Buy-and-hold dividend growth investors know something that less experienced yield-hunters don't: It pays to be patient when you're investing for income.
The best dividend stocks – companies that raise their payouts like clockwork decade after decade – can produce superior total returns (price plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with.
For one thing, regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and that unimpressive 1% yield you received on your initial investment can hit double digits one day.
And, as always, let's not forget the magic of compounding. As Ben Franklin famously said, "Money makes money. And the money that money makes, makes money."
Companies with long histories of annual dividend growth also offer some peace of mind. When a firm manages to raise its dividend year after year, through recession, war, market crashes and more, it's making a powerful statement about both its financial resilience and its commitment to shareholders.
Enter the S&P 500 Dividend Aristocrats.
The Dividend Aristocrats are companies in the S&P 500 Index that have raised their payouts for at least 25 consecutive years. This list of the S&P 500's best dividend stocks is a mix of household names and more obscure firms, but they all play key roles in the American economy. And although they're scattered across pretty much every sector of the market, they do all share one thing in common: a commitment to reliable and long-term dividend growth.
S&P Dow Jones Indices rebalances the S&P 500 Dividend Aristocrats every January, and it made a few tweaks for 2022.
The lone deletion is AT&T (T). That's because the telco's dual divestitures of DirecTV and WarnerMedia – along with the cash those assets generate – brought its dividend growth streak to an end in 2021.
On the other side of the ledger, the Aristocrats have two additions: Brown & Brown (BRO), a member of the financials sector; and consumer-staples giant Church & Dwight (CHD). Annual changes to the Aristocrats take effect Feb. 1.
Here are the 66 S&P 500 Dividend Aristocrats. The following names have been among the best dividend stocks for income growth over the past few decades, and they're a great place to start if you're looking to add dividend battleships to your long-term portfolios.
