The Dividend Aristocrats measure the performance of S&P 500 constituents that have increased dividends every year for at least 25 consecutive years. The Dividend Aristocrats exhibit both capital growth and dividend income characteristics, unlike alternative income strategies that may be pure yield or pure capital-appreciation-oriented.
Dividends play an important role in generating a stock’s total return. Since 1926, dividends have accounted for approximately 31% of total returns for the S&P 500, while capital appreciation has accounted for 69%. Therefore, sustainable dividend income and the potential for capital appreciation are essential factors in total return expectations.
Beginners can use stable, rising dividends as a signal of confidence in the company’s prospects. At the same time, market participants consider such track records as a sign of corporate maturity and balance sheet strength.
Stock analysts focus on the business, revenue, earnings, and future earnings. However, dividends are paid out of earnings. Consistent dividend growth is a sure sign of a company’s financial health. Dividends can’t be restated or adjusted after they’re paid. Dividends don’t lie.
As of 2025, the Dividend Aristocrats constituents consisted of 69 securities, diversified across 10 sectors. The constituents have both growth and value characteristics. The composition of the Dividend Aristocrats contrasts with that of traditional dividend-oriented strategies, which exhibit a steep value bias and high exposure to the Financials and Utilities sectors.
When searching for dividend stocks, the Dividend Aristocrats often don’t have as high a yield as Financials and Utilities. To achieve diversification across more sectors and more growth potential, the Dividend Aristocrats usually offer a better starting screen for beginners to find promising dividend investment opportunities.
Another feature of the Dividend Aristocrats is their relative outperformance of the S&P 500 during market downturns. When the market is down or correcting, many investors seek safety in proven stocks with a history of lower volatility. Generally, Dividend Aristocrats will also go down in a market downturn, but not as much as the overall market.
While past performance is not a guarantee of future results, it can be helpful to look back to see which Dividend Aristocrats performed the best over the past 10 years: Fortis Inc. (FTS), Parker-Hannifin (PH), Walmart (WMT), AbbVie (ABBV), S&P Global (SPGI), W.W. Grainger (GWW), Brown & Brown (BRO), Nucor (NUE), Dover (DOV), and Linde plc (LIN).
Mark Notes
This Tips and Advice section does not provide company analysis. A complete list of all 69 Dividend Aristocrats can be searched online. Beginners seeking safer, less volatile stocks that they can research themselves may find these stocks ideal for their portfolio.