In this article, we discuss top 10 dividend aristocrats according to dividend yields. You can skip our detailed analysis of dividend aristocrats and their previous performance, and go directly to read Top 5 Dividend Aristocrats by Yield: April 2024.
Dividend Aristocrats are special. Out of roughly 6,000 stocks listed on the NYSE and NASDAQ, only 67 companies have the privilege of being called dividend aristocrats. They are a select group of companies that have raised their dividend payouts for at least 25 consecutive years. These stocks belong to the S&P 500 and are represented through the S&P 500 Dividend Aristocrat Index. Due to their consistent dividend growth over the years, which mainly reflects their strong financial position, dividend aristocrats are highly favored by investors. In addition to this, these stocks have shown strong performance over the years, surpassing other asset classes. Since the index’s inception in 2005 through September 2023, the dividend aristocrats index delivered a total return of 10.35%, outperforming the broader market, which delivered a 9.54% return during this period.
While dividend aristocrats are mainly known for their dividend growth and stable equity gains, it is important to acknowledge that they showed lower volatility levels in achieving these returns. In one of our articles on the subject, we reported that from 2005 to September 2023, dividend aristocrats showed low volatility levels of 15.35%, compared with a slightly higher volatility rate of 16.31% for the S&P 500. This shows that these stocks do not experience regular fluctuations in their price movements and are comparatively resilient. By consistently raising their dividends for 25 consecutive years or more, these companies have shown the ability to reward shareholders with growing dividends during challenging periods, such as the financial crisis of 2007 and the pandemic of 2020.
From December 1989 to July 2023, the dividend aristocrats index performed better than the broader market 69.34% of the time during down markets, and 43.61% of the time when the market was up. This is to be noted that the dividend aristocrats index was launched in 2005 and all the data prior to that is back-tested hypothetical research. In addition to their performance in both bullish and bearish markets, dividend aristocrats outperformed the S&P 500 52.3% of the time during this timeframe.
Though investors tend to focus on only one aspect of dividend investing, be it dividend growth or dividend yield, research has shown that both these strategies can coexist. Dividend growth stocks with stable yields can offer reliable investment opportunities, where investors can benefit from regular income and the potential for long-term capital appreciation. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the best dividend aristocrat stocks popular among investors. However, in this article, we will focus on the highest yielding dividend aristocrats.
Top 10 Dividend Aristocrats by Yield: April 2024
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Our Methodology:
For this list, we looked at a group of 67 dividend aristocrat companies, which are known for raising dividends for 25 years or more. From this list, we chose 10 stocks with the highest dividend yields as of March 28 and arranged them in order from lowest to highest yield. We also measured hedge fund sentiment around each stock according to Insider Monkey’s database of 933 funds as of Q4 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
Kimberly-Clark Corporation (NYSE:KMB) is a Texas-based manufacturing company that specializes in consumer goods including personal care and hygiene products. In January this year, the company declared a 3.4% hike in its quarterly dividend to $1.22 per share. Through this increase, the company stretched its dividend growth streak to 52 years, which makes KMB one of the best dividend aristocrat stocks on our list. The stock has a dividend yield of 3.77%, as of March 30. Other dividend aristocrat stocks grabbing investors' attention include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
Kimberly-Clark Corporation (NYSE:KMB) reported a strong cash position in FY23 as it generated over $3.5 billion in operating cash flow, up from $2.7 billion in 2022. During the year, the company returned $1.8 billion to shareholders through dividends.
The number of hedge funds tracked by Insider Monkey owning stakes in Kimberly-Clark Corporation (NYSE:KMB) grew to 36 in Q4 2023, from 31 in the previous quarter. These stakes have a total value of over $1 billion. With over 1.1 million shares, Millennium Management was the company's leading stakeholder in Q4.
Essex Property Trust, Inc. (NYSE:ESS) is a real estate investment trust company that manages and acquires multifamily residential properties. The company currently pays a quarterly dividend of $2.45 per share, having raised it by 6.1% in February this year. This was the company's 29th consecutive year of dividend growth, which makes ESS one of the best dividend aristocrat stocks. As of March 30, the stock has a dividend yield of 4%.
As of the close of Q4 2023, 22 hedge funds in Insider Monkey's database reported having stakes in Essex Property Trust, Inc. (NYSE:ESS), compared with 21 in the previous quarter. The collective value of these stakes is over $156.5 million. Among these hedge funds, AEW Capital Management was the company's leading stakeholder in Q4.
T. Rowe Price Group, Inc. (NASDAQ:TROW) is next on our list of the best dividend aristocrat stocks with high yields. The American investment management firm reported a 4% rise in its preliminary assets under management to $1.51 trillion in February, compared with $1.4 trillion in the previous month. The company currently offers a quarterly dividend of $1.24 per share and has a dividend yield of 4.07%, as of March 30. In January this year, the company achieved its 38th consecutive annual dividend growth streak.
T. Rowe Price Group, Inc. (NASDAQ:TROW) ended the fourth quarter with 32 hedge fund positions, up from 24 in the previous quarter, as per Insider Monkey's database. The stakes held by these hedge funds have a total worth of over $637.5 million. With over 1.7 million shares, Fisher Asset Management was the company's leading stakeholder in Q4.
Chevron Corporation (NYSE:CVX) is an American integrated energy company that is engaged in various aspects of the oil and gas industries. The company's cash generation has always remained very strong. In its recent quarterly earnings, the company announced that it generated over $110 billion in operating cash flow over the past three years. Moreover, its free cash flow for the period amounted to over $80 billion. In FY23, the company returned $11.3 billion to shareholders through dividends, which makes CVX one of the best dividend aristocrat stocks on our list.
Chevron Corporation (NYSE:CVX) currently offers a per-share dividend of $1.63 every quarter and has a dividend yield of 4.13%, as of March 30. The company holds an impressive 37-year track record of consistent dividend growth.
According to Insider Monkey's database of Q4 2023, 71 hedge funds held stakes in Chevron Corporation (NYSE:CVX), compared with 72 in the preceding quarter. These stakes have a total value of more than $21.6 billion. Among these hedge funds, Warren Buffett's Berkshire Hathaway was the company's leading stakeholder in Q4.
Carillon Tower Advisers mentioned Chevron Corporation (NYSE:CVX) in its Q4 2023 investor letter. Here is what the firm has to say:
“Chevron Corporation (NYSE:CVX) traded lower, along with oil prices, and issued a disappointing earnings announcement due to overseas refining losses. Separately, the company announced an agreement to buy another energy company with operations offshore of Guyana, as well as in North Dakota, the Gulf of Mexico, and the Gulf of Thailand. This is a strategic acquisition for very little takeout premium.”
Federal Realty Investment Trust (NYSE:FRT) ranks sixth on our list of the best dividend aristocrat stocks. The real estate investment trust company currently offers a quarterly dividend of $1.09 per share and has a dividend yield of 4.28%, as of March 30. The company has been growing its dividends for the past 56 consecutive years. The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some other popular dividend aristocrats favored by investors and analysts.
In the fourth quarter of 2023, Federal Realty Investment Trust (NYSE:FRT) reported revenue of $291.8 million, which showed a 4.2% growth from the same period last year. The company ended FY23 with over $250.8 million available in cash and cash equivalents, up from $85.5 million in 2022.
Insider Monkey's database of Q4 2023 indicated that 22 hedge funds held stakes in Federal Realty Investment Trust (NYSE:FRT), growing from 15 in the previous quarter. These stakes are collectively valued at more than $370.8 million.
