The Superstar Dividend Aristocrats
Only 5 stocks with back to back double digit hikes
The Dividend Aristocrats are lagging this year with an average return of just 7.3% as of July 26, 2024. We highlight the three Aristocrats that stand out based on dividend growth with bigger increases every year in the last three years.
Based on Friday’s closing prices we have now seen 36 Dividend Aristocrats announcing a dividend hike so far YTD with the average increase being 5.9%. Thanks to Cintas, doing a 15.6% hike last week, the average would have been a lot worse with now six Aristocrats increasing the dividend by at least 10% in 2024.
Most Aristocrats so far are dissapointing with mini increase like the 1.2% hike by Stanley Black & Decker just last week. A total of 11 Aristocrats announced a dividend hike of 2.5% or less in 2024 bringing down the average increase significantly.
With our Focus Stocks we look at the best dividend growers worldwide with consistant, preferrably double digit, annual increases, combined with other strong metrics and of course a strong dividend track record to start with. Most of these super dividend stocks are actually NOT Dividend Aristocrats. Please note that this is not about the biggest dividend hikes but about the most consistent increases over time without big variations throughout the years.
THREE (AND MAYBE 5) OF THE BEST ARISTOCRATS
However, some Dividend Aristocrats tick all the boxes based on important metrics apart from a strong track record and above average dividend growth. We highligt three Aristocrats that are unique with Fastenal (FAST), Cintas (CTAS) & Nextera Energy (NEE) as the only three Aristocrats with a double digit dividend hike in each of the last three years, including 2024.
Two more stocks, Brown & Brown (BRO) and Automatic Data Processing (ADP) can join these three superstars only if they announce another double digit increase later this year.
In today's stock market, finding companies with a durable competitive advantage, or "moat," is key for long-term investing. Here, we'll explore five companies—Fastenal, Cintas, Nextera Energy, Brown & Brown, and ADP—that not only have strong business models but also boast significant moats.
It is no surprise that Brown & Brown currently is the best performing Dividend Aristocrat in 2024 with a 39.9% Total Return which also explains the rather small dividend yield for the insurer. Cintas (#3 Aristocrat YTD with +26.9%) and NextEra Energy (#6 with +24.2%) are also outperforming this year, combined with a double digit dividend growth.
1. Fastenal (FAST)
Business Overview: Fastenal is a leading distributor of industrial and construction supplies, specializing in fasteners, tools, and safety products.
MOAT: Fastenal's moat is rooted in its extensive distribution network and superior customer service. With thousands of locations, Fastenal ensures rapid product availability and delivery. Their integrated supply chain solutions and vending machines embedded within customer facilities create a sticky customer base, making it challenging for competitors to match their service level and convenience.
Dividend Stats
Fastenal has a 2.22% dividend yield at a stock price of $70.37. The company has raised its dividend for 25 consecutive years with double digit increases in each of the last 7 years, including a 11.4% hike in 2024.
2024 hike: +11.4%
2023 hike: +12.9%
2022 hike: +10.7%
2. Cintas (CTAS)
Business Overview: Cintas provides specialized services to businesses, including uniform rental, facility services, and first aid supplies.