shares of companies that increase dividends every year
This article compares and contrasts dividend kings with dividend aristocrats.
also provides some action ideas. for creating a portfolio with the best companies on these lists.
Reading: Dividend aristocrats and kings
First, let’s look at a sample of these elite companies that pay dividends.
I chose these specific stocks because they are great ideas for any dividend portfolio…
Disclosure: At no cost to you, I may earn commissions on purchases made through links in this post.
best dividend kings
First, some major dividend kings include:
table 1: a select list of dividend kings
the best dividend aristocrats
Second, several of the major dividend aristocrats are:
table 2: a select list of dividend aristocrats
now with these examples in mind. Next, let’s compare and define kings vs aristocrats.
then by the time we’re done, you’ll know exactly what types of dividend stocks we’re talking about today.
so, before you go, check out all of our…
advice and tips for investing in dividends
Dividend Kings vs. Dividend Aristocrats: Key Points
kings and aristocrats are similar in that these companies are best known for increasing their dividend rate per share each year. therefore, rewarding shareholders with a growing stream of dividend income.
while the most significant difference between these 2 types of stocks is the number of consecutive years of dividend increases they have generated.
because aristocrats have paid increasing dividends for at least 25 years straight. while the king’s track record of dividend increases is at least 50 years.
also, by other criteria. Some but not all dividend kings are also dividend aristocrats.
Finally, raising dividends for at least 50 years in a row is very difficult. therefore, there tend to be fewer dividend kings than aristocrats.
Think of the relationship like this:
good. with those key points covered. Next, I’d like to dig a little deeper.
and do it by analyzing the definition of dividends kings vs aristocrats.
what are dividend aristocrats?
dividend aristocrats are very big in us. uu. publicly traded companies with highly liquid shares. They have increased their dividend rate per share each year. and has done so for at least 25 years in a row.
Specific criteria for being considered a Dividend Aristocrat include:
1) at least 25 consecutive years of payment of a higher dividend rate per share
2) the shares are publicly traded and are part of the s&p 500 stock market index
3) the company maintains a minimum market capitalization of $3 billion
4) shares average at least $5 million in daily trading value
now, the definition of dividend kings vs aristocrats…
what are dividend kings?
Dividend Kings are stocks of companies that have increased their dividend rate per share for at least 50 consecutive years.
See also: Top 392 SunPower Reviews
therefore, facing the aristocrats, these actions have only one obstacle to overcome. however, it is a very difficult obstacle.
why invest in dividend kings and dividend aristocrats?
for investors who want to build a dividend portfolio for regular income. doing adequate investment research is essential.
because it is important to know exactly what you are investing in and why.
because it’s your money. and it is possible to lose money on dividend stocks.
losses occur through carelessness. Have a short-term mindset. or just not knowing what you’re doing.
therefore, not all investors are experts in stock research. nor do they have time to become one.
then, investing in stocks with a long-term track record of increasing dividends. Much of the investment research and investment work can be reduced.
Because consistent dividend increases over time are often a sign of strong financial performance. and a company that has successfully stood the test of time, like kings and aristocrats.
As a result, they will most likely continue that strong financial performance well into the future.
Of course, there is this old saying: past performance is no guarantee of future results.
yes. that’s true. no guarantee.
But a strong long-term dividend record is a step in the right direction. feel positive about a company’s future prospects.
then for those who don’t want to select and keep individual actions, there is an alternative…
best etf for dividend kings and dividend aristocrats
because you can choose to invest in an exchange-traded fund (ETF) that buys and holds kings and aristocrats for you.
and i think the best is: proshares s&p 500 dividend aristocrats etf (nobl).
The fund aims to own all the best dividend aristocrats. and we already know that some dividend aristocrats are also dividend kings.
so, by definition, an investment in a single share of this etf. provides broad investment exposure to some of the best dividend growth stocks you can find.
what is the main disadvantage of focusing your investment on kings and aristocrats in this way? is the small proportion of expenses charged by the fund.
