The List of Dividend Aristocrats for 2021 : All 65

Dividend aristocrats provide significant value and are some of the most attractive stocks for investors. There are 65 dividend Aristocrats for 2021. 

Dividend stocks are long term investments. If you observe the stock market on a daily, weekly or even monthly basis, you will find that the stock market keeps going up and down. Due to many factors, even very strong dividend stocks may be volatile significantly for short periods. Therefore, instead of paying attention to stock prices daily, you should focus on picking companies with good business models, steady revenue or income and strong dividend payout records. 

What are the dividend Aristocrats?

Dividend aristocrats are companies that have increased their dividend payouts for 25 consecutive years. There are index funds that track these dividend aristocrats and these are good investments. The list of dividend aristocrats includes a wide variety of high-cap and stable growth stocks. Based on the dividend Aristocrats requirements, companies are added and removed yearly. 

What are requirements for a company to be listed in the dividend Aristocrats?

In order to be listed in the dividend aristocrats, a company has to meet certain requirements. The company must be a member of the S&P 500. Also, it has to maintain a total market cap of $3 billion. Importantly, it must have increased dividend payouts for at least 25 consecutive years. And, the company has to maintain $5 million daily share trade value for 3 months before it is accepted in the dividend aristocrats. 

As of January 2021, there are 65 dividend Aristocrats

Company	Ticker Symbol	Sector	5 year Average Payout ratio (%)	5 year Average Dividend yield (%)
3M Co	MMM	Industrials	62.30	2.85
A.O. Smith	AOS	Industrials	34.38	1.44
Abbott Laboratories	ABT	Health Care	153.29	1.76
Abbvie Inc	ABBV	Health Care	93	4.19
AFLAC Inc	AFL	Financials	22.87	2.31
Air Products & Chemicals Inc	APD	Materials	59.66	2.25
Albemarle Corp	ALB	Materials	49.27	1.49
Archer Daniels Midland Co	ADM	Consumer Staples	48.75	3.01
Amcor PLC	AMCR	Materials	84.24	3.96
AT&T Inc	T	Communications	84.02	5.92
Atmos Energy Corp	ATO	Utilities	45.79	2.17
Automatic Data Processing	ADP	Information Technology	62.67	2.07
Becton, Dickinson & Co	BDX	Health Care	111.56	1.33
Brown-Forman Corp	BF.B	Consumer Staples	36.04	1.2
Cardinal Health Inc	CAH	Health Care	46.60	3.27
Caterpillar Inc	CAT	Industrials	199	2.69
Chevron Corp	CVX	Energy	160.31	4.38
Chubb Ltd	CB	Financials	36.58	2.09
NextEra Energy Inc	NEE	Utilities	54.65	2.36
Cincinnati Financial Corp	CINF	Financials	79.06	2.62
Cintas Corp	CTAS	Materials	29.28	0.99
Clorox Co	CLX	Consumer Staples	58.96	2.42
Coca-Cola Co	KO	Consumer Staples	147.12	3.23
Colgate-Palmolive Co	CL	Consumer Staples	66.41	2.32
Consolidated Edison Inc	ED	Utilities	68.02	3.61
Dover Corp	DOV	Industrials	43.59	2.02
Ecolab Inc	ECL	Materials	36.99	1.04
Emerson Electric Co	EMR	Industrials	63.91	2.99
Essex Property Trust	ESS	Real Estate	111.99	2.91
Expeditors International of Washington Inc	EXPD	Industrials	29.45	1.30
Exxon Mobil Corp	XOM	Energy	127.63	5.05
Federal Realty Investment Trust	FRT	Real Estate	137.25	3.50
Franklin Resources Inc	BEN	Financials	45.46	3.13
General Dynamics Corp	GD	Industrials	33.17	2.13
Genuine Parts Co	GPC	Consumer discretionary	231.57	2.99
Hormel Foods Corp	HRL	Consumer Staples	44.30	1.87
Illinois Tool Works Inc	ITW	Industrials	52.73	2.18
IBM (International Business Machines Corp)	IBM	Information Technology	70.00	4.39
Johnson & Johnson	JNJ	Health Care	192.00	2.61
Kimberly-Clark Corp	KMB	Consumer Staples	70.18	3.16
Leggett & Platt Inc	LEG	Consumer Discretionary	67.15	3.43
Linde PLC	LIN	Materials	61.96	1.98
Lowe’s	LOW	Consumer Discretionary	41.98	1.71
McCormick & Co Inc	MKC	Consumer Staples	42.67	1.59
McDonald’s Corp	MCD	Consumer Discretionary	64.06	2.47
Medtronic PLC	MDT	Health Care	69.41	2.08
Nucor Corp	NUE	Materials	52.47	2.83
Pentair PLC	PNR	Industrials	45.08	2.03
People’s United Financial Inc	PBCT	Financials	67.73	4.45
PepsiCo Inc	PEP	Consumer Staples	70.95	2.86
PPG Industries Inc	PPG	Materials	42.62	1.62
Procter & Gamble Co	PG	Consumer Staples	92.42	2.86
Realty Income Corp	O	Real Estate	214.45	4.26
Roper Technologies Inc	ROP	Industrials	17.27	0.55
S&P Global Inc	SPGI	Financials	25.53	0.95
Sherwin-Williams Co	SHW	Materials	25.39	0.89
Stanley Black & Decker Inc	SWK	Industrials	41.85	1.78
Sysco Corp	SYY	Consumer Staples	79.48	2.36
T. Rowe Price Group Inc	TROW	Financials	39.64	2.61
Target Corp	TGT	Consumer Discretionary	43.37	2.94
VF Corp	VFC	Consumer Discretionary	77.02	2.49
W. W. Grainger Inc	GWW	Industrials	44.74	4.36
Walgreens Boots Alliance Inc	WBA	Consumer Staples	65.96	2.86
Walmart Inc	WMT	Consumer Staples	56.69	2.14
West Pharmaceutical Services Inc	WST	Health Care	22.41	0.47

What to look for when buying dividend stocks?

