- Dividend Aristocrats are considered to be elite dividend stocks, capable of providing consistent dividend growth.
- To earn this status, a company must be included in the S&P 500 index and demonstrate dividend increases for 25 consecutive years. The dividend aristocrats 2025 list includes companies that meet requirements relating to market capitalization, free float and trading volume, in addition to dividend payments.
- Such stocks often form the basis of a dividend investing strategy.
In this article, we will answer the question, ‘What is the Dividend Aristocrat?’ We will also discuss why these stocks are recommended for long-term investment and the advantages they offer to those interested in income investing.
Table of Contents
Definition and Core Requirements of Dividend Aristocrats
A common question from beginner investors is: ‘Who are the Dividend Aristocrats?’ To answer this, we will outline the qualification criteria that S&P 500 companies must meet:
- Market capitalization in free float must be $3 billion or more.
- For a period of at least 25 years consecutive, there should be a record of dividend increases.
- A minimum of $5 million in trading volume on a daily basis.
By ‘annual dividend increases’, we mean the growth in the amount paid per share by the company. This calculation does not take into account the current dividend yield, which is the ratio of the dividend amount to the current share price. There are no specific requirements regarding the dividend growth streak.
Here is a brief answer to the question: ‘What is dividend aristocrats?’ Dividend Aristocrats are publicly traded companies from an exclusive group of large-cap stocks with a high market capitalization that have maintained a streak of at least 25 consecutive years of dividend increases.
The Benefits of Dividend Aristocrats
Advantages to be gained by investors in a long-term wealth-building strategy:
- Steady income. The probability of dividend reductions for such stocks is lower than for the broad market.
- Inflation protection. Annual dividend increases ensure the growth of passive income.
- Lower volatility. During market downturns, aristocrats experience smaller losses in value. They demonstrate greater market resilience thanks to their reliable businesses and investor interest.
- Outperformance. Traditionally, risk-adjusted returns are higher. However, only in recent years has the index begun to lag behind the S&P 500, due to accelerated growth in technology companies.
Dividend aristocrat stocks make their owners less dependent on economic cycles. They generate passive income even during market downturns. During such periods, dividend reinvestment is particularly beneficial. This contributes to the compound growth of capital.
Historical Background and Development
The Dividend Aristocrats’ history has been tracked since 1989, and the eponymous index was created in 2005. The introduction of the concept of qualified dividends to the US tax code contributed to an investment strategy evolution towards a focus on regular income. This factor has also influenced the dividend policy of many companies, making shareholder profits one of their priorities.
Statistics show that, throughout most short- and medium-term economic cycles, the Dividend Aristocrats Index has outperformed the overall market performance. Such companies have demonstrated a strong financial crisis performance. These achievements are the result of a long-term track record and high-quality corporate governance. The index comprises companies that have held leading market positions for at least 100 years.
Industries and Sectors Represented
Dividend aristocrats have a fairly broad sector diversification.
| Sector | Allocation |
| Consumer staples | 23.03% |
| Industrials | 22.14% |
| Financials | 12.97% |
| Materials | 11.28% |
| Healthcare | 10.05% |
| Utilities | 5.93% |
| Consumer discretionary | 4.43% |
| Real estate | 4.23% |
| Energy | 2.95% |
| Technology | 2.91% |
The companies included in the index occupy leading market positions. Consequently, they have high financial stability and can maintain dividend payments, even during periods of declining profits. It is highly probable that most of them will retain their industry leadership positions in the coming years.
However, this sector diversification does not include emerging companies. To achieve a more effective sector allocation, an investor would need to add companies that do not have aristocrat status to the portfolio.
Dividend Kings vs. Dividend Aristocrats
Dividend Kings are publicly traded companies that have raised their dividends for at least 50 consecutive years. The only requirement to earn the title of king is a long-term dividend history. There is no need to meet the S&P 500 requirement.
This exclusive group comprises 55 companies. A common question is, ‘How many Dividend Aristocrats are there in the S&P 500?’ By 2025, this index will comprise 69 companies.
Another group of companies is known as dividend champions. To qualify, a company must have increased its dividends for 25 consecutive years. Currently, there are 137 companies with champion status.
In terms of a dividend growth comparison, neither group has a clear advantage over the other. However, particular Dividend Kings stocks have a dividend yield of over 6.5%. The most income-generating aristocrats have yields below 6%.
Dividend Aristocrats 2025: Current List and Top Examples
To illustrate the answer to the question, ‘What are dividend aristocrats?’, let’s provide some dividend aristocrat examples.
Target Corp. is a leader in the US retail industry and owns more than 2,000 stores. This has enabled it to increase its dividends for 58 consecutive years.
Dover Corp. offers a range of products, including equipment, components, consumables, software and digital products. DOV has paid growing dividends for 70 consecutive years.
Genuine Parts is the world’s largest supplier of automotive and industrial parts. Genuine Parts has increased its dividends every year for the last 69 years.
PepsiCo supplies its food and drink products to 200 countries worldwide. This diversification ensures stable revenue streams.
