The S&P 500's most reliable dividend stocks are beating the market. Here's how to play them.
By Philip van Doorn
The S&P 500 Dividend Aristocrats have been on a tear and held up well during Thursday's stock-market rout. You can invest in them as a group or make use of two stock screens to start your own research on individual companies.
Investors love to receive dividend payments. But they also want assurance that the companies they are invested in won't cut their payouts.
Dividend-paying stocks have done well lately, and a particular group of them, the S&P Dividend Aristocrats, has soared. These are stocks of companies that have increased their dividends to common shareholders for at least 25 consecutive years.
The S&P 500 Dividend Aristocrats Index XX:SP50DIV has 68 stocks. The only criteria for inclusion is 25 straight years of dividend increases. It does not matter how high or low a stock's current dividend yield might be.
The idea is that companies whose management teams are dedicated to rewarding shareholders through dividends can be solid (if not spectacular) long-term performers. That dedication and the care taken to avoid dividend cuts might signal overall prudence in a company's management and board of directors.
On Thursday, when the S&P 500 fell 4.36% - its worst one-day decline since April 4, 2025 - the S&P 500 Dividend Aristocrats Index declined only 1.4%.
It is easy to invest in the Aristocrats as a group, since the index is tracked by the ProShares S&P 500 Dividend Aristocrats exchange-traded fund NOBL. Here is how NOBL has performed against the S&P 500 this year, both with dividends reinvested:
So far, 2026 has been an excellent year for the S&P 500 Dividend Aristocrats, a group of 68 companies that have increased their dividend payouts for at least 25 consecutive years.
The soaring recent performance for NOBL may center on investors' shorter-term concerns. On Thursday, Nicholas Colas, co-founder of DataTrek Research, in the firm's emailed newsletter called companies dedicated to steady dividend increases "a rare breed."
He attributed recent increases in steady dividend growers "to both declining Treasury yields and worries about AI-related CapEx." Colas indicated that the run-up in dividend stocks was not a warning sign for the U.S. economy. "Rather, it is a justifiable shift in investor preferences to judicious corporate capital allocation," adding, "We believe this is a prudent investment style for many asset owners just now. "
And in an email exchange with MarketWatch, Justin Bergner, portfolio manager of the Gabelli Dividend and Growth Fund GABBX wrote that dividend stocks were "skewed toward defensive non-AI sectors like staples and healthcare as the AI trade unwinds, because interest rates have materially declined, and because earnings have been glass half full, at least in a relative context."
The Aristocrats cannot be expected to outperform the S&P 500 over longer periods, as the broader index is heavily weighted to very large companies that are growing rapidly. Over the past three years, NOBL has returned 50%, while the S&P 500 has returned 75.1%. But investors can expect performance that is differentiated from the S&P 500. For example, in 2022, when rising interest rates helped send the S&P 500 down 18.1%, NOBL declined only 6.5%. Both of those figures include reinvested dividends.
Screening the Aristocrats
NOBL quotes a 30-day SEC yield of 2.28%. The State Street SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 by holding all of its stocks, has a 30-day yield of 0.96%.
The 68 stocks held in the NOBL portfolio have dividend yields ranging from 0.26% to 5.76%. Here are the 10 with the highest current dividend yields, with this year's price changes through Thursday, excluding dividends:
Company Dividend yield 2026 price change
Amcor 5.76% 9.9%
Realty Income Corp. 5.48% 5.6%
Hormel Foods 5.18% -4.6%
Clorox 5.02% -1.1%
T. Rowe Price 4.78% 6.2%
Kimberly-Clark 4.64% 9.5%
Eversource Energy 4.38% 6.8%
PepsiCo 4.15% -0.6%
Franklin Templeton 4.10% 34.8%
Federal Realty Investment Trust 4.10% 12.3%
Source: FactSet
Another way to screen the Aristocrats is to highlight companies that have increased their payouts most quickly. So we looked at the 68 Aristocrats' five-year compound annual growth rates (CAGR) for regular dividends on common shares.
For example:
-- Aflac AFL has a dividend yield of 1.93%, based on Thursday's closing price of $126.24 and a current annual dividend rate of $2.44 a share.
-- If you had purchased Aflac's stock on Nov. 5, 2021, you would have paid $56.75 a share. At that time, the annual dividend rate was $1.32 a share - the dividend yield was 2.33%.
-- Aflac's current dividend yield is lower than it was five years ago. But the company's dividend has compounded at an annual pace of 13.1%. If you had bought the stock five years ago and held it, your dividend yield based on the $56.75 you paid and the current payout rate of $2.44 would be 4.30%. Meanwhile, your share price would have increased by 122%.
Here are the 10 S&P 500 Dividend Aristocrats with the highest five-year CAGR for dividend payouts:
Company Five-year dividend CAGR Current dividend yield Dividend yield on shares purchased five years ago Dividend yield five years ago Five-year price change
Cintas 17.0% 0.92% 1.88% 0.86% 105%
Linde 14.2% 1.23% 1.93% 0.99% 57%
Fastenal 13.2% 1.97% 3.57% 1.92% 82%
Aflac 13.1% 1.93% 4.30% 2.33% 122%
Nordson 13.0% 1.21% 1.44% 0.78% 19%
Automatic Data Processing 12.8% 2.21% 2.96% 1.62% 34%
Roper Technologies 12.2% 0.81% 0.83% 0.46% 1%
Brown & Brown 11.9% 0.97% 1.16% 0.66% 20%
Atmos Energy 11.8% 2.49% 4.64% 2.66% 86%
NextEra Energy 10.1% 2.82% 2.91% 1.80% 3%
Source: FactSet
Click on the tickers for more about each company.
More on dividend stocks:
-- 6 dividend stocks for investors who want to cut their exposure to the S&P 500
-- Looking for income? These dividend stocks have high yields that seem well supported.
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
11-06-26 0731ET
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