Not all dividend aristocrats are equal, and with 50 dividend aristocrats to choose from it can be difficult selecting the best ones. A common question we often hear is “what are the high yield dividend aristocrats?” To help answer this and more, we have filtered the list and come up with this list of 10 high yield dividend aristocrats.
The chart below shows that the highest yielding dividend aristocrat is HCP at 6.2% yield, with the top 10 paying at least 3.3%. The average yield for these ten names is 4%, much higher than the average for the dividend aristocrat index as a whole which is closer to 2.5%.
While this list of high yield dividend aristocrats is a good place to start getting some stock ideas, there are other important factors to consider when selecting stocks for your portfolio. Most importantly is dividend sustainability, a high dividend is only good when it is a sustainable high dividend, if the company cannot support the yield, and a dividend cut is likely there is a good chance you will lose money holding the investment. In fact, one reason many companies have overly high yields is because the stock price has fallen significantly, usually due to a loss in future earnings power, and this means the yield has moved up, but only temporarily, as the market is pricing in a dividend cut.
High Yield Dividend Aristocrats
The table below shows some of the important dividend metrics that we consider when assessing dividend safety, you can view the definition and danger zones for each metric on our dividend safety score page. Overall, we are looking for reasonable payout ratios, and leverage metrics that are not too high, as well as valuation metrics that are in-line with comparable companies.
Financial metrics are great, but they only scratch the surface of financial analysis. It’s important to get a full understanding of the company before you invest money in it. Below are snapshots of each of the 10 high yield dividend aristocrats to get you started.
High Yield Dividend Stocks Summaries
HCP: (NYSE: HCP). HCP is a REIT (Real Estate Investment Trust), which is exactly why its dividend yield is so high, relative to peers. REIT’s pay out 90% of their profits to shareholders by mandate so dividend yields tend to be higher than peers. HCP focuses its property investments in the U.S. healthcare sector, including senior housing, life science, medical offices and hospitals. medical office segments. HCP owns over 500 senior housing facilities and has interests in over 300 nursing facilities, as well as ownership in many unconsolidated joint ventures.
AT&T (NYSE: T). T is a communications and digital entertainment service provider and operates globally, although business is primarily focused in the U.S. The four segments that T operates in are Business Solutions, Entertainment, Consumer Mobility and International. T aims to be a fully integrated solutions provider offering mobile services, next-gen TV, high-speed internet, among others. With a focus on connecting people and keeping customers entertained.
Chevron (NYSE: CVX). CVX is an integrated energy and chemicals business operating across two broad segments, Upstream and Downstream. Upstream activities include exploration, development and production of crude oil and natural gas. Downstream activities include the refinement of crude oil into other products, as well as marketing for crude and other oil products, energy transportation, as well as the manufacturing of industrial plastics, lubricants, and others.
Emerson Electric (NYSE: EMR). EMR is an engineering company that solves problems for its industrial, commercial, and consumer customers globally. EMR operates in five segments which include Process Management, Industrial Automation, Network Power, Climate Technologies, and Commercial & Residential Solutions.
Abbvie (NYSE: ABBV). ABBV is a research and bio-pharmaceutical company that develops and markets therapies for a wide range of diseases. ABBV sells pharmaceutical products focused on treating medical conditions, including HIV, Parkinson’s, among others. ABBV has a strong pipeline of new medicines as well as a large portfolio of existing products.
ABBV originated in 2013 as a spin-off of Abbott Laboratories, this chart uses Abbotts divvy history for pre 2013. The ABBV chart is skewed by the spin-off that occurred in 2013, making prior years not directly comparable, additionally while the yield has remained relatively constant in the 3% range, the dividend growth was skewed by the transaction. Nonetheless, ABBV has continued what Abbott started and has been growing dividends since the spin-off, but dividend growth has been low.
Exxon Mobile (NYSE: XOM). Similar to Chevron, XOM is involved in both the exploration and production of crude oil and natural gas, and is a manufacturer of petroleum products as well as being involved in transportation and the manufacturing of petroleum products. XOM operates in four segments, Upstream, Downstream, Chemical, and Corporate and Financing segments. XOM has several large exploration and developed projects located around the world.
XOM’s dividend growth can only be described as lumpy; nonetheless, directionally growth has been positive for decades, an amazing feat for a commodity leveraged company. This is especially true since the energy collapse, where we have seen dividend growth fall sharply but still remaining above 5%. With share prices falling hard the result has been XOM’s yield approaching a solid 4%, well above historical levels.
Consolidated Edison (NYSE: ED). ED is a large US Electric utility company involved in regulated electric and gas transmission which gives it strong stable recurring earnings. Ed began in 1823 making it one of the oldest running companies in the U.S. ED is a provider of energy related products and services to both wholesale and retail customers, is also develops, owns and operates renewable and energy infrastructure projects.
After years of steady sub-1% growth, ED picked up the pace of dividend growth in 2012, nonetheless a sub-4% dividend growth rate is nothing to get too excited about. However, we do like Consolidated Edison’s high yield and relative safety compared to some of the other higher yielding dividend aristocrats.
Target (NYSE: TGT). TGT is a retailer of essentials and merchandise to consumers. It sells a wide range of merchandise and food through its stores as well as via the internet. Merchandise sold includes food both perishable and non-perishable, as well as a wide selection of consumer goods. TGT operates at the lower price point for consumers and is in direct competition with Wal-Mart. TGT owns many brands which it tucks-in via M&A and then sells throughout its store footprint.
Coca-Cola (NYSE: KO). Best known for a few of its biggest brands, KO actually licenses and markets over 500 non-alcoholic brands all focused on soft drinks, juices, teas, coffees and energy drinks. KO is a multinational with one of the biggest global presences of any company in the world. KO also markets, manufactures and sells beverage concentrates, syrups typically for fountain drinks, and finished sparkling drinks.
Another of the high yield dividend aristocrats is KO which has seen solid dividend growth and rising share prices keeping yields in the 2% to 3% range over the past decade. Coca cola dividend growth has been slowing since 2013, but its still a healthy 6% to 8%.
Nucor (NYSE: NUE). NUE is involved in the manufacturing of steel products, also producing direct reduced iron that is used in its mills. NUE also processes a wide variety of metals both ferrous and nonferrous. NUE operates across three segments which include steel mills, steel products, and raw materials.