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.

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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
Years of
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
Years of
S&P 500
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.

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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.

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