Updated on January 5th, 2024 by Bob Ciura
Income investors are always on the hunt for high-quality dividend stocks. There are many ways to measure high-quality stocks. One way for investors to find great dividend stocks is to focus on those with the longest histories of raising dividends.
With this in mind, we created a downloadable list of all ~150 Dividend Champions.
You can download your free copy of the Dividend Champions list, along with relevant financial metrics like price-to-earnings ratios, dividend yields, and payout ratios, by clicking on the link below:
Investors are likely familiar with the Dividend Aristocrats, a group of 68 stocks in the S&P 500 Index with 25+ consecutive years of dividend increases. Meanwhile, investors should also familiarize themselves with the Dividend Champions, which have also raised their dividends for at least 25 years in a row.
While their length of dividend increases is the same, leading to some overlap, there are also some important differences between the Dividend Aristocrats and Dividend Champions. As a result, the Dividend Champions list is much more expansive. There are many high-quality Dividend Champions that are not included on the Dividend Aristocrats list.
This article will discuss the Dividend Champions, and an analysis of our top 7 Dividend Champions, ranked according to expected total returns in the Sure Analysis Research Database.
Table of Contents
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Overview of Dividend Champions
The requirement to become a Dividend Champion is simple: 25+ years of consecutive annual dividend increases. The Dividend Aristocrats have the same requirement when it comes to number of years, but with a few additional requirements.
To be a Dividend Aristocrat, a company must also be included in the S&P 500 Index, must have a float-adjusted market cap of at least $3 billion, and must have an average daily value traded of at least $5 million. These added requirements preclude many companies that possess a sufficient track record of annual dividend increases, but do not qualify based on market cap or liquidity reasons.
As a result, while there is some overlap between the Dividend Aristocrats and the Dividend Champions, there are also many Dividend Champions that are not Dividend Aristocrats. Income investors might want to consider these stocks due to their impressive histories of annual dividend increases, so we have compiled them in the downloadable spreadsheet above.
In addition, we have ranked the top 7 Dividend Champions according to total expected annual returns over the next five years. Our top 7 Dividend Champions right now are ranked below.
The Top 7 Dividend Champions To Buy Right Now
The following 7 stocks represent Dividend Champions with at least 25 consecutive years of dividend increases, but they also have durable competitive advantages, long-term growth potential, and high expected total returns.
Stocks have been ranked by expected total annual return over the next five years, from lowest to highest.
Top Dividend Champion #7: Automatic Data Processing (ADP)
- 5-year expected returns: 12.6%
Automatic Data Processing is one of the largest business services outsourcing companies in the world. The company provides payroll services, human resources technology, and other business operations to more than 700,000 corporate customers.
With 48 years of consecutive dividend increases, it is also a member of the prestigious Dividend Aristocrats Index.
ADP posted first quarter earnings on October 25th, 2023, and results were mixed as the company beat on the bottom line, but fractionally missed the top line. Adjusted earnings-per-share came to $2.08, which was six cents better than expected. Revenue was up 7% year-over-year to $4.5 billion, but missed estimates by $10 million.
Employer Services grew 9%, which was driven by strong new business bookings and retention, as well as higher client funds interest revenue. PEO Services revenue rose 3% with new business bookings growth, but margins fell 90 basis points.
Click here to download our most recent Sure Analysis report on ADP (preview of page 1 of 3 shown below):
Top Dividend Champion #6: Sanofi SA (SNY)
- 5-year expected returns: 14.0%
Sanofi is a global healthcare company that develops and markets a variety of therapeutic treatments and vaccines. Pharmaceuticals account for ~72% of sales, vaccines makeup ~15% of sales and consumer healthcare contributing the remainder of sales.
Sanofi is truly a global leader, with a third of sales coming from the U.S., a little more than a quarter coming from Western Europe, and the remainder of sales coming from emerging markets/rest of the world.
Sanofi produces annual revenues of about $49 billion. Sanofi is incorporated in France, but U.S. investors have access to the company through an American Depositary Receipt, or ADR. Two ADR shares equal one share of the underlying company.
On October 27th, 2023, Sanofi reported third quarter results for the period ending September 30th, 2023. For the quarter, revenue grew 1.6% to $12.6 billion, but this was $10 million below estimates. The company’s earnings-per-share per ADR of $0.1.35 compared to $1.44 in the prior year and was $0.02 less than expected.
Click here to download our most recent Sure Analysis report on SNY (preview of page 1 of 3 shown below):
Top Dividend Champion #5: 3M Company (MMM)
- 5-year expected returns: 16.1%
3M is an industrial manufacturer that sells more than 60,000 products used daily in homes, hospitals, office buildings, and schools worldwide. It has about 95,000 employees and serves customers in more than 200 countries.
On October 24th, 2023, 3M reported earnings results for the third quarter.
Source: Investor Presentation
For the quarter, revenue declined 3.6% to $8.3 billion, but this was $280 million above estimates. Adjusted earnings-per share of $2.68 compared to $2.69 in the prior year, but was $0.33 more than projected.
Adjusted organic growth fell 3.1% for the period. Health Care had organic growth of 2.4%, while Transportation & Electronics, Consumer, and Safety & Industrial were down 1.8%, 7.2%, and 5.8%, respectively.