At the time of this article, the fee was only 0.35% of assets.
in other words, for every $1,000 you have invested in nobl. your fee will go up to $3.50 per year.
that fee is deducted from your dividends. before receiving them from the fund.
plus, keep your costs down by buying the stock without paying a commission. And you can do this using a stock trading app like webull.
for easy, fast and commission-free trading.
I have a webull account. and for what it’s worth, that’s what I do.
then let me have a discussion…
pros and cons: should you invest in dividend kings or aristocrats?
Because you may be wondering if investing in kings and aristocrats is right for you. And I think the best way to approach this is to examine the pros and cons of dividend growth stocks.
let’s do it now…
the advantages of investing in dividend kings and dividend aristocrats
First, dividend growth stocks provide a great form of passive income. In addition, they are known for their strong total investment returns when considering their capital gains potential.
Also, by reinvesting dividends, investors create a snowball effect. earning more dividends from your reinvested dividends.
Doing so is one of the best ways to increase your net worth. to build it faster.
Finally, if you need your dividends to finance your expenses. for example, generating dividend income for retirement purposes.
higher dividends as a result of dividend increases. provide a hedge against inflation.
thus allowing your dividend income to grow as much or more. as do your expenses.
Then is the other side of this debate…
the downsides of investing in dividend kings and dividend aristocrats
first, unfortunately dividends are not free money.
because by choosing to pay a dividend to shareholders. these companies that pay dividends incur an opportunity cost.
instead of investing the money paid in dividends in your business. which in turn should increase its stock price more quickly.
next, unlike stock appreciation. Income taxes are paid on dividends when they are received.
Instead, buy and hold stocks that are appreciating and don’t pay dividends. so under current tax law, income tax is not due until you sell your shares.
Also, many dividend stocks are grouped into certain sectors of the stock market.
For example, health care, consumer goods, and utilities. therefore, it can make it difficult to obtain adequate diversification. therefore, it increases the investment risk.
Finally, as I said before, past performance is no guarantee of future results.
just because a company paid increasing dividends for many years in a row. that doesn’t mean they can’t or won’t stop increasing it in the future.
or, in the worst case, reduce its dividend yield due to financial difficulties. because I have found that dividend suspensions, eliminations and reductions are some of the worst things for us dividend stock investors.
As a result, if you want help building your dividend portfolio. to avoid some of these potential pitfalls. For this, I recommend the Simple Investment Report & analysis platform.
simply investing provides all the latest dividend metrics for hundreds of dividend stocks. plus recommendations on the best stocks to buy. and when to buy them.
I have been using simply reverse for many years. and I love the value it brings to my dividend investing process.
good. I’m ready to end this. So let me have a few final thoughts…
Conclusions on Dividend Kings vs. Dividend Aristocrats
I have been building a passive income dividend portfolio for many years. and top dividend kings and top dividend aristocrats have been a big part of my strategy.
for your situation…
if you choose to select individual actions. Or expose yourself to dividend kings and aristocrats through an ETF.
Either way, I think they are an excellent choice for all or part of a diversified stock portfolio. if you prefer dividends aristocrats vs kings or vice versa.
more reading on dividends
Hungry for more dividends?
then be sure to check out this article on 3 of the best dividend kings for your money.
or this: for a stronger set of dividend stock options.
author biography, disclosure & amp; Disclaimer: Please join me (tom) as I try to achieve my goals, find my next place to live, and get the most for my money. But please understand that I am not a licensed investment advisor, financial advisor, real estate agent, or tax professional. I am a 50-something man, CPA, retired finance professional, and part-time business school professor with over 40 years of DIY investing experience. I’m only here because I enjoy sharing my findings and research on important topics. however, nothing posted on this site should be considered individual investment advice, financial guidance, or tax advice. because the sole purpose of this website is general information & entertainment. As a result, neither I nor Dividends Diversify can be held responsible for losses incurred by either party due to information posted on this blog. Finally, all content written is the property of Dividends Diversify LLC. unauthorized posting elsewhere is strictly prohibited.