A dividend is a sum of money paid regularly by a company to its shareholders out its profits. This generally happens each quarter but there are some outliers that will pay a yearly sum. Some of these stocks that offer dividends are better than others. Each year a list is created of the best dividend stocks, referred to as aristocrats. An aristocrat dividend is a stock that has increased their dividend payments each year for the at least the past 25 years. This shows a lot of profitability as well as financial strength. Here are the 5 best dividend aristocrats that make the list every year.
Johnson & Johnson
As one of the largest and most diversified healthcare companies in the world, it is no surprise that this company makes the list. Over half of their profits come from pharmaceutical sales, but they also have a decently sized consumer and medical devices portion of their business. They have increased their dividend by 8.8% per year over the last decade and by 7.1% over the last three years.
One of the most well-known brands in the world, PepsiCo owns a lot more than just the Pepsi beverage brand. In fact, they own many other common consumer brands like Gatorade, Frito-Lay, and Tropicana. This company’s largest 22 brands each generate at least $1 billion in annual sales every single year. Just in North America alone, PepsiCo is almost two times larger than the next-largest supplier in the food and beverage market.
Their dividend averages around 10.6% over the past decade. Each quarter shareholders can expect a dividend yield of roughly 2.8%.
Though not as common of a household name, Cintas is the largest provider of uniform rental services in the country. They make money by renting out uniforms for companies, then collecting them, washing them, and finally sending them back to be used again. Not the most exciting business model but they do control a vast majority of the market. They have over 8,000 local delivery routes, which makes them a hard opponent to overtake.
The company has increased its dividend for over 30 consecutive years and has one of the best growth profiles of all the aristocrats. Last year alone they boosted their dividend by nearly 25%. The average return per year is between 8-10%.
Founded in the earlier part of the 19th century, Colgate sells some of the most well-known consumer brands in the world. Their most famous brands include Colgate, Speed Stick, and Irish Spring. Impressively, Colgate controls 45% of the global market in toothpaste and is a close number two player in mouthwash and other oral and hygiene products.
Their payout ratio sits just below 60% and their annual dividend growth has dropped a little bit over the past three years. Even so, Colgate is a strong player with a 2.3% dividend yield and an annual return of between 8-10%.