Dividend Aristocrats are an elite group of 65 S&P 500 stocks that have increased dividends for 25+ years consecutively. They are top-tier companies with the best dividend growth stocks and have a phenomenal history of outperforming the market.
To be a Dividend Aristocrat, the company needs to:
- Be a member of the S&P 500
- Have dividend increases for 25+ consecutive years
- Meet specific liquidity requirements
In addition, these companies all have durable competitive advantages and are considered 'recession-proof.' Any company that raises its dividends for more than 25 years can withstand economic downturns.
Here are five of those dividend aristocrats with decades-long streaks of dividend growth and yields exceeding 3%.
Coca-Cola owns the licenses to over 500 nonalcoholic brands and is the largest beverage company in the world. The company was founded in 1886 and has spread to over 200 countries around the globe. Coca-Cola has a market cap of $230 billion, which means it is a mega-cap stock. They sell about 2 billion servings of beverages each day and generate $36 billion in revenue annually.
Coca-Cola has a current dividend yield of 3.02% and pays an annual dividend of $1.68 per share. On July 1, 2021, their next quarterly dividend payment will get made to shareholders. Their dividend has grown for 59 consecutive years, and the average annual increase is 3.48%. 86.15% of Coca-Cola's earnings get paid out as dividends.
Coca-Cola Reports First Quarter 2021 Results
- Coca-Cola's net revenue increased by 5% to $9 billion, and their organic revenue increased by 6%.
- Including its impacting comparability, Coca-Cola's operating margin was 30.2% compared to 27.7% from the year before.
- The Comparable margin (non-GAAP) was 31% compared to 30.7% from the prior year.
- Coca-Cola's earnings per share (EPS) dropped by 19% to $0.52, while its comparable EPS (non-GAAP) increased 8% to $0.55.
- Their cash flow from operations was up $1.1 billion to $1.6 billion. This increase is driven by working capital initiatives, positive business performance, and gaining five extra days in the quarter.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust (FRT) is one of the oldest REITs in the US, focusing on the ownership, management, and development of high-quality retail properties. Interestingly, FRT has a fairly small diversified portfolio of properties compared to its peers, with around 100 names. The reason for this is that FRT focuses on quality over quantity.
FRT has the longest consecutive record in the REIT industry, with an increased yearly dividend rate for 53 straight years.
FRT has a dividend yield of 3.44%, paying an annual dividend of $4.24 per share. The company pays dividends to its shareholders quarterly and has been increasing its dividend yield for the last 49 consecutive years with an average of 2.14% annually. 93.81% of FRT's earnings get paid out as a dividends.
Federal Realty Investment Trust Reports First Quarter 2021 Results
- The company generated $1.17 in funds from operations accessible to common shareholders (FFO) per diluted share for the quarter compared to $1.50 in the first quarter of 2020.
- At the end of the quarter, the company had $780 million in cash on hand, $1 billion in undrawn revolving credit facility availability, and no public bonds maturing until 2023.
- For first-quarter 2021, net income available to common shareholders was $46.2 million, with earnings per diluted share of $0.60, compared to $52.8 million and $0.70, respectively, for first-quarter 2020.
- FRT signed leases for 506,307 square feet of comparable space at an average rent of $36.58 per square foot, resulting in a cash basis rollover growth of 9%.
Franklin Resources (BEN)
Franklin ranked 39th globally of the largest asset managers, with $622 billion in AUM at the end of the second quarter of 2020. Franklin Resources now handles the Franklin and Templeton mutual fund families.
Franklin Resources has had a difficult time in recent years as they were slow to adjust to the asset management industry's changing climate. Traditional mutual funds were caught off guard by the quick growth of exchange-traded funds and index investing.
Franklin Resources has a dividend yield of 3.30% and pays an annual dividend of $1.12 per share. They have increased the dividend for the past 40 years and currently increasing it by an average of 9.51% every year. Franklin Resources pays a dividend of 42.91% of its earnings.
