My 2024 “Dividend Champions” are companies that trade in the US who have raised their dividend for 25+ consecutive years. This list is a select one of only 135 companies out of nearly 6,000 listed on the NYSE and Nasdaq, a success rate of approximately 2.2%, observes Prakash Kolli, editor of Dividend Power.
The number of Dividend Champions increases if we include over-the-counter (OTC) stocks. The total universe of US stocks goes up to about 11,500 in that case because several small banks and other equities are not traded on the NYSE or Nasdaq and are thus not included in this list.
For example, Farmers & Merchants Bancorp (FMCB) has raised its dividend for 50 years. However, the stock is thinly traded on the OTC market. Another example is Eagle Financial Services Inc. (EFSI), which has raised the dividend for 35 years but is also thinly traded on the OTC market. There are higher risks with thinly traded stocks, and we do not include them in this list.
The Dividend Champion 2024 list is broader than the Dividend Aristocrat list. A stock must only meet the requirement for raising the dividend for 25+ years to be added to the Dividend Champions List. However, the criteria for inclusion as a Dividend Aristocrat is stricter.
Data by YCharts
In addition to the 25+ years of dividend increases, a stock must be a part of the S&P 500 Index, have a minimum market capitalization of $3 billion, and meet trading volume and sector weighting requirements. Hence, a stock can be a Dividend Champion but not a Dividend Aristocrat. As of this writing, there are only 64 Dividend Aristocrats.
The Dividend Kings are also more exclusive than the Dividend Champions. To become a Dividend King, a stock must raise its dividend for 50+ consecutive years, a much tougher achievement. There are only 43 Dividend Kings as of this writing. However, a company can be a Dividend King, a Dividend Champion, and a Dividend Aristocrat. For instance, The Coca-Cola Co. (KO) is found on all three lists.
The 2024 Dividend Champions are currently trading at elevated valuations, with an average trailing price-to-earnings ratio of about 24.8X. This multiple is down from its peak of more than 31X in May 2021 due to declining stock prices and rising earnings.
The current average dividend yield is about 2.5%. The average trailing 10-year dividend growth rate is about 6.7% and the average past-five-year dividend growth rate is around 5.8%. On average, the payout ratio is approximately 57%. The mean market cap is $53,674 million.
Currently, the Dividend Champion with the highest yield is Altria Group Inc. (MO), while the one trading with the lowest earnings multiple is RenaissanceRe Holdings Ltd. (RNR).
