This list includes all the companies showing more than ten consecutive years with a dividend increase.
The Dividend Achievers list is my favorite place to search for an additional dividend grower to add to my portfolio. Investors are often impressed by the Dividend Kings (50+ years with dividend increases) or The Dividend Aristocrats (25+ years), but I prefer to use the Dividend Achievers Index to search for my next potential investment. Including all stocks showing at least 10 consecutive years with a dividend increase, the list contains now 289 companies. You certainly don’t want to wait another 15 years to identify Microsoft (MSFT) as a dividend growth investment!
For those of you who did not know, The Dividend Achievers list was introduced by Moody’s back in 1979. Their investor service developed a model to determine the best dividend paying stocks. In 2012, Nasdaq bought the brand and broke down this index into many sub-categories.
Over the years, I’ve built my own model to identify the best dividend paying companies. The core of my investment strategy has been built around dividend growth. Overtime, I didn’t want to limit myself to a short list of companies and preferred to study the wider group of The Achievers. With the right combination of metrics, this list is probably the best starting point for building your own dividend growth portfolio or to at least find your next addition to that portfolio.
Download the 2020 Dividend Achievers List
Here is the complete list of all 289 achievers taken from the Invesco Dividend Achievers ETF (PFM). If you are looking for additional metrics, a more detailed list with additional values is available toward the end of this article.
The Achievers list has been updated as of August 4th, 2020.
Download the List with Added Metrics
After subscribing to our mailing list, you will receive an exclusive link to download the dividend achievers list which includes the following information:
- Company Name
- Dividend Yield
- 5 yr. Dividend growth
- 5 yr. Revenue growth
- 5 yr. EPS growth
- Payout ratio
- Cash Payout ratio
- P/E ratio
Financial data is updated weekly, but I suggest you download it every quarter after all companies have reported their earnings (and hopefully have announced dividend increases!).
Beware: Not All Achievers are Great Companies
There are myriads of investing studies showing that dividend growth stocks usually outperform the stock market. You can find plenty of evidence here and there. However, this doesn’t mean that because you pick a dividend grower for your portfolio, it will do well. In fact, when you compare the Invesco Dividend Achievers ETF against the SPDR S&P 500 (SPY) total return over the past 10 years, you will get a little surprise:
That’s right, the dividend achievers have underperformed the S&P 500. By allowing all companies with only 10 years of consecutive dividend increases in your index, you obviously allow some rotten apples to be in your basket as well.
Therefore, you need an investing methodology to screen the Dividend Achievers List.
How to Pick the Right Achievers for Your Portfolio
The advantage of the Achievers vs the Aristocrats and the Dividend Kings is its wide diversification. Having to select dividend growth stocks from amongst a list of over 250 candidates is a luxury. You’ll find companies offering a yield as low as 0.50% and as high as 10%. The list also covers all sectors.
As you can see, besides Real Estate and Basic Materials, the Dividend Achievers List includes a wide variety of securities. Since my focus is on total return and long-term growth, I will pick more companies in tech, industrials and consumer discretionary sectors. If you are looking to generate income, Health Care, Utilities, Communication Services and Financials (along with REITs) would possibly be better options.
The key to picking the best dividend growers from that long list is to cross reference your results with the dividend triangle (revenue growth, earnings growth and dividend growth).
My exclusive list includes 5-year annualized metrics for all revenue, EPS and dividend growth. This will allow you to select holdings showing a great combination of all three metrics. You can read more about the dividend triangle here.
You can download the Dividend Achievers List here:
My Top 5 Dividend Achievers
If I had to list all the dividend achievers that are in my portfolio, this article would go way too long. Therefore, I decided to share with you 5 of my favorite Achievers that are not yet part of the Dividend Aristocrats or Dividend Kings list.
The Visa IPO was right before the 2008 crash. The company offered a unique opportunity to investors as its stock traded around $11 in the middle of the storm. Today, the stock is getting close to $200 and it will continue to rise for at least a decade. The magic behind V is all about building the widest and most secure network to transfer money from one place to another. The company is a crucial partner with major financial institutions across the world. Everybody pays a commission for each transaction! As there is a clear trend toward electronic payments, Visa has already built its network to enjoy this strong tailwind. It’s ability to follow (and create) trends in money transfer will be crucial going forward.
I know, 0.60% is not a dividend yield; it’s not even pocket change! However, for those who were lucky enough to buy V for $40 nine years ago, its dividend yield is now 2% and its investment is showing a +500% value return. The dividend party will continue as both the payout and cash payout ratios are ridiculously low. Management maintained a 20% CAGR dividend growth over the past 5 years. V should continue to raise its dividends similarly in the coming decade.
