NEW MEMBER
- T Rowe Price Group Inc (TROW) – NEW MEMBER
- Target Corp (TGT)
- VF Corp (VFC)
- Walgreen Co (WAG)
- Wal-Mart Stores (WMT)
There was only one company that got removed from the index for 2012, which was CenturyLink Inc (CTL).
Investing in Dividend Aristocrats
You won’t find companies with double digit yields on the list above. What you will find are several quality companies that have sustainable dividends that can provide income growth opportunities for many years to come. The companies found on this index have historically given their shareholders a raise every year, unlike many employers in recent years.
Even though it is not guaranteed, a company that has historically raised it’s annual dividend is more likely to continue this trend. Companies found on this list are typically well-managed, blue chip stocks that can provide a solid foundation to build a dividend portfolio. I currently own 9 dividend aristocrats in my portfolio and will likely add more in the future.
Full Disclosure: At the time of this writing, I own shares of ABT, CINF, CLX, ED, JNJ, LOW, MCD, PG, and SYY.