As mentioned above, dividend stocks are long term investments. When you pick dividend stocks to invest in, you should look for companies with excellent business models, stable revenue and strong dividend payout history. 

A healthy payout ratio

Payout ratio is the portion of earnings or net income which a company pays as dividend to stockholders. It is usually expressed in a percentage.  The other portion of net income which is not paid out, is left for the company’s investments to generate its future earnings. You can simply find a payout ratio of a stock from Morningstar or Yahoo finance 

For example: 

According to the Morningstar report, the payout ratio of Apple Inc (AAPL) in 2021 is 18.34 %. It indicates that Apple pays 18.34% as dividend to investors and keeps 81.66% for reinvesting, paying debts and retaining cash.  

What is a good payout ratio?

Payout ratio may vary depending on different industries. A good payout ratio is from 0 to 35%.  However, a very high payout ratio may not be a positive indicator for investors. According to Dividend.com, a payout ratio of approximately 36% is considered average. The average payout ratio varies by industry. The average payout ratio is 26% for healthcare, 29% for services, 35% for technology, 35% for financials, 65% for utilities, 21% for consumer goods, 39% for materials and 45% for conglomerates .  

Is a high dividend payout good?

A high dividend payout may not be valued by analysts and long term investors. Note that a firm needs to keep a healthy balance between dividend payouts and retained earnings. Besides paying dividends to stockholders, the company needs capital for its operation so that it continues to grow and generate future earnings. When a company aggressively pays high dividends,  it may result in a low working capital which is unsustainable for continued growth. 

A sustainable dividend payout history

As an investor, you not only look at a payout ratio, but you should also look at a company’s dividend payout history. A firm’s dividend payout history indicates its dividend sustainability. If a company pays a very high dividend in one year and significantly reduces the payout in subsequent years, there may be a potential weakness in the company‘s business stability. By reviewing the company‘s dividend payout records over the last 5-10 years, you would indicate if the company is able to grow revenue and payout dividends in a stable manner.

A steady revenue and earnings growth

Dividend payouts reward a company’s stockholders. As a long term investor, you should prioritize the company’s business stability. If a company grows very fast in one year and slows down in following years, it indicates that there is a potential weakness in the company‘s business model. By reviewing a company’s financial statements over years, you can see if the company is able to grow steadily.

Competitive advantages

Competitive advantages such as a better cost, a unique value, a strong brand name and so on allow a company to outperform its competitors and achieve a high margin. A company with a high competitive advantage can increase market share through its efficient productivity and scalable operations that result in a high profitability.  

 A good dividend yield

While a payout ratio tells how much a firm’s net earnings are paid as dividends to stockholders, a dividend yield indicates how much a company pays out in dividends relative to its stock price. 

For example, if a company pays an annual $5 dividend per share and its stock price is $50, then its dividend yield is 10%. 

Is a high dividend yield good?

Some investors may look for companies which offer high dividend yields. However, when a company has a steady increasing dividend yield, it may happen that the company dividend is increasing or its stock price is decreasing. So, a high dividend may not be an optimal attribute for some investors to look for a company to purchase. Some investors may look for high dividend yield companies with a long history, a stable and clear financial business. On the other hand, investors may be interested in companies which hold on to their earnings and reinvest their earnings to expand more. 

Questions and Answers – What to look for when buying dividend stocks?

1. How to calculate a dividend payout ratio?

You can calculate a dividend payout ratio by dividing a company’s annual dividends per 

common share by earning per share. 

You can easily find a company’s dividend payout ratio history over years from Morningstar or Yahoo finance. 

2. How to calculate a dividend yield?

You can calculate a dividend yield by dividing a company’s annual dividend per share by price per share. For example, if a company pays an annual $5 dividend per share and its stock price is $50, then its dividend yield is 10%.

You can also easily find a company’s dividend payout ratio history over years from Morningstar or Yahoo finance. 

3. Which one is better: a payout ratio vs dividend yield?

While a payout ratio tells you how much a firm’s net earnings are paid as dividends to stockholders, a dividend yield indicates how much a company pays out in dividends relative to its stock price. 

Based on the dividend yield calculation, an increase in annual dividend or a decline in stock price can cause a higher dividend yield.

Some investors may look for companies offering high dividend yields. However, a high dividend yield may not be an optimal attribute for some investors when they look for a company to purchase.  Some investors may be interested in companies which hold on to their earnings and reinvest their earnings to expand more. In contrast, other investors may look for high dividend yield companies with a long history, a stable and clear business model.