Investors who are anything like me want reliable, progressive dividends, with confidence that they’ll perform for decades. I’ve been examining two classifications to help me find exactly that: Dividend Heroes and Dividend Aristocrats.
One is focused on UK-listed investment companies, the other on S&P 500 dividend stocks in the USA.
Dividend Heroes
The Association of Investment Companies (AIC) has listed all UK investment trusts that have raised their dividends every year for at least 20 years. Some of them have done so for more than 50 years now.
There are 17 in the Dividend Heroes list, and these five offer the biggest yields:
| Dividend Hero | Dividend yield | Years of raises | 5Y SP change | AIC sector |
| abrdn Equity Income | 6.41% | 21 | -24% | UK Equity Income |
| Merchants Trust | 5.06% | 39 | +12% | UK Equity Income |
| City of London | 4.97% | 55 | -8.9% | UK Equity Income |
| JPMorgan Claverhouse | 4.91% | 49 | -3.4% | UK Equity Income |
| Value and Indexed Property Income | 4.75% | 34 | -5.2% | Property – UK Commercial |
Unsurprisingly, most are in the UK Equity Income sector. There are other Dividend Heroes that target growth too, while still maintaining progressive dividends but on lower yields.
I’m surprised to see a commercial property trust in the list, offering a solid 4.7% dividend yield, which it has lifted for 34 consecutive years. Perhaps there’s a contrarian investment angle here.
Dividend Aristocrats
Across the Atlantic, Dividend Aristocrats are companies on the S&P 500 that have lifted their dividends for at least 25 straight years.
This year, 64 companies made the cut. Here are the five biggest yields:
| Dividend Aristocrat | Dividend yield | Years of raises | 5Y SP change | S&P 500 sector |
| Franklin Resources | 4.98% | 40 | -47% | Financials |
| International Business Machines | 4.89% | 26 | -7.9% | Information technology |
| Walgreens Boots Alliance | 4.86% | 46 | -48% | Consumer staples |
| 3M Company | 4.59% | 63 | -39% | Industrials |
| Realty Income Corporation | 4.58% | 27 | +20% | Real Estate |
There are plenty bubbling below the top five which also look interesting. So I might take a dive into those another time.
Again, there’s a real estate company in the top five. Maybe it really is time to have a closer look at property-related stocks.
It’s also interesting to see Franklin Resources top the list. It’s a global investment company, fitting in nicely with the AIC’s list of UK Dividend Heroes.
So which is better?
I can’t see any stocks there that I wouldn’t be happy to hold. I didn’t expect the generally poor five-year share price performances across both sets of stocks, mind. Over the long term, I’d expect share prices to rise in line with dividend yields.
But it seems to fit with the rise of the Nasdaq and the S&P 500 over the past five years, as investors have apparently been on a growth stock binge. Now were seeing corrections, could we be in for a period of renewed interest in dividend income?
Either way, I can’t help thinking that an international investment portfolio spread across these top Dividend Aristocrats and Dividend Heroes would be nicely balanced and could reward investors well for decades.