Coca-Cola is the world’s largest manufacturer and supplier of concentrates, syrups and non-alcoholic beverages.
Johnson & Johnson is a company operating in the healthcare sector. It produces pharmaceuticals, sanitary products and medical equipment.
Procter & Gamble is a leader in the global consumer staples market. The company has a continuous dividend streak of 135 years. It has also had 69 years of annual dividend increases.
All of these companies pay dividends and have done so for more than 50 years. They are household names and industry leaders. However, they are not among the top dividend yields in the stock market.
The table below shows the 69 companies included in the current Dividend Aristocrats list.
| Ticker | Name | Dividend Yield | Years of increase |
| O | Realty Income | 5.71% | 30 |
| AMCR | Amcor | 5.48% | 37 |
| BEN | Franklin Resources | 5.34% | 45 |
| SWK | Stanley Black & Decker | 4.96% | 58 |
| TROW | T. Rowe Price | 4.93% | 39 |
| FRT | Federal Realty | 4.86% | 58 |
| ES | Eversource Energy | 4.59% | 25 |
| TGT | Target | 4.57% | 54 |
| CVX | Chevron | 4.52% | 38 |
| HRL | Hormel Foods | 4.13% | 59 |
| PEP | PepsiCo | 4.09% | 53 |
| SJM | J.M. Smucker | 4.06% | 29 |
| CLX | Clorox | 4.03% | 48 |
| ESS | Essex Property Trust | 4.00% | 31 |
| KMB | Kimberly-Clark | 3.86% | 53 |
| KVUE | Kenvue* | 3.84% | 63 |
| ADM | Archer-Daniels-Midland | 3.79% | 52 |
| XOM | Exxon Mobil | 3.61% | 44 |
| ABBV | AbbVie* | 3.36% | 53 |
| ED | Consolidated Edison | 3.26% | 52 |
| NEE | NextEra Energy | 3.22% | 29 |
| GPC | Genuine Parts Company | 3.21% | 69 |
| MDT | Medtronic | 3.18% | 49 |
| BF.B | Brown-Forman | 3.15% | 52 |
| JNJ | Johnson & Johnson | 3.11% | 63 |
| KO | Coca-Cola | 2.96% | 63 |
| PG | Procter & Gamble | 2.81% | 69 |
| PPG | PPG Industries | 2.72% | 54 |
| SYY | Sysco | 2.70% | 56 |
| IBM | International Business Machines | 2.69% | 30 |
| MKC | McCormick & Company | 2.56% | 38 |
| APD | Air Products and Chemicals | 2.54% | 50 |
| CL | Colgate-Palmolive | 2.49% | 62 |
| ALB | Albemarle | 2.39% | 30 |
| CINF | Cincinnati Financial | 2.38% | 64 |
| ITW | Illinois Tool Works | 2.55% | 55 |
| AFL | Aflac | 2.37% | 41 |
| BDX | Becton, Dickinson and Company | 2.36% | 53 |
| MCD | McDonald’s | 2.34% | 50 |
| ATO | Atmos Energy | 2.23% | 43 |
| CHRW | C.H. Robinson | 2.18% | 27 |
| LOW | Lowe’s | 2.12% | 53 |
| ADP | Automatic Data Processing | 2.05% | 50 |
| FAST | Fastenal | 1.94% | 26 |
| AOS | A. O. Smith | 1.93% | 32 |
| GD | General Dynamics | 1.93% | 34 |
| ABT | Abbott Laboratories | 1.85% | 53 |
| NUE | Nucor | 1.59% | 52 |
| ERIE | Erie Indemnity Company | 1.56% | 35 |
| NDSN | Nordson | 1.49% | 62 |
| EMR | Emerson Electric | 1.49% | 68 |
| CB | Chubb | 1.45% | 33 |
| CAT | Caterpillar | 1.41% | 32 |
| EXPD | Expeditors International of Washington | 1.34% | 30 |
| CAH | Cardinal Health | 1.31% | 29 |
| LIN | Linde | 1.31% | 33 |
| CHD | Church & Dwight | 1.26% | 29 |
| DOV | Dover | 1.18% | 70 |
| FDS | FactSet | 1.12% | 25 |
| ECL | Ecolab | 1.00% | 39 |
| PNR | Pentair | 0.99% | 48 |
| GWW | W.W. Grainger | 0.97% | 54 |
| WMT | Walmart | 0.95% | 52 |
| SHW | Sherwin-Williams | 0.92% | 48 |
| CTAS | Cintas | 0.81% | 44 |
| SPGI | S&P Global | 0.70% | 52 |
| BRO | Brown & Brown | 0.65% | 32 |
| ROP | Roper Technologies | 0.61% | 33 |
| WST | West Pharmaceutical Services | 0.37% | 32 |
*The company’s key performance indicators were taken into account when making calculations, with certain business areas being emphasised as a result.
How to Invest in Dividend Aristocrats 2025
There are two investment options available when using a brokerage account. The first is to purchase individual stocks. This gives investors more control over their portfolio and the ability to select companies that align with their goals, such as those that offer the highest dividend income or have the best future prospects. Disadvantages include the need for sufficient knowledge to conduct stock research and the requirement for substantial capital to achieve diversification.
