- Dividend Aristocrats are S&P 500 stocks that have consistently paid an increasing dividend for at least 25 years.
- They’re often used as part of a defensive equity strategy that seeks to provide lower-risk returns.
- Investors frequently add Dividend Aristocrats to their portfolios by buying funds that hold them.
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If you’re an income investor, your portfolio probably includes dividend-paying stocks representing companies that show stable earnings, solid fundamentals, and a strong history of growth and profit. No stock demonstrates those characteristics more consistently than an S&P 500 Dividend Aristocrat.
“Companies that have been able to consistently grow their dividend have a tendency to be high quality compared to those of the broader market in terms of earnings quality and leverage,” says Tim Bain, president and chief investment officer at Spark Asset Management. “A company’s ability to reliably increase its dividend for years, or even decades, can be an indication of its financial strength or discipline.”
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