Click here to download our most recent Sure Analysis report on 3M Company (preview of page 1 of 3 shown below):
Top Dividend Champion #4: Sonoco Products (SON)
- 5-year expected returns: 16.1%
Sonoco Products provides packaging, industrial products and supply chain services to its customers. The markets that use the company’s products include those in the appliances, electronics, beverage, construction and food industries.
The company generates more than $7 billion in annual sales.
Source: Investor Presentation
On October 31st, 2023, Sonoco Products reported third quarter results for the period ending October 1st, 2023. For the quarter, revenue decreased 9.5% to $1.7 billion, which was $30 million below estimates. Adjusted earnings-per-share of $1.46 compared unfavorably to $1.60 in the prior year, but this was $0.18 more than expected.
For the quarter, Consumer Packaging revenues were down by 9% to $938 million due to lower volumes and prices. Flexible packaging, rigid paper, and metal packaging business performed well. Industrial Paper Packing sales fell 12% to $580 million due to weaker global demand for paper and converted paper products. All Other decreased 3% to $192 million as weaker volume and mix were only partially offset by pricing action.
Click here to download our most recent Sure Analysis report on Sonoco (SON) (preview of page 1 of 3 shown below):
Top Dividend Champion #3: Eversource Energy (ES)
- 5-year expected returns: 17.0%
Eversource Energy is a diversified holding company with subsidiaries that provide regulated electric, gas, and water distribution service in the Northeast U.S. The company’s utilities serve more than 4 million customers after acquiring NStar’s Massachusetts utilities in 2012, Aquarion in 2017, and Columbia Gas in 2020.
Eversource has a long history of generating steady growth over time.
Source: Investor Presentation
On November 6th, 2023, Eversource Energy released its third quarter 2023 results for the period ending September 30th, 2023. For the quarter, the company reported revenue of $2.79 billion, a decrease of 13.2% compared to $3.22 billion in the same quarter of last year. The company reported earnings of $339.7 million and earnings-per-share of $0.97 compared with earnings of $349.4 million and earnings-per-share of $1.00 in the prior year.
The company reported earnings of $15 million and earnings-per-share of $0.04 compared with earnings of $292 million and earnings-per-share of $0.84 in the prior year.
Click here to download our most recent Sure Analysis report on ES (preview of page 1 of 3 shown below):
Top Dividend Champion #2: Polaris Industries (PII)
- 5-year expected returns: 17.2%
Polaris designs, engineers, and manufactures snowmobiles, all-terrain vehicles (ATVs) and motorcycles. In addition, related accessories and replacement parts are sold with these vehicles through dealers located throughout the U.S. The company operates under 30+ brands including Polaris, Ranger, RZR, Sportsman, Indian Motorcycle, Slingshot and Transamerican Auto Parts.
On October 24th, 2023, Polaris reported Q3 results for the period ending September 30th, 2023. For the quarter, revenue decreased 3.8% to $2.25 billion, which was $20 million less than expected. Adjusted earnings-per-share of $2.71 compared unfavorably to $3.25 in the prior year and was $0.02 less than anticipated.
Source: Investor Presentation
For the quarter, Marine sales declined 48%, On-Road fell 19%, and Off-Road, the largest component of the company, improved 6%. Sales for Marine and On-Road were lower due to a decrease in volumes. Off-Road benefited from strength in snowmobile demand and gains in Parts, Garments, and Accessories. Gross margin contracted 127 basis points to 22.6%.
Click here to download our most recent Sure Analysis report on PII (preview of page 1 of 3 shown below):
Top Dividend Champion #1: Albemarle Corporation (ALB)
- 5-year expected returns: 21.1%
Albemarle is the largest producer of lithium and second largest producer of bromine in the world. The two products account for nearly two-thirds of annual sales. Albemarle produces lithium from its salt brine deposits in the U.S. and Chile. The company has two joint ventures in Australia that also produce lithium.
Related: 2023 Lithium Stocks List
Source: Investor Presentation
On November 1st, 2023, Albemarle reported third quarter results for the period ending September 30th, 2023. For the quarter, revenue grew 10.5% to $2.31 billion, but missed estimates by $220 million. Adjusted earnings-per-share of $2.74 compared very unfavorably to $7.50 in the prior year and was $1.00 below estimates.
Results were negatively impacted by lower prices for lithium. For the quarter, revenue for Energy Storage grew 20% to $1.7 billion. A 40% increase in volume was offset by lower prices. Revenues for Specialties fell 20.2% to $352.7 million as volumes were down 7% and realized prices declined 13%. Ketjen sales of $260.7 million were a 10.6% increase from the prior year, again due to higher prices.
Click here to download our most recent Sure Analysis report on Albemarle (preview of page 1 of 3 shown below):
Final Thoughts
The various lists of stocks by length of dividend history are a good resource for investors who focus on high-quality dividend stocks.
In order for a company to raise its dividend for at least 25 years, it must have durable competitive advantages, highly profitable businesses, and leadership positions in their respective industries.
They also have long-term growth potential and the ability to navigate recessions while continuing to raise their dividends.
The top 7 Dividend Champions presented in this article have long histories of dividend growth, and the combination of high dividend yields, low valuations, and future earnings growth potential make them attractive buys right now.
The Dividend Champions list is not the only way to quickly screen for stocks that regularly pay rising dividends.
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