Editor's pick: First published Feb. 22.
Dividend Aristocrats are a group of 50 stocks in the S&P 500 Index that have increased their dividend payments for at least 25 consecutive years, a sign of impressive profitability, financial strength, and management's confidence in the business.
These companies have collectively outperformed the S&P 500 Index with lower volatility and represent some of the best blue chip dividend stocks in the market.
You can view the complete list of dividend aristocrats by clicking here. Not all dividend aristocrats are created equal, and some are sure to fall off the list over the next decade as the world continues evolving and unexpected headwinds emerge.
Looking at each of the 50 dividend aristocrats on the list today here are the top 10 dividend stocks that could be the most successful companies over the next decade and beyond.
While no one can predict the future, these are likely the best dividend aristocrats to buy and hold for many years to come. Several are in this Top 20 Dividend Stocks portfolio.ECL data by YCharts
1. Ecolab (ECL)
Ecolab sells a wide range of sanitizing, cleaning, and water treatment systems that help customers in virtually every end market maintain clean environments, keep their food safe, and optimize their use of energy and water. Altogether, the company serves over 1 million customer locations in more than 170 countries.
Ecolab is one of the best dividend aristocrats to own for the long term because of its leading technology portfolio, sticky customer relationships, and large opportunity for growth. The company has over 25,000 employees that visit customer sites to replenish consumable products (which account for roughly 90% of Ecolab's total revenue) and cross-sell them new products and services. Altogether, Ecolab believes its addressable market is $100 billion in size and that customers are spending roughly $6 on addressable products for every dollar of business they currently have with Ecolab. We believe the company will continue taking share and deepening its customer relationships over the next 10 years.
While Ecolabl doesn't have the highest dividend yield, its dividend growth has been excellent. Management has increased the dividend by 14% per year over the last decade and by 17% per year over the last three years. Macro headwinds have slowed growth more recently, resulting in a 5% dividend increase earlier this year, but we expect this business to continue delivering at least high-single dividend growth longer term. With a payout ratio below 40% and excellent free cash flow generation, Ecolab will continue rewarding dividend growth investors.
ECL's stock has a dividend yield of 1.3% and trades at 24.7-times forward earnings estimates. Management believes the company can continue delivering 15% annual earnings growth longer term, which would make this one of the fastest-growing dividend aristocrats.