Meet the 4 Newest Dividend Aristocrats

A couple of weeks ago, I discussed the value of investing in the S&P 500 Dividend Aristocrats, the 50 companies in the index that have hiked their dividends for at least 25 consecutive years. It boils down to performance: in the last decade, this vaunted group has returned an average of 10.3% a year (including dividends), compared to just 6.3% for the S&P 500 as a whole. It’s also a list that doesn’t change much. Last year, there was just one adjustment, and it was a removal, after Family Dollar Stores (FDO) was taken over by Dollar Tree (DLTR).

But in the next 14 months, four companies will punch their tickets to this elite club. Should you invest in them? Analog chipmaker Linear Technology (LLTC) raised its dividend for the 24th straight year in February, making it eligible to enter the pantheon of Dividend Aristocrats in early 2017. Praxair (PX) also marked its 24th straight dividend hike earlier this year. The stock yields 2.7%, and a 25th increase next spring looks like a slam-dunk, thanks to its reasonable 52.9% payout ratio (or the percentage of earnings paid out as dividends). General Dynamics (GD) became a Dividend Aristocrat with gusto in early March, marking its 25th year of dividend hikes by announcing a 10% increase, payable in May. Roper Technologies (ROP), my top pick among these four, has the one ingredient General Dynamics lacks: diversification.

Source: InvestorPlace

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