2 UK dividend aristocrats I’d buy

These two UK dividend aristocrats have increased their payouts annually for over 25 years. Christopher Ruane would consider both for his portfolio.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Two hands holding champagne glasses toasting each other with Paris in the background

Image source: Getty Images.

Dividend aristocrat is the name given to a US share that have increased their shareholder payout each year for at least 25 years. Dividends are never guaranteed, so a company being able to raise its dividend each year for a quarter of a century is seen as an encouraging sign. It suggests a strong business, and a strong committment to paying dividends. Among shares that would qualify as UK dividend aristocrats, here are two that I would consider buying for my portfolio.


The owner of premium brands from Guinness to Talisker, Diageo (LSE: DGE) has the perfect drinks cabinet for a good party. Its shareholders have lots to celebrate too. The company has increased its dividend annually for over three decades. This week it increased its interim dividend yet again, on this occasion by 5%.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

The economics of its business lend themselves well to healthy dividends. Demand for drinks tends to stay fairly high. The premium nature of the company’s brands means that it has pricing power. It can use that to offset the risk of ingredient inflation hurting profit margins.

An increasing number of abstainers could hurt revenues and profits in future. Diageo is trying to combat that risk, for example through the launch of alcohol-free Guinness in the UK and buying the non-alcoholic Seedlip brand. It revealed this week that sales in its first half exceeded pre-pandemic levels. While dividends are never assured, I see a strong future for the business and would happily hold it in my portfolio.


Another company that has raised dividends annually for over 25 years is DCC (LSE: DCC). The energy, healthcare, and technology conglomerate has now raised its payout each year for 27 years in a row.

Like Diageo, business is buoyant. In its first half, DCC revenue grew 26.8% and adjusted earnings per share were up 13.8%. That enabled the company to raise its interim dividend by 7.5%.

DCC’s business may not seem that exciting but its consistently dynamic performance suggests that the business model is finely tuned. The company is a leading supplier of bottled gas in many markets. As demand is resilient and competition is limited, that could remain a highly profitable business for many years. The rise of alternative energy may harm revenues, but that is where DCC’s internal diversification works well in my view. Its businesses do not move in lockstep. So if one underperforms, strong results elsewhere in the company can mean the overall company still grows.

My next move on these UK dividend aristocrats

I would be happy buying both Diageo and DCC for my portfolio. I hope their strong, proven business models can keep generating enough profits to continue their long history of dividend increases. But even if they do not, I feel they are both high-quality businesses with well-identified target markets that look resilient to me. They are the sort of companies I would be content to own in my portfolio for many years to come.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

More on Investing Articles

Tabletop model of a bear sat on desk in front of monitors showing stock charts
Investing Articles

3 reasons why the stock market is falling today

Jon Smith explains several factors that are contributing to the stock market falling today, and his thoughts on them.

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

2 stocks that are great long-term picks

As recession fears weigh on share prices, our author has found two stocks with strong long-term prospects. He’s looking at…

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

2 lesser-known penny stocks to buy now and hold for 10 years!

I’m currently looking at penny stocks that could help my portfolio grow over the next 10 years. Despite recent volatility,…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

Here’s 1 of the best stocks to buy for passive income

Jabran Khan delves deeper into one of the best stocks to buy for passive income, which is a FTSE 100…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

IAG shares are down 15% amid travel chaos! Is now the time to buy?

IAG shares have collapsed over the past month. Shareholders had hoped for a strong Q2. But maybe this represents a…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

UK shares: 1 dividend stock I own to combat inflation

This Fool is looking for quality UK shares to combat inflation through consistent and stable returns as well as growth…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

Here’s how I’m investing as stock market volatility soars!

2022 has seen an explosion in stock market volatility. But with the right approach I think ongoing choppiness could turbocharge…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

2 top FTSE 100 shares to buy before a new bull market

On my search for FTSE 100 shares to buy before the recovery, I have found two growth options that could…

Read more »