While some companies cut their dividends and may occasion you to lose money, others like the Dividend Achievers will become real money makers in your portfolio. The Dividend Achievers list includes all the companies showing more than ten consecutive years with a dividend increase.
Investors are 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. The list contains over 250 companies to choose from and you certainly don’t want to wait another 15 years to identify Microsoft 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 which are 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 258 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 February 17, 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 since 2006, 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:
Some of my Favorite Achievers
If I had to list all of the dividend achievers that are in my portfolio, this article would go way too long. Therefore, I decided to share with you 4 of my favorite Achievers that are not yet part of the Dividend Aristocrats or Dividend Kings list.
Lazard’s power resides in its high-quality advisory segment. LAZ is surfing on the current market tailwind in M&A activities while gaining market share. LAZ has also developed strong expertise in real asset management, which is gaining popularity among investors. The market is concerned about all asset managers at this time. Assets under management aren’t growing as fast as they once did. Therefore, LAZ is lagging the overall stock market. Paying fees to have Lazard manage your money seems justified. They have strength from their presence in 170 countries, and Lazard aims to expand around the world. They have also built a strong brand in China for the past decade which bodes well for promoting that worldwide expansion in their operations.
Bank OZK (OZK)
This small bank that exhibits major growth has a strong reputation in the savings and loan business. As a classic S&L, OZK is well positioned to benefit from the U.S. economic tailwinds. I trust the man behind the bank. George Gleason II has been Chairman of the Board, Chief Executive Officer and President of OZK since 1979. He’s the beautiful mind behind this growth story, and I don’t think it will end anytime soon. Finally, its Real Estate Specialities Group is a loan growth machine. OZK is leaving the crowded loan activities to focus on Real Estate specialities. As the construction industry is healthy, RESG should have solid results going forward.
Hasbro now sells more toys than Mattel and this trend is not about to end soon. With its brands and partnerships in digital games, Hasbro has a solid business model. However, years of stunning growth may be behind them. After all, there is a limit to the number of Star Wars action figures and Frozen princesses you can sell in a year. Hasbro disbursed $500M in 2018 to purchase Power Rangers brand and $4B to acquire eOne in 2019. The company clearly intends to remain on the top of the toy kingdom in the US. Hasbro also counts on using eOne’s production and distribution abilities to boost its existing brands such as Transformers. The market is not yet convinced it was a good acquisition… let’s wait and see!
Microsoft is one of the oldest and newest tech companies at the same time. While it benefits from a strong core business model generating cash flow, management has proven its ability to develop other growth vectors. Its most recent success is called Azure, which is No. 2 in public cloud services. Azure is on a path for strong growth over the coming years. Finally, 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.
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!
Top stocks for 2020
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By being cautious and sticking to your investment process, you will find that some of those companies will not likely be hurt that much if a recession were to hit in 2020. Most importantly, you can and will find companies that will continue their dividend growth policy while their share price decreases temporarily. I’ve tested my methodology over the past decade. Dividend growth investing worked even in 2018 when the market was down double-digits.
Disclaimer: I hold LAZ, OZK, HAS, MSFT in my DSR portfolios.