"Dividend Aristocrat" Royalty Continu...
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John Murphy
“Dividend Aristocrat” Royalty Continues to Outperform
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Many previous articles on this site have recommended Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), and Wal-Mart (NYSE: WMT) (chart below).  These are excellent investments for many different reasons.  The fact that Warren Buffett is a major shareholder all of three is certainly compelling.  So is the fact that all are royalty when it comes to those stocks that are “Dividend Aristocrats.”

A Dividend Aristocrat is a publicly traded company that has increased the amount of its dividend annually for at least the past 25 years.

To pay a dividend is a show of strength for any entity.  To increase it is even more impressive.  Raising it every year for over a quarter of a century makes it a very alluring investment, to state the obvious.

It is a sign of that company being a market leader.

That is certainly the case with Coca-Cola, ExxonMobil, and Wal-Mart.  All are leaders in their sector.  That is due to the strength of the business organization of each.  That strength is shown through the dividend structure of each.

Coca-Cola, ExxonMobil, and Wal-Mart all pay higher dividends than the average of just under 2 percent for a member of the Standard & Poor’s 500 Index (NYSE: SPY).

The dividend yield for Coca-Cola is 2.93 percent.  For Wal-Mart, it is 2.52 percent.  The dividend yield for ExxonMobil is 2.64 percent.

Income investors should love that all pay more than than the average stock on the Standard & Poor’s 500 Index.

What should be appreciated even more is the history of raising the dividend amount each year.  That means that shareholders get a raise just for owning the stock.  As the dividend income component has provided over 40 percent of the historic return for an equity, that is an important feature.  For long term investors, the royalty of Dividend Aristocrats, Coca-Cola, ExxonMobil and Wal-Mart, have proven to be worthy of throne.


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