Dividend Aristocrats vs Dividend Kings

Dividend stocks are companies which distribute a portion of their earnings to shareholders through the form of a dividend. But within the world of dividend stocks can be found two prestigious groups: dividend aristocrats and dividend kings. In this article, we will explain what it takes for stocks to be a part of these groups and provide lists for both dividend kings and aristocrats in 2023.

What Are the Dividend Aristocrats?

Dividend aristocrats are companies in the S&P 500 which have not only consistently paid a dividend for at least 25 consecutive years, but also increased the size of the payment each year.

Subject to a number of other requirements, together, these companies form the S&P 500 Dividend Aristocrats Index, from which they take their name.

Besides needing to have increased annual dividend payments for at least 25 consecutive years, dividend aristocrats must also:

• Be a constituent of the S&P 500 Index.
• Have a free float adjusted market capitalisation of at least $3 billion at each rebalancing of the index.
• Have an average daily traded value of at least $5 million for the three months prior to each rebalancing date.

Before we take a look at which companies are in the S&P 500 Dividend Aristocrats Index in 2023, let’s look at what a dividend king is.

What Are Dividend Kings?

Unlike dividend aristocrats, the dividend kings do not form an official stock index, nor do they need to meet the same additional requirements. In order for companies to claim the title of dividend king, they only need to fulfil one condition, but it’s a tough one.

Dividend kings must have paid and increased dividends each year for at least 50 consecutive years.

Naturally, this means that some dividend kings also qualify for the dividend aristocrats index. However, because, amongst other things, dividend kings do not need to be a constituent of the S&P 500, there are many companies which are dividend kings and not dividend aristocrats.

Dividend Aristocrats vs Dividend Kings

If you are considering investing in dividend stocks, then dividend aristocrats and dividend kings might be worth considering. An important factor to consider when choosing dividend stocks is the reliability of future dividend payments and, by definition, dividend aristocrats and dividend kings are the most historically reliable dividend payers out there.

Of course, no dividend is ever safe and it should be noted that companies can, and do, lose their status as dividend aristocrats and dividend kings. However, the fact that these companies can demonstrate consistently increasing dividend payments for such a length of time is impressive.

Just looking at dividend aristocrats, these companies have consistently paid and hiked dividend payments for 25 consecutive years, throughout all stages of the economic cycle, good and bad.

This includes the bursting of the dot com bubble at the beginning of the millennium, the financial crisis in 2008 and, most recently, the recession sparked by the Covid-19 pandemic and the tough operating conditions which followed. Dividend kings have persevered through all these conditions, plus four additional recessions.

The Dividend Aristocrats List 2023

At the time of writing, there are 67 constituents in the S&P 500 Dividend Aristocrats Index, all of which are highlighted in the table below.

The Dividend Kings List 2023

Given the challenging requirements involved, only an elite few bear the title of dividend king. Out of more than 5,000 stocks listed on the US stock exchanges, only 50 belong to this distinguished group.

The table below shows all the dividend kings in 2023, together with the number of consecutive years for which they have increased dividends.

Investing in Dividend Aristocrats and Kings with Admirals

With an investing account from Admirals, you can buy shares in many of the dividend kings and aristocrats highlighted in this article, as well as over 4,500 other companies and more than 200 Exchange-Traded Funds(ETFs). Click the banner below to register for an account today:

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.