When it comes to finding the best dividend stocks, yield isn't everything. If you're an income investor in it for the long haul, you know that steadily rising payouts are a vital factor, too.
For one, dividend increases lift the yield on an investor's original cost basis, meaning today's 1% yield might be much more in the future. They're also indicative of a firm's ability to withstand the ups and downs of the economy, as well as the stock market.
Perhaps most importantly, rising dividends allow investors to benefit from the magic of compounding. As Ben Franklin famously said, "Money makes money. And the money that money makes, makes money."
Enter the Dividend Aristocrats.
The Dividend Aristocrats are companies in the S&P 500 Index that have improved their annual payouts every year for at least 25 consecutive years. It's a mix of household names as well as companies with less name recognition that nonetheless play an outsize role in the American economy, even if it's mostly behind the scenes. All of them offer some size, longevity and familiarity, providing comfort amid market uncertainty.
Even the country's best dividend stocks haven't been 100% immune to the COVID-19 downturn, however. One Aristocrat, retailer Ross Stores (ROST), was dropped from the index after being forced to suspend its dividend in May. A handful of other Aristocrats haven't raised their payouts on schedule, but could still remain in the index as long as they maintain their dividend levels this year and raise again in 2021.
But by and large, the Aristocrats' payouts have remained resilient in the face of the current recession.
Here are the current 65 Dividend Aristocrats – including a few new faces that joined in January 2020, and three more recent additions courtesy of some corporate slicing and dicing. These have been among the best dividend stocks for income growth over the past few decades, and they're a great place to start if you're looking to add new dividend holdings to your long-term portfolios.