25 years is a long time. It’s worth paying attention when a company does something consistently for that long. Especially when we consider how everyone talks about “getting started early” when investing, but other than answering the question with circular reasoning (start early so you have more time), most people can’t tell you why starting early is important (compounding).
That line of thinking takes us into what we measure, but first, let's understand a good place to find some of your first investments: the dividend aristocrats.
The most important thing
To be extra clear, these companies increase their dividend annually.
That means, if you own these companies, you get a raise every year.
It doesn't get simpler. I could stop this post here and have told.you everything I think is worth considering, but I realize you probably have a few more questions.
Answers to your questions
In fact, readers often wish I’d included the list of dividend aristocrats in my book. The thing is the list changes. There are 68 dividend aristocrats at the moment (July '24).
Where do you find out about these companies? How can you read more?
Do what I do. Head over to Sure Dividend for the current list of dividend aristocrats. Even if you don't subscribe, you can get tons of information, including their annual review of each dividend aristocrat and a spreadsheet that contains lots of information about each company. There's no page better for having one single place to track the dividend aristocrats.
Feel free to leave a comment below (or send me a private message via the red bubble in the lower right corner of your browser) if you have further questions, but it’s really simple. Increasing dividends help you beat inflation and grow your dividend paycheck simply by holding over time.
Companies that have a process that has worked to help them raise dividends for decades are likely to continue to produce future raises. The common refrain of “past performance is not an indicator of future results”… is more about ass-covering than human behavior. If a company has done something for decades, it’s more likely to keep doing it (than if they didn’t have such a long track record of the same behavior). Human behavior matters.
That said, one company, in particular, that is not a dividend aristocrat has also talked about consistent dividend increases. On Apple’s quarterly conference call Tim Cook has mentioned that they plan to increase the dividend regularly when they update investors on their capital management plans each April. You don’t need a crystal ball, just listen to the CEO himself tell you this.
Finally, if you're curious, there is a subclass of dividend aristocrats known as the dividend kings that have 50+ years of annual dividend increases!
