Lowe’s raised its dividend at an annual fee of about 17% from 2015 by way of 2020. Right here, a Lowe’s in Farmingdale, N.Y., final 12 months. Bruce Bennett/Getty Pictures Textual content dimension The S&P 500 Dividend Aristocrats are sometimes held up as exemplars of dividend consistency. The 65 members of this group have earned
Textual content dimension
The S&P 500 Dividend Aristocrats are sometimes held up as exemplars of dividend consistency. The 65 members of this group have earned that popularity by paying out a better dividend for a minimum of 25 straight years.
A few of these firms are extra like turtles than hares, nonetheless, in terms of dividend development. Working example: AT&T (ticker: T), whose 6.8% yield makes it standard with some earnings traders, grew its payout at a 2% annual clip from 2015 by way of 2020.
Barron’s, nonetheless, wished to zero in on the Aristocrats with the fastest-growing dividends over that point. With the assistance of FactSet knowledge, we landed on these 5 firms:
Illinois Instrument Works
(ITW), and S&P International (SPGI).
Annualized dividend development charges are primarily based on evaluating payouts in 2015 and 2020. YTD return consists of capital appreciation and dividends. Knowledge as of April 5.
Sources: Merely Protected Dividends, FactSet
Topping the record is
whose merchandise embody fuel and electrical water heaters, with a five-year annual dividend development fee of about 21%. The inventory, which as of April 5 had returned about 25% this 12 months, yields 1.5%. The corporate mentioned in a current report that it has paid money dividends on its widespread inventory yearly since 1940.
Traders in pharmaceutical agency
have had the most effective of two worlds—robust dividend development and a pleasant yield, most just lately 4.9%. The inventory, nonetheless, is flattish this 12 months.
The corporate, whose portfolio consists of blockbuster prescription drug Humira, has boosted its dividend at a five-year annual clip of 18%. Final fall, it declared a quarterly payout of $1.30 a share, up 10% from $1.18 beforehand.
Gross sales of Humira, which is used to deal with rheumatoid arthritis and different situations, totaled about $20 billion final 12 months, in line with FactSet. For a few years, a priority about AbbVie was that it was too dependent Humira, making it susceptible to competitors. Nonetheless, in 2019 AbbVie closed a $63 billion acquisition of Allergan in a transfer to broaden its portfolio.
Shut behind AbbVie on the record is Lowe’s, which operates a big chain of home-improvement shops—a subsector that has held up fairly effectively in the course of the pandemic as many individuals proceed to work remotely and give attention to their houses.
The retailer’s inventory yields a so-so 1.2%, versus about 1.4% for the S&P 500, however it raised its dividend at an annual fee of about 17% from 2015 by way of 2020. The inventory has returned about 21% in 2021.
In August of final 12 months, the retailer declared a quarterly dividend of 60 cents a share, up by 5 cents, or 9%. In its most up-to-date fiscal 12 months, which resulted in late January, the corporate’s free money stream totaled about $9.3 billion, helped by robust working efficiency, and it paid out about $1.7 billion in dividends. It additionally purchased again about $5 billion of its inventory.
Manufacturing agency Illinois Instrument Works additionally made the record, owing to five-year an annual dividend development fee of round 17%. The inventory, which gives a stable yield of two.1%, has returned about 10% this 12 months.
The corporate final August declared a quarterly dividend of $114 a share, up 7% from $1.07.
Rounding out the record is S&P International, whose merchandise embody securities rankings, benchmarks, knowledge, and analytics. The inventory, which yields 0.8%, sports activities an annual five-year dividend development fee of about 15%.
Aside from AbbVie, these shares present that fast-growing dividend shares usually include decrease yields, even among the many S&P 500 Dividend Aristocrats.
Write to Lawrence C. Strauss at [email protected]