Which are better, Dividend Aristocrats or Heroes?

Dividend Aristocrats and Dividend Heroes are two different classifications, in different countries, to help investors find great long-term income stocks.

A person holding onto a fan of twenty pound notes

Image source: Getty Images.

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.

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!

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 HeroDividend
yield
Years of
raises
5Y SP
change
AIC sector
abrdn Equity Income6.41%21-24%UK Equity Income
Merchants Trust5.06%39+12%UK Equity Income
City of London4.97%55-8.9%UK Equity Income
JPMorgan Claverhouse4.91%49-3.4%UK Equity Income
Value and Indexed Property Income4.75%34-5.2%Property – UK Commercial
Sources: Association of Investment Companies, Yahoo!

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 AristocratDividend
yield
Years of
raises
5Y SP
change
S&P 500
sector
Franklin Resources4.98%40-47%Financials
International Business Machines4.89%26-7.9%Information technology
Walgreens Boots Alliance4.86%46-48%Consumer staples
3M Company4.59%63-39%Industrials
Realty Income Corporation4.58%27+20%Real Estate
Sources: S&P Dow Jones Indices, Yahoo!

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.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Alan Oscroft has positions in City of London Inv Trust. The Motley Fool UK has no position in any of the shares mentioned. 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

Young brown woman delighted with what she sees on her screen
Investing Articles

3 easy actions that could boost my stock market returns

The UK stock market is going through a sticky patch so this Fool is looking for ways to improve his…

Read more »

Hispanic man using laptop in home office and drinking coffee
Investing Articles

Boohoo shares: time for me to admit defeat?

This Fool is nursing heavy losses from his Boohoo Group (LON: BOO) shares. Should he sell up and move on?

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

6% dividend yields! 2 cheap UK shares to buy in July

Harshil Patel considers two cheap UK shares paying fairly high dividends. He'd consider them for his Stocks and Shares ISA.

Read more »

Social media and digital online concept, woman using smartphone
Investing Articles

Will Lloyds shares recover in 2022?

Lloyds shares have struggled this year and the looming recession won't help. But I'd still buy them today.

Read more »

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

Can the stock market make me rich even now?

Here are three ways I'm coping with the stock market's recent bout of weakness and aiming to build wealth in…

Read more »

Cogs turning against each other
Investing Articles

3 top investment trusts to buy right now

Investment trusts offer a wide range of options for investors. And in troubled times, they provide some safety through diversification…

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

Why hasn’t the FTSE 100 crashed in 2022?

The catastrophic events of 2022 have left investors around the globe fearing the worst for stock markets. And some have…

Read more »

Trader on video call from his home office
Investing Articles

2 inflation-resistant FTSE 100 stocks to buy today

Soaring inflation could dent my returns if I don't take care. Here are two top inflation-resistant FTSE 100 stocks I'd…

Read more »