Experience is everything and as an investor, I’ve always been interested in generating multiple streams of passive income. Naturally, dividend stocks, especially high-yielding ones, are alluring. That said, nothing in life is guaranteed, and dividends can get cut at a moment’s notice. Companies that pay dividends (without fail) for say 10, 15, or 20 years are likely “safer” than those simply with the highest yield. But then, we need to ask ourselves: what if the dividend doesn’t increase? As inflation erodes our buying power, it also erodes the power of the dividend. Dividend Aristocrats answer that question.
The Dividend Aristocrats are an elite group of 69 S&P 500 listed companies that have increased their dividend for at least each of the past 25 years. Let’s call them the “cream of the crop”. They, as a whole, are proven to have weathered pandemics, wars, and pretty much any economic downturn thrown at them- while still increasing their dividend year after year.
And that leads me to my next thought. If I’m hunting for yield, why not just look for the “Highest Yielding Dividend Aristocrats?” Not a terrible idea. The only issue with buying a high (or highest) yielding stock is that the yield could be high because the stock was hammered, perhaps due to a fundamental problem. In recent years, for example, Walgreens slashed their dividend at the beginning of 2024, as did 3M, VF Corp, and AT&T – all for different reasons.
So, how does one protect oneself from buying companies that could cut their dividend? While we can’t entirely eliminate the risk, but, if we combine analyst ratings and technical analysis into the hunt, now we have a clearer picture: a “buy” or higher consensus on Wall Street helps determine if a company is still worth investing in, while technical analysis tells us if Main Street believes in the narrative.
Today, I’m going to use what I’ve learned over the last 25 years as a trader to generate a list of the highest-yielding Dividend Aristocrats. While I usually cover three companies in my lists, today, I’ll take it a step further and cover five – and I’ll also list the rest as honorable mentions.
To get today’s list, I used Barchart’s Stock Screener to find companies on my Aristocrats watchlist, with the highest dividend yields. And for each, I’ll cover the consensus rating, and Barchart’s Opinion – an indication of the stock’s short-term direction.