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Dividend Champions

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Lion's Roar!If being a Dividend Aristocrat wasn’t enough, I recently stumbled upon the idea of a Dividend Champion. The Dividend Champions list was an idea created by George Smyth and published monthly on his DRiP Investing Resource Center site. Whereas the Dividend Aristocrat is a company that increases their dividend payout each year for 25 consecutive years, the requirements to be a Dividend Champion are less stringent. They have to at least maintain the dividend (they can increase it) over that same period.

What makes the Dividend Champions list so valuable is in the wealth of information the list provides. Not only does it include almost everything you could possible want to know about the Champions and their payouts, but it includes soon-to-be champions/aristocrats (20-24 year streaks) and the extent to which a company is a champion. For example, did you know that eleven companies have been on Champions for over 50 years?

  1. Diebold Inc. (DBD) – 56 years
  2. American States Water (AWR) – 55 years
  3. Dover Corp. (DOV) – 54 years
  4. Northwest Natural Gas (NWN) – 54 years
  5. Genuine Parts Co. (GPC) – 53 years
  6. Procter & Gamble Co. (PG) – 53 years
  7. Emerson Electric (EMR) – 53 years
  8. Parker-Hannifin Corp. (PH) – 52 years
  9. 3M Company (MMM) – 51 years
  10. Integrys Energy Group (TEG) – 51 years
  11. Vectren Corp. (VVC) – 50 years

There’s also a 49-year streaker in Cincinnati Financial (CINF), one more year before she joins the quinquagenarian club!

Fifty years… that means those companies have been paying out dividends (and increasing them) since 1960. That time period includes eight recessions listed on Wikipedia such as the OPEC oil crisis in the 70s, the deeper recession in the 1980s after the Iranian Revolution, and the tech boom and bust in the earlier 2000s plus the most recent recession we’re still in (or just exited, depending on how much you believe the GDP numbers). There are several booms and busts in there and like clockwork these companies have been paying out.

(Photo: iam_photo)

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22 Responses to “Dividend Champions”

  1. KeithM says:

    Speaking of dividends, can anyone recommend a reputable software program or website for tracking re-invested dividends?

    The only one I have found is Drip Wizard. It appears to do the job, but it can’t say that it is user friendly.

    Any leads would be greatly appreciated.

    • Sadie says:

      To Keith – Thanks for the tip on DRIPWIZARD.com!
      You are certainly not alone in your plight; I have same problem though go back 40+ yrs and most likely we have a lot of company!
      I finally stopped reinvesting dividends to one day simplify this effort!

      Interesting such a tool has been over-looked as need defintely exists!

    • Anonymous says:

      open an account with a broker. dividends reinvestments are automatically tracked.

  2. cubiclegeoff says:

    Good information. I wish it was as easy to say to buy this and you’ll have a chance at investing well, but there’s always more to it than that.

  3. M says:

    I second Keith’s request! I sold some stocks this year, originally purchased > 20 years ago, and trying to figure out my cost basis from the reinvested dividends is unbelievably difficult and time consuming. And when the company says even they have don’t have the records…

    Does anyone have any experience with how the IRS will handle this? I’m doing the absolute best I can, and have spent probably 60 hours on this, but some of the records just don’t seem to be available, I’m not that confident in my results.

    Other than the difficulty in calculating cost basis, I’ve had great experience with my dividend stocks! And now that everything is computerized, I think calculating cost basis should not be so difficult going forward.

  4. Evan says:

    I think the weirdest thing about that list is I have only heard of a handful of those companies!

  5. @M:

    If the IRS audits you and you can’t provide the information to prove the cost basis you claimed, you’ll be required to claim a cost basis of $0 plus whatever you can prove with documentation. Basically, it doesn’t matter to the IRS if you reinvested dividends for 20 years but only have records on your original purchase. If you don’t have the records on the reinvested dividends, you can’t claim them as part of your cost basis.

    But, this all depends on whether or not they audit you. No audit – no problems.

  6. M says:

    @Paul

    Thanks for the info! I’ll keep my fingers crossed for no audit, then.

  7. No problem, M. Just don’t get carried away and you’ll be fine. Even if you do get audited, they’re not going to fine you if you weren’t trying to commit fraud.

    Most people are unlikely to ever get audited – especially if you have a pretty simple return. I’d say more people worry about it than they should.

    I’m not saying we should cheat on our taxes because we’re unlikely to get caught. But if you’re trying to be honest and don’t have all the documentation, you don’t have too much to worry about.

  8. Cheap Bastard says:

    @M

    Too bad you didn’t buy your stocks from within a Roth IRA – it would have all been tax-free in that case!

  9. Interesting information about those companies. Even though they raised their dividends every year, the percentage seems to be hovering around the same amount since the companies were started. It shows something when a company can be that consistent.

  10. Dividend stocks are a big interest of mine. I know the opposite argument is that company’s should be investing in R&D instead of paying out but I’m a big fan of dividend stocks. I also think that paying dividends can signal solid companies, especially if they are continuing to increase EPS and annual profits while growing dividends annually…pretty impressive from my perspective.

    I’ve started researching dividend paying stocks a lot more ever since I bought into Johnson & Johnson (a solid dividend stock) a few months back. This list is really interesting and each company merits further research on my end. Cheers!

    • Jim says:

      That’s the classic argument and I think it makes more sense for growth businesses, less for blue chip types of companies. What I’m learning is that not only is the dividend important but dividend growth, that is year over year increases, is also a very important factor.

      I think the amazing part is that there are companies that have increased/maintained their dividend for 50+ years.

      • zapeta says:

        I agree! Its hard to believe that companies have increased dividends for 50 or more years…not that they couldn’t stop in the future but it seems unlikely given that kind of stability. I’ve been very interested in dividend stocks since you featured the dividend investment guest posts, so thanks Jim! I’d definitely like to see more posts and information on the subject.

  11. Pop says:

    I also like that high/consistent dividend payers attract a certain kind of investor. Over time, they develop the loyal kind of investor who won’t flee a stock for a company with rapid growth and reinvestment. You tend to get a lot of retirees who actually rely on those dividends for their income. On the other hand, I’d be interested in seeing if there were any banks on there in 2007/2008 that obviously dropped off after all their business models imploded.

  12. eric says:

    The more I hear about dividends, the better they sound.

  13. thomas says:

    I love dividends, but it really does make me wonder why the companies can’t find a better use of the money.

  14. phaedruscj says:

    Diebold and Former Executives Charged with Accounting Fraud

    This is how companies can continue to pay dividends

    http://www.infozine.com/news/stories/op/storiesView/sid/41497/

  15. Eric says:

    Be sure to note that companies do fall off the dividend aristocrat and champions lists from time to time. a number of the banks that had to suspend or drastically cut their dividends during the recent crisis were once on these lists. do your homework and diversify.

  16. Rexchasing says:

    What is “a company that includes those that paid higher dividends without necessarily increasing the quarterly dividend payout.”? My meager little mind can’t wrap itself around the logical construction of this sentence (from the first paragraph of the article).


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