When most people first look into dividend growth stock options they stumble upon the dividend aristocrats, but there are other dividend “lists” for an investor to rely on.  Whether you are using them to start a screen, or attempt to figure out exactly what the mutual fund or ETF is purchasing (i.e. they are using the list as a screen) it is important to know and understand the differences.

Dividend Growth Indexes or Lists

Again, we can discuss how to use (or more appropriately, how I like to use them) below, but first we have to find them:

  • Dividend Aristocrats – Easily the most ‘famous’ within this world.  S&P defines  its index as a “measure [of] the performance S&P 500 companies that have increased dividends every year for the last 25 consecutive years. The Index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company.”  It is important to note that there are a ton of great companies that aren’t large enough to be included within the S&P500.
  • Dividend Champions – This is the list I use when screening for dividend growth stocks to purchase.  It has that same 25 consecutive year threshold (calculated a little differently to take into account stocks with irregular payouts), but the company does not have to be a part of the S&P.  This opens up the possibilities.
  • Dividend Contenders – This list is maintained by the same person that handles the dividend champions (and can be found in the same excel spreadsheet) but its members have increased their dividends between 10 and 24 years.
  • Dividend Kings – I am not sure if this is an “official” list, but DGI keeps track of those companies that have paid an increasing dividend for 50+ years!

There are other lists that have consistent dividend paying stocks, but the growth aspect is extremely important to slow down the insidiousness of inflation.

International Dividend Growth Indexes or Lists

I don’t think I currently need international exposure as my current dividend growth portfolio is no where near the size I’d like before I even think about allocating a piece of it to the international community.  Notwithstanding, I am sure people may want to diversify and here are some lists/indexes to check out:

  • Canadian Dividend Aristocrats – “S&P/TSX Canadian Dividend Aristocrats® measure the performance companies included in the S&P Canada BMI that have followed a policy of consistently increasing dividends every year for at least five years.”
  • Japanese Dividend Aristocrats – “The index is designed to measure the performance of the highest dividend yielding companies within the TOPIX universe that have followed a policy of increasing or maintaining stable dividends for at least 10 straight years.”

 

Am I missing any lists you may use for your dividend growth portfolio?

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