2013 Returns for the Dividend Aristocrats

As we stand at the beginning of 2014, it’s useful to take a look back at the previous year and see how the 54 Dividend Aristocrat (DA) stocks did in 2013.  A couple of quick facts:

  • 53 of the 54 Dividend Aristocrats ended up for the year
  • 28 of the 54 Dividend Aristocrats beat the S&P 500 index
  • 32 of them now have a higher dividend yield than the S&P 500 index
  • Of course, all of the 54 Dividend Aristocrats increased their payouts this year; 4 of them increased their dividends by more than 25% from 2012.

53 of the 54 Dividend Aristocrats ended up for the year

The only DA that ended down for the year was HCP, Inc (HCP), which was down by 16.9%.  After peaking in May, HCP trended down for the rest of the year.  In fact, it set a 52-week low for 2013 on December 12th, and ended the year within 2.5% of that low.

28 of the 54 Dividend Aristocrats Beat the S&P 500 Index

The S&P 500 index was up 29.6% for the year.  This beat 28 of the DAs.

The best performing DA last year was V.F Corporation (VFC), which returned 68.4%.  Three other DAs returned more than 60%: Cardinal Health (CAH, 65.3%), Archer Daniels Midland Company (ADM, 61.2% return), and Pentair (PNR, 60.7%).

32 of the 54 Dividend Aristocrats Now Have a Higher Dividend Yield than the S&P 500 Index

I’ll use SPY, the ETF corresponding to the S&P 500, as a proxy for the S&P 500.  SPY’s dividend yield is 2.05%.  The dividend yields of the DAs range from CR Bard’s (BCR) 0.63% to HCP’s 5.78%.  Of the 32 DAs with higher yields, 9 are in the Consumer Goods category.  These include companies that market directly to the consumer such as PepsiCo (PEP, 2.74% yield), Coca Cola (KO, 2.71%), Colgate Palmolive (CL, 2.09%), Clorox (CLX, 3.06%), and Procter & Gamble (PG, 2.96%).  Other companies paying more that the S&P 500 are retailers Walmart (WMT, 2.39%) and Target (TGT, 2.72%).

Of course, dividend yield is not the only criteria for selecting a stock.  HCP’s dividend yield of 5.78% is little comfort when the stock is down by over 15% for the year.  No doubt that HCP’s yield is inflated due to the poor performance of the stock.

4 of the 54 Dividend Aristocrats Increased Their Dividends by More Than 25%

Less than 1 in 10 DAs had a year-over-year increase in dividend payout of 25%.  These four companies are:

Abbott Laboratories’ (ABT) quarterly payout increased by 57%.  The medical equipment company’s situation is unique as they spun off AbbVie (ABBV) at the beginning of 2013.  ABT’s quarterly dividend prior to the spin-off was $0.51/share.  After the spin-off, ABT paid $0.14/share and ABBV paid $0.40/share, for a combined payout of $0.54/share – an increase of 5.6%.  ABT’s new quarterly payout, beginning in February is $0.22/share.

Conglomerate 3M (MMM) increased their payout by 35%.

Sherwin-Williams Company (SHW) increased their payout by over 28%.

Finally, the agricultural company ADM, in addition to providing one of the best returns for the year, increased their payout by 26%.

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