Updated April 21, 2021 by Bob Ciura
The table is updated daily
The NASDAQ Dividend Achievers Index consists of over 350 stocks with more than 10 consecutive years of dividend increases that also meet certain minimum size and liquidity requirements.
It’s one of the best sources for finding quality dividend growth stocks.
The downloadable dividend exciters spreadsheet list below shows the following for each stock in the index:
- Dividend yield
- Name and ticker
- Price-performance ratio
- Price-earnings ratio
You can download your Excel list of all dividend distributors by clicking the link below:
Note: The list of dividend distributors is updated using the holdings of this Invesco ETF.
Use the list of dividend exciters to find high quality dividend growth stocks
The list of all 351 dividend payouts is valuable as it provides dividend growth investors with a long list of stocks that have raised their dividends for at least 10 consecutive years.
These are companies with shareholder-friendly management teams who are committed to rewarding investors with increasing dividends, and who are able to increase their dividends because of their long-term earnings growth.
Together these two criteria form a powerful Pair. They get even more powerful when an investor buys high quality dividend growth stocks when they are undervalued.
The above table allows you to sort by price / earnings (or dividend yield) so you can quickly find undervalued dividend paying companies that have made dividend increases for more than 10 consecutive years.
Here’s how to use the list of dividend exciters to quickly find high quality dividend growth stocks that may be trading at a discount:
- Download the list
- Sort by P / E ratio (or forward P / E ratio), from lowest to highest
- Filter out stocks that yield less than 3%
- Research the top stocks further to find the best ideas
To filter out stocks with a return less than 3% if you are unfamiliar with Excel:
Step 1: Click the Dividend Yield Filter button:
Step 2: Go to ‘Number Filter’ and then click on ‘Greater Than or Equal to’:
Step 3: Enter the desired income amount (as a decimal number), .03 in the example above. Then press ‘Ok’.
That’s it; The remaining stocks will all have dividend yields above 3%.
Other dividend lists
The list of dividend distributors isn’t the only way to quickly search for stocks with a long history of dividend growth. The Dividend Aristocrats Index consists of 65 stocks with more than 25 years of consecutive dividend increases. It is more exclusive than the Dividend Achievers Index.
There is a similar group known as Dividend Champions, whose dividends have been increasing for more than 25 consecutive years. The Dividend Champions is a larger list, however, as it contains stocks that may not be considered Dividend Aristocrats due to indexing or trading volume requirements.
The Dividend Kings List is even more exclusive. It is made up of 30 stocks with more than 50 years of consecutive dividend increases.
The Blue Chip Stocks list contains more than 250 stocks that either belong to the list of dividend generators, dividend aristocrats or dividend kings.
In fact, the list of Dividend Aristocrats has significantly outperformed both the S&P 500 index and dividend top performers for the past decade.
Performance of the Dividend Achievers Index
Over the past five years, the Invesco Dividend Achievers ETF (PFM), the premier ETF tracking the Dividend Achievers, has posted a total annualized return of 12.6%. The comparable ETF, which tracks the S & P 500 Index with a ticker SPY over the past five years, lagged slightly behind its performance. SPY has achieved an annualized total return of 16.6% over the past five years. There are several reasons for this.
First is the Dividend Aristocrat Index weighted equally, while the Dividend Achievers Index is Weighted market capitalization.
On the surface, it doesn’t sound like it matters, but it has a serious impact on ROI.
This means that larger stocks with larger market caps make up a larger portion of the Dividend Achievers index. The top 5 dividend payouts by weight are listed below (along with their weight):
- Microsoft (MSFT): 4.0%
- JP Morgan Chase (JPM): 3.1%
- Johnson & Johnson (JNJ): 3.0%
- Walmart Inc. (WMT): 2.7%
- Visa Inc. (V): 2.6%
I’m not saying these large holdings don’t make good dividend investments. The market capitalization has practically no influence on the determination of the best dividend distributors. The problem with weighting market cap is that it is is the opposite of value investing.
Imagine if the price / earnings ratio of a stock increases from 10 to 20 while the result does not change. The company’s market capitalization would double. Pay in the real world twice as much for the same is not “good business”. With the weighting of the market capitalization, the Dividend Achievers index would hold Double the investment in the business where the P / E doubled.
The Dividend Achievers Index also does not increase participation in companies whose market capitalization has fallen. This means that if another company’s price / performance ratio fell from 30 to 15 (and earnings were unchanged), the Dividend Achievers Index’s stake in that company would decrease by 50%.
The weighting of the market capitalization buy high and sell low. The weighting of the market capitalization does not take advantage of the valuation, while this is the case with the same weighting.
With the same weighting, if the value for money of a company falls by 50%, the fund must do so Buy more Keep weights the same. Likewise, it must have an equally weighted fund to sell when a company’s value for money increases in order to keep the fund equally weighted.
Another difference between the Dividend Aristocrats and the dividend winners is the dividend story. 10 years is a sizeable series of consecutive dividend payments. It covers (at best) 1 business cycle.
Cover 25 years of consecutive dividend increases multiple business cycles. Dividend germs don’t have the same consistency as dividend aristocrats. Dividend history is important.
Thoughts on underperformance
SPY and PFM are both weighted based on market capitalization. PFM has a higher expense ratio, but before I got any historical performance metrics I would have expected PFM to outperform SPY.
Dividend stocks have historically outperformed non-dividend-eligible stocks. Stocks with a long dividend history (Dividend Aristocrats) have historically outperformed the market.
Why didn’t the Dividend Achievers outperform? One reason could be that the valuation multiple of the broader SPY fund grew faster than the Dividend Achievers ETF.
The inability of the Dividend Achievers Index to outperform the S&P 500 over a period of time that has been relatively cheap for dividend stocks (due to falling interest rates) is confusing.
Regardless, fund investors have better dividend ETFs to choose from.
A starting point
The list of dividend payers is best used as a Starting point for those looking for high quality dividend growth stocks.
Being a dividend achiever in and of itself doesn’t automatically guarantee that an individual stock will have one permanent Competitive advantage or that it is a good investment.
Long term investors should ensure that an investment has a strong and lasting competitive advantage, shareholder friendly management and trading at a reasonable (preferably undervalued) valuation.
The combination of the Dividend Achievers Index for these types of companies can greatly speed up your search for high quality shareholder friendly companies that trade at fair or better prices.
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