Franklin Resources Reports First Quarter 2021 Results
- For the quarter ended December 31, 2020, Franklin Resources recorded a net income of $345.3 million, or $0.67 per diluted share, compared to $78.9 million, or $0.15 per diluted share, for the previous quarter.
- The operating income for the last quarter of 2020 was $409.1 million, up from $103.6 million the previous quarter and $372.9 million the year before.
- The quarter ended December 31, 2020, adjusted net income was $373.4 million, and adjusted diluted earnings per share was $0.73, compared to $291.0 million and $0.56 for the prior quarter.
- As of December 31, 2020, cash and cash equivalents and investments were $5.3 billion, up from $4.3 billion on September 30, 2020.
- On December 31, 2020, total shareholders' equity was $11.4 billion, up from $11.0 billion on September 30, 2020. On December 31, 2020, the company had 505.5 million shares of common stock outstanding, up from 495.1 million shares on September 30, 2020.
- During the quarter ended December 31, 2020, Franklin Resources repurchased 2.1 million shares of its common stock for a total cost of $45.6 million.
Realty Income (O)
Realty Income is one of the best REITs available to investors. For decades, the company has achieved outsized returns by investing in triple-net leased properties occupied by various tenants, including dollar stores, pharmacies, gyms, and many others.
Realty Income joined the Dividend Aristocrats list in 2020. Realty Income is recognized for delivering monthly rather than quarterly dividend payments. It has 605 consecutive monthly dividend payments and 4.4% compound annual dividend growth since going public in 1994, with a yield of 4.56% at its current share price.
They announced the 94th consecutive quarterly dividend increase in March 2021, marking the 110th increase in the dividend amount since their initial listing in 1994. As of March 31, 2021, the yearly dividend was $2.82 per share. For the first quarter of 2021, the number of monthly dividends paid per share grew 1.6 percent to $0.7035, compared to $0.6925 for the first quarter of 2020.
They distributed $260.7 million in common dividends to stockholders during the first quarter of 2021 or 81.9 percent of its AFFO of $318.2 million.
Since its first listing on the NYSE, Realty Income has increased the following:
- Real estate assets ranging in value from $451 million to $22 billion (at cost)
- Annual sales have increased from $49 million to $1.640 billion as of December 31, 2020
- Adjusted funds from operations (AFFO) increased by $39.2 million to $1.173 billion as of December 31, 2020
- Cash dividends range from $0.90 per share to $2.82 per share on an annualized basis
Realty Income Reports First Quarter 2021 Results
- Net income per share was $0.26
- Invested $1.03 billion in properties in development or growth, including $403.0 million in UK properties
- AFFO per share was $0.86
- A common stock public offering of 12,075,000 shares raised $670 million in net proceeds, including 1,575,000 shares purchased by the underwriters upon exercising their option to buy further shares.
Old Republic International (ORI)
Old Republic International (ORI) is primarily a commercial lines underwriter, serving the insurance needs of a diverse range of businesses, including many of America's most prestigious industrial and financial services firms. ORI is one of the top 50 shareholder-owned insurance companies in the United States.
Since 1942 (80 years), Old Republic has paid a cash dividend without interruption, and it has increased the annual cash dividend payout in each of the last 40 years.
Old Republic International pays a dividend of $0.88 per share annually, having a dividend yield of 3.37%. The company's dividend has increased for the past year, increasing by an average of 3.39% per year. ORI pays out a dividend of 39.29% of its earnings.
Old Republic International Reports First Quarter 2021 Results
- ORI reported quarterly earnings of $0.69 per share, compared to the previous year's $0.47 per share.
- Revenue of $1.98 billion, compared to last year's revenue of $1.65 billion. Over the previous four quarters, the company has surpassed consensus revenue projections three times.
- Since the start of the year, Old Republic shares have gained around 20.2%, compared to 10.1% for the S&P 500.
- The consolidated investment portfolio has a 72 percent allocation to fixed-maturity (bonds and notes) and short-term assets and a 28 percent allocation to equity securities (common stock) as of March 31, 2021.