The second option is to buy dividend aristocrat ETFs, specifically the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). This gives the investor a diversified portfolio exposure of 69 companies, even with minimal investment. However, there are drawbacks: fund fees are expensive, and it is not possible to enhance portfolio efficiency.
The advantage of ETFs is that they reduce risk compared to purchasing individual stocks. Furthermore, it is easier to manage a portfolio of several ETFs than a portfolio composed of many stocks.
Dividend Aristocrat ETFs and Funds
Exchange-traded funds (ETFs) are investment funds whose shares can be bought and sold on the stock market. They most often track a specific index. The assets they hold represent the components of that index in the correct proportions. Therefore, buying even a single share in an ETF provides portfolio diversification.
Passive fund management reduces expense ratios. For example, ProShares NOBL has an expense ratio of just 0.35%. Another advantage is that investment costs are reduced; in the event of index rebalancing, investors do not need to buy or sell shares.
Diversification can be achieved through dividend aristocrat funds, such as the Vest S&P 500 Dividend Aristocrats Target Income Fund Investor Class. This mutual fund tracks the Cboe S&P 500® Dividend Aristocrats Target Income Index.
Key Considerations and Risks
Investing in aristocrats is not risk-free. Buying their shares involves investment risks, as it does with other companies.
Firstly, there is a risk of dividend cuts resulting from deteriorating business conditions or dividend policy changes. Aristocrats are companies that have demonstrated high dividend sustainability throughout economic cycles. However, past performance does not guarantee future results.
There is also market risk. Although many aristocrats belong to defensive and non-cyclical sectors, their stock prices can still decline. For instance, over a five-year period, Medtronic plc (MDT) shares decreased by 7.76%. Therefore, it is important to conduct thorough due diligence and avoid sector concentration in order to manage investment risks effectively.
Tax Implications and Planning
In order to increase the overall return on investments in dividend-paying stocks, tax planning is important. Most companies in the Aristocrat Index will consider their distributions to be qualified dividends if the investor meets the holding period requirements. In this case, dividend taxation will be applied at capital gains rates.
However, there are exceptions to this rule that should be considered when making investments. For instance, Realty Income (O) is a REIT. The dividends paid by this company are taxed as ordinary income. Tax rates range from 10% to 37% for this type of dividend, compared to 0% to 20% for qualified dividends.
Another way to improve dividend tax efficiency is to use tax-advantaged accounts, such as a 401(k).
Building a Dividend Aristocrat Portfolio
An investment strategy based on aristocrat stocks requires a flexible approach to asset allocation upon portfolio construction. When it comes to long-term investing, income generation cannot be the sole measure of success.
The diversification strategy should consider dividend yield and dividend growth potential, as well as overall returns and changes in portfolio value. Over the past few years, the Aristocrat Index has underperformed compared to growth companies.
Another important aspect is to develop a rebalancing strategy. Investors can use dividends or invest additional money to maintain asset proportions. Another option is to sell stocks that have increased in value.
The Bottom Line
Aristocrats stocks are suitable for an investment strategy focused on income generation and dividend growth. When evaluating dividend aristocrats 2025 opportunities, risk management and portfolio diversification are still important considerations.
Companies in the Dividend Aristocrats Index offer numerous advantages for long-term investing. However, before purchasing them, it is important to ensure that these holdings are suitable for your financial goals. For instance, stocks in the Dividend Aristocrats Index are not well-suited to intraday trading due to their low volatility.
FAQ
What are the dividend aristocrats?
This term usually refers to companies included in the S&P 500 index that have increased their dividends for more than 25 consecutive years. However, it can also be applied to companies included in the S&P High-Yield Dividend Aristocrats Index.
Is UPS a dividend aristocrat?
No. According to finance.yahoo.com, United Parcel Service Inc. has only increased its dividends for 22 consecutive years.
Is IBM a dividend aristocrat?
Yes, IBM is part of the S&P 500. The company meets the requirements for free float and trading volume, and, most importantly, has increased its dividends for 30 consecutive years.
Article Sources
- S&P Dow Jones Indices (2025). “S&P 500 Dividend Aristocrats: The Importance of Stable Dividend Income.” S&P Global Research, March 19, 2025. Comprehensive analysis of dividend aristocrat performance characteristics and risk-adjusted returns.
- Ned Davis Research (2012). “Dividend Growth Study: 1972-2012 Performance Analysis.” Referenced in academic studies showing dividend stocks returned 8.8% annually versus 1.6% for non-dividend stocks over the 40-year period.
- CEM Benchmarking (2024). “REIT Active Management Study.” Sponsored by Nareit, demonstrating that REIT active management consistently added net value to commercial real estate portfolios.
- Morningstar Inc. (2025). “Best Dividend Aristocrats Analysis.” Morningstar Direct, April 2025. Professional equity research covering undervalued dividend aristocrats with comprehensive fundamental analysis.
