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Dividend Yield vs Dividend Growth: Which Strategy Wins?
Compare high-yield and dividend growth investing strategies to find which approach best fits your financial goals and timeline.
Jan 14, 2025 Read More
Learn about Dividend Aristocrats - the 69 S&P 500 companies that have increased dividends for 25+ consecutive years - and how to invest in them.
In the world of dividend investing, few designations carry as much prestige as "Dividend Aristocrat." These elite companies represent the gold standard of dividend reliability, having increased their payouts for at least 25 consecutive years while maintaining membership in the S&P 500.
Looking for the complete list? View all 69 Dividend Aristocrats →
To earn the Dividend Aristocrat title, a company must meet strict criteria set by S&P Dow Jones Indices:
This is no easy feat. Through recessions, market crashes, and industry disruptions, these companies have maintained their commitment to shareholders by raising dividends year after year.
| Metric | Value |
|---|---|
| Total Companies | 69 |
| Average Dividend Yield | ~2.5% |
| Sectors Represented | 10 |
| Longest Streak | Emerson Electric (69 years) |
As of January 2025, three companies joined the Aristocrats: FactSet Research Systems (FDS), Erie Indemnity (ERIE), and Eversource Energy (ES). Notable removals include Walgreens Boots Alliance (WBA), which cut its dividend in 2024 after 48 years of increases.
The Aristocrat track record tells us something important: these companies have durable business models and disciplined management teams.
Consider what a 25+ year dividend growth streak means. A company earning Aristocrat status in 2025 has successfully increased dividends through:
The commitment to growing dividends creates discipline. Management must allocate capital wisely, maintain healthy balance sheets, and focus on long-term value creation.
Companies that prioritize dividend growth tend to:
The largest sector representation, including household names:
Manufacturing and service giants:
Pharmaceutical and medical device leaders:
Insurance and financial services:
View the complete list of all 69 Dividend Aristocrats →
If 25 years sounds impressive, consider the Dividend Kings - companies that have increased dividends for 50 or more consecutive years. Unlike Aristocrats, Kings don't need to be S&P 500 members.
| Company | Ticker | Consecutive Years |
|---|---|---|
| American States Water | AWR | 70 |
| Emerson Electric | EMR | 69 |
| Northwest Natural | NWN | 69 |
| Dover Corporation | DOV | 68 |
| Procter & Gamble | PG | 68 |
These companies have proven their staying power across multiple generations of leadership and economic cycles.
You have several options for adding Aristocrats to your portfolio:
Buy shares of specific Dividend Aristocrats directly through a brokerage account.
Pros:
Cons:
The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) tracks an equal-weighted index of all Dividend Aristocrats.
Key Facts:
Pros:
Cons:
Several ETFs focus on dividend growth without the strict Aristocrat requirements:
| ETF | Ticker | Focus | Expense Ratio |
|---|---|---|---|
| Vanguard Dividend Appreciation | VIG | 10+ years of growth | 0.06% |
| Schwab U.S. Dividend Equity | SCHD | Quality + dividend growth | 0.06% |
| iShares Core Dividend Growth | DGRO | 5+ years of growth | 0.08% |
These cast a wider net while still emphasizing dividend growth.
If you're selecting individual Aristocrats, consider these factors:
Not all Aristocrats grow dividends at the same pace. Look at the 5-year and 10-year dividend growth rates:
Even Aristocrats can overextend themselves. A payout ratio above 80% leaves little room for continued growth or handling business challenges. Look for ratios between 40-70% for most sectors.
| If You Need... | Focus On... | Examples |
|---|---|---|
| Income now | Higher yields (3%+) | Realty Income, AbbVie, Amcor |
| Future growth | Lower yields + faster growth | Lowe's, S&P Global, Cintas |
| Balance | Moderate yield + growth | PepsiCo, Johnson & Johnson |
An excellent company can be a poor investment if you pay too much. Compare:
While Aristocrats are generally lower-risk investments, they're not risk-free:
Companies can lose Aristocrat status by:
When a company loses Aristocrat status, its stock often drops as index funds sell their positions.
The Aristocrat universe is concentrated in certain sectors:
Technology companies are underrepresented because the sector is relatively young, and many tech companies prefer share buybacks over dividends.
Fixed income from dividends loses purchasing power over time. That's why dividend growth matters - you need increases that outpace inflation.
Here's a sample approach to building an Aristocrat-focused portfolio:
Ready to add Dividend Aristocrats to your portfolio? Here's your action plan:
Use our dividend calculator to project your income growth from a Dividend Aristocrats portfolio.
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