Happily, we did not disappoint.
Our 10 selections -- limited to the universe of Dividend Aristocrats (an index of companies that raised dividends for 25 years or more) -- managed to handily outperform the S&P Dividend Aristocrats ETF (SDY).
- Each stock must have a liability-adjusted cash flow yield* (using five-year average cash flow) greater than the yield of a 10-year U.S. Treasury note.
- Each stock must have a return on invested capital greater than 10% (using five-year historical data).
- Each stock must have appreciated in value over the past decade.
- Each company must have a five-year average tax rate greater than 25%.
- Each company must have a "quick ratio" greater than 1.
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