NextEra Energy (NEE)
NEE makes the bulk of its income from Florida Power & Light (FPL). FPL should continue its steady growth. This state’s utility environment shows high allowed returns, fast and convenient regulators, along with the currently low customer rates which should allow for potential rate increases in the future. The company benefits from a territorial monopoly and enjoys economies of scale. NEE also benefits from their investments in clean and renewable energy through its wind and solar power plants. Those are the energy sources of the future and NEE has taken a step forward compared to many of its peers. NEE seems slightly undervalued, but the valuation model will work if NEE shows a high single-digit dividend growth rate.
NextEra has been increasing its dividend each year since 2010. Most utilities are known to distribute a good part of their earnings, but I would like to see a cash payout ratio under 100% going forward. At this time, the dividend payment is not at risk, and management expects strong dividend growth for the coming years as earnings should grow at a 6-8% rate. If you want a higher yield, you may want to look at its YieldCo: NextEra Energy Partners LP (NEP).
Lockheed Martin (LMT)
LMT now benefits from more generous international sales regulations. As geopolitical tensions continuously rise around the globe, Lockheed Martin is in a great position to offer its products to other countries. LMT counts on its F-35 fighter aircraft program and missile defense systems to grow in the coming years. The company enjoys a strong bond with the U.S. government and provides high-quality defense products. There is limited competition in this marketplace and LMT is filling its backlogs at a rapid pace. Unfortunately at this time, LMT is not trading at a cheap price.
The company has increased its dividends each year since 2004. It seems LMT is surfing through the perfect storm. As conflicts are rising around the globe, Congress has accepted Lockheed Martin to seek out international opportunities. This means the company could enlarge its international sales by doing business offshore. I expect LMT will not only grow its earnings in the upcoming years but its revenue as well. Shareholders can expect a high single-digit dividend growth rate.
Texas Instruments (TXN)
TXN with its market cap of over $100B has the size to benefit from economies of scale and stay ahead of the competition. The company has a leading market share in analog chips and digital signal processors. While there has not been much revenue growth over the past few years, the company’s future looks bright. TXN benefitted from a fragmented market to purchase many manufacturers at low prices and consolidate its position in the analog chip business. With the rise of the Internet of Things, its chips will have the possibility of being used in various other industries in the future. The company is also investing massively in R&D and its marketing sales team. This enables TXN to secure more customers and generate additional cross-selling opportunities as its sales team is out in the field to push revenue to higher levels.
TXN is not only a long-time dividend grower, but it is also a super-powered dividend stock. Over the past five years, management has increased its dividend at a 20% annualized rate. While its distribution rate has skyrocketed, both payout and cash payouts remain under control. Management uses about 50% of its cash flow for dividend payments, leaving plenty of resources for R&D and sales growth investments. The 2019 dividend increase of 17% demonstrates management’s confidence in the company’s future. You can expect lower increases in the future years, but TXN will remain a solid dividend payer with consistent yields.
Microsoft is one of the oldest and newest tech companies at the same time. While it benefits from a strong core business generating cash flow through a subscription-based model, management has proven its ability to develop other growth vectors as well. Its most recent success is called Azure, which is now No. 2 in public cloud services. Azure is on a path for strong growth over the coming years. Cloud services will also be part of the future of any serious business. Speaking of which, its strong relationship with corporate America opens the door for additional cross-selling opportunities as the cloud business expands. You will rarely see a company with such a strong dividend triangle.
Microsoft has successfully increased its dividend every year since 2004. Its yield used to be more attractive at near 3%, but the hype around the stock has transformed it into a low yielding stock of around 1%. Even a double-digit dividend growth rate wasn’t enough to compensate for the stock price surge since 2015. Microsoft shows a strong dividend triangle and you can expect high-single-digit dividend increases for years to come. Both payout and cash payout ratios are well under control.
A Decade of Growth is Not Everything
I can’t stress enough the importance of not depending on a single metric to invest in a company. I don’t believe there are 250+ amazing companies you should buy. The Dividend Achievers List is a very good start, but further analysis is mandatory before making any decisions to buy or sell.
Let me know if this list is helpful and how I can improve it for your effective use!
Don’t You Hate Not Knowing When to Buy? When to Sell?
Market fluctuations often create confusion that may leave you with the impression that you will lose all your savings. You then start reading as much as possible and then run the risk of overthinking your holdings. This is how you can suffer from “paralysis by analysis”. It doesn’t have to be this way.
My Recession-Proof Portfolio Workbook gives you the actionable tools you need to invest with discipline and to focus on your Financial Independence.
Disclaimer: I hold V, LMT, TXN, MSFT in my DSR